Dynamic Reserve Balancing
CosmBank integrates a modified version of the Reserve Balancing System (RBS) — reengineered into a dynamic liquidity engine called DRB (Dynamic Reserve Balancing).
The DRB system focuses on optimizing liquidity depth between CSM and major stablecoins (e.g., USDT, USDC).
Dual-Objective Algorithm
1. Liquidity Depth Optimization
DRB monitors on-chain trading volume and adjusts the protocol’s liquidity share in CSM/USDT pools.
The system aims to maintain large-swap slippage below 0.5%, ensuring consistent, high-efficiency market execution.
2. Reserve Buffering for Anti-Cycle Defense
During periods of high volatility, DRB converts part of the liquidity into stablecoins and stores them in the Treasury.
In low-volatility phases, these stablecoins are re-injected into liquidity pools — creating a cyclical buffer mechanism that mitigates price swings.
Decentralized Oracle Integration
To maintain accurate on-chain pricing and peg stability, DRB integrates decentralized oracle feeds from:
Chainlink
Band Protocol
These oracle feeds are used to calibrate real-time exchange ratios and prevent arbitrage-based exploits.
DRB introduces an intelligent feedback loop between market data, liquidity positioning, and Treasury reserves — optimizing liquidity while defending against volatility and manipulation.
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