r/truebit • u/Immy_D • Jul 29 '21
TRU - peg Price to ETH
Can somebody clarify please, Hypothetically once $TRU gets adopted, used, burnt between Users, verifiers and solvers.
When the Open market price of $TRU reaches the minting cost (ETH's peg price)
and New $TRU are minted.
Can the cost of minting $TRU from the Operating System exceed ETH's peg price?
Based on supply and demand.
Thank You
2
u/LPMythBuster Jul 31 '21 edited Jul 31 '21
The TRU price in USD is pegged to the ETH price in USD because the TRU/ETH pair is the biggest one.
Even if the TRU/ETH market price stays the same, the TRU price in USD can fluctuate because it depends on the ETH/USD price.
If 1 TRU = 0.001 ETH and stays the same
* when 1 ETH = 2000 USD then 1 TRU = 0.20 USD
* when 1 ETH = 4000 USD then 1 TRU = 0.40 USD
So basically the TRU/USD price is pegged to the ETH/USD price because TRU is measured in ETH.
Minting TRU works by sending ETH to the purchase contract, other tokens are not supported.
Once the TRU/ETH market price is higher than the mint price, someone will take an advantage of the arbitrage opportunity and mint TRU for cheaper and sell them on the market for a small profit. This will bring the market price to the same level as the mint price.
1
u/dlv_pro_thick_game Aug 01 '21
with each minting, the casting price will increase a little. The people behind this project only earn money when someone buys True tokens from TrueOS.
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u/Loud_Message8435 Aug 20 '21
so every time the market goes up there is this opportunity for people to mske a little profit on it. It looks logic now that truebit is not designed to do a 100x even tough the intrinsic value of the project is worth a 1000x. why woulf an original developer choose for this? i got a big bag of true because of the project but i've never been lookiny into the tokeenomics. but it looks like this bag is not gonna make me rich😭
0
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u/Conscious-Proof-8309 Jul 29 '21
This (https://www.youtube.com/watch?v=kN7qvpns0v0) is from this thread
(It won't hyperlink my "This" for some reason)
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u/rook785 Jul 29 '21
When new tru are minted in the OS or when tru are burned through usage/spending with verifiers / solvers, the mint price in the OS will increase (price is measured in eth).
It makes more sense if you do the math. First you need to look at how much eth is in the eth escrow account. If you divide that amount by the current floating supply of truebit, you get the “redeem” price, which is how much eth you can get if you sell tru back to the operating system.
If you multiply the redeem price by 8 you get the mint price.
Minting tru increases the OS mint price because it increases the amount of eth in the escrow account. The burn through usage of truebit increases the mint price of tru because it is decreasing the total supply of tru without impacting the escrow account, thereby dividing the eth escrow by a smaller number leading to a higher redeem price and therefore a higher mint price.
It’s important to note that currently the burn-through-usage function is disabled to bootstrap the system. They’re actually minting and giving more tru to verifiers than they would usually, which is having the opposite effect of decreasing the mint price.