CSM Minting and Buyback

The CosmBank protocol governs supply dynamics through precise mathematical models designed to maintain CSM's price equilibrium.

Inflation Adjustment Equation (Minting Phase)

Minted Amount = (TWAP - IV) × S × ICV × DF

Explanation: When the TWAP exceeds the anchor price (IV = 1 USDT), the protocol mints new CSM proportional to the deviation, adjusted by the Inflation Control Variable (ICV) and the Discount Factor (DF) to smooth issuance.

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Deflation Adjustment Equation (Buyback Phase)

Buyback Amount = (TWAP - IV) × S × DCV × DF

Explanation: When the TWAP falls below the anchor price, the protocol executes CSM buybacks proportional to the negative deviation, modulated by the Deflation Control Variable (DCV) and the Discount Factor (DF).

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Parameter Definitions

Symbol	Description
TWAP	Time-Weighted Average Price of CSM
IV	Anchor Price (Initial Value), set at 1 USDT
S	Current circulating supply of CSM
ICV	Inflation Control Variable, regulating minting speed
DCV	Deflation Control Variable, regulating buyback speed
DF	Discount Factor, smoothing expansion or contraction