While no project can ever guarantee a particular price, ndau has economic incentives built into its ecosystem to encourage market interactions between ndau holders that tend to stabilize its price. Ndau holders are rewarded based on duration of holding.
ndau’s monetary policy automatically responds to market conditions in real time, releasing new ndau for sale from the endowment only when demand warrants and according to a public schedule of target prices that rise exponentially over time.
Proceeds from ndau sales flow into an endowment of assets, which serves as a source of liquidity to support ndau monetary policy. The endowment is then used by the market maker to buy and burn surplus ndau.
During market downturns, excess supply of ndau are taken out of circulation through both algorithmic mechanisms and by market makers, who buy back ndau at a dynamic floor price – similar to how central banks conduct open market operations, except more decentralized.