The superstable token with decentralized peg delegation

The ONC protocol produces 2 native stores of value: $ORDER, a superstable token, and $CHAOS, a volatile metastable token. $ORDER is a 2nd-order stablecoin that maintains its value of $1 through a fully decentralized peg. It is backed by a diversified basket of stablecoins, whose individual pegs strengthen & de-risk the peg for $ORDER. By holding $ORDER, you hold a superstable coin that is collateralized & stabilized by all others.

How it works

ONC's native token $CHAOS is a yield-bearing, volatile investment instrument – but with one key differentiator: a rising floor price. This permanently rising floor is made possible through the stablecoin collateralization of $CHAOS. Every token of $CHAOS is backed by a diversified reserve of stablecoins, and $CHAOS can always be sold back to the protocol at the floor-price backing for the stablecoins in the reserves.

The floor price for $CHAOS provides the token with a minimum intrinsic value. $CHAOS can trade above the floor, but its value can never go beneath the floor price.

This minimum intrinsic value can be deployed as collateral for zero-risk loans at the floor price of $CHAOS. Holders of $CHAOS may lock their $CHAOS in a vault and in turn mint an amount of $ORDER equivalent to the floor value of the $CHAOS they locked. When the floor value of $CHAOS rises, users can mint additional $ORDER. The maximum amount of $ORDER they can borrow is simply the current floor price of their $CHAOS.

When a user takes out a loan of $ORDER, their $CHAOS becomes locked as collateral. The user may retrieve their $CHAOS by repaying the loan to the protocol, which in turn burns the $ORDER and unlocks the $CHAOS. They may then use their $CHAOS freely as before.

Delegated peg

The ONC protocol stabilizes the value of $ORDER through decentralized peg delegation. The stability of the $ORDER token is derived from the stability of all other stablecoin implementations working together. This superstable token is not a specific algorithm for a stablecoin, but rather the combined, diverse forces of others. It is a 2nd-order stablecoin that is implementation agnostic.

$ORDER is always treated as $1 from the protocol’s point of view. This dollar value is denominated in $CHAOS tokens. For instance, if the spot price of $CHAOS is $12, the protocol accepts 12 $ORDER to purchase an $CHAOS token. Similarly, an $CHAOS token can be sold back for 12 $ORDER tokens.

But an $CHAOS token can also be sold back to the protocol of 12 DAI, USDC, USDT or any other stablecoin in the reserves. This transitivity from $ORDER to $CHAOS and $CHAOS to an arbitrary stablecoin opens up an arbitrage opportunity if $ORDER wanders from its peg.

If $ORDER trades beneath its peg, an arbitrageur purchases cheap $ORDER, and uses it to buy $CHAOS at a discount. They subsequently sell the $CHAOS back to the protocol for a different stablecoin and make a profit off of the arbitrage.

If demand for $ORDER drives the price above its page, arbitrageurs have two options for acquiring inexpensive $ORDER from the protocol and making a profit by selling it on the open exchanges:

  • They may buy $CHAOS with a stablecoin of their choosing, sell the $CHAOS to the protocol for $ORDER, and then sell the $ORDER at a profit on an open exchange.

  • They may buy $CHAOS with a stablecoin of their choosing, lock the $CHAOS, and take out a $ORDER loan. They then sell the $ORDER at a price higher than the peg. When $ORDER trades back down to its peg, they buy the regularly priced $ORDER and pay off their debt.

Use cases for $ORDER

There are several straightforward use-cases for $ORDER:

  • Leveraging exposure to $CHAOS with zero liquidation risk. By locking $CHAOS, a person may take out a loan of $ORDER equivalent to the intrinsic value of $CHAOS. They may then spend the $ORDER to purchase more $CHAOS. By repeating this process, they will increase their exposure to $CHAOS. Since $ORDER loans never exceed the value of the $CHAOS collateral, there is no liquidation risk.

  • De-risking stablecoin exposure. Since $ORDER is a decentralized stablecoin, it spreads out the inherent risk of stablecoins to a diverse portfolio. Stablecoin users do not need to yoke their capital to a single stablecoin but instead can diversify their exposure to collateralized, centralized, and algorithmic coins alike.

  • Negative-interest loans. The locked $CHAOS continues to return yield in the form of $prCHAOS tokens while used as collateral for $ORDER loans. This results in a loan that has a “negative interest rate” – in other words, a yield-bearing debt. People are free to hold $ORDER as long as they wish, deploying it as they see fit, and earning yield on their collateral all the while.


Since $ORDER is a 2nd-order stablecoin or superstable coin, it does not require special fee infrastructure to maintain its peg (such as DAI “stabilization fee”). And since the loan amount never exceeds the intrinsic value of the collateral ($CHAOS's floor price), the loan will never be liquidated. And finally, since $ORDER is minted just in time by the ONC protocol – and not taken from lenders – there is no need to make interest payments on the loan (in fact, the loan has a negative interest rate, in the form of $prCHAOS yield users receive on their locked $CHAOS).

However, the creation of value with $ORDER minting cannot be truly frictionless, otherwise the supply of $ORDER would flood the market. There is accordingly one monetary policy fee set on $ORDER to control its supply:

  • A one-time “loan origination fee” when minting $ORDER, charged as a flat interest rate of the total loan.

What is a "superstable" token?

The $ORDER token is called "superstable" owing to how it delegates its peg to standard stablecoins. $ORDER is a "higher-order" class of stablecoin, which maintains its peg through the diversified basket of reserve stables. Each individual stablecoin has some jitter to its price, but since $ORDER diversifies its exposure to many individual stablecoins, its own value is smoothed out and made durable.

As $ORDER contains exposure to many stablecoins, the diversification makes this asset an ultra low-risk store of value.

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