Friday, December 9, 2022

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Endowment: $29,953,555

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Stabilization Incentive Burn (SIB) and SIB Protection

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SIB is a key feature of ndau that provides protection against both inflation and downside volatility.
Learn more about why it’s so important and how it helps all ndau holders here.

Similar to other digital currencies, all ndau transactions are subject to a small fee that supports the operation of the ndau network. ndau, however, has an additional, unique feature known as the Stabilization Incentive Burn (SIB) system to mitigate downward volatility.

When the Market Price of ndau drops to 5 percent below the Next Issue Price, the SIB activates. The SIB is a fee that is applied on top of normal transaction fees only when a transfer is being made from a regular wallet account to an exchange account.

The SIB rate progressively increases as the Market Price approaches the Floor Price, and the ndau collected through the Applied SIB fee are permanently removed from circulation (“burned”).

SIB reduces the incentive to sell during down market conditions because the cost to do so grows higher the more the market declines.

The following equation is used to calculate Base SIB

You can find the current NextIssuePrice (aka “TargetPrice”) and FloorPrice at this API endpoint

Base SIB is then used a variable in the Applied SIB equation:

Applied SIB = Base SIB * (1 + (10 * Base SIB)) 

 

The ndau wallet app always displays the Applied SIB fee amount before the transaction is approved by the user.

 

 

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