The purpose of the Endowment is to hold the net proceeds from the release of reserve ndau and to provide liquidity to the market by way of the Market Maker. The Endowment also supports the monetary policies of ndau via the floor price as specified in the white paper. This is in contrast to most major cryptocurrencies that don’t have either an endowment equivalent or other means to facilitate equilibrium between demand and supply as a means of helping mitigate downside volatility.
The Endowment invests the net proceeds of its holdings according to rules and limits set forth by the BPC DAO. These rules and limits best suit the long-term risk and return policy objectives of the BPC DAO across the spectrum of possible investment environments in order to support a balance of growth and long-term market liquidity.
The Endowment is carefully managed, especially under stress scenarios, to ensure that it can provide liquidity within a set of reasonably staggered time periods. Assets in the Endowment do not “back” ndau and holders of ndau are in no way invested in the Endowment. There is no direct redemption feature of ndau for assets in the Endowment – ndau is a digital currency, not an exchange traded fund. The Endowment is available solely to the Market Maker for the purpose of providing liquidity to the market through the purchase and sale of ndau and therefore to manage monetary policy.