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Token Model

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Last updated 2 months ago

The Safura protocol includes a Ratcheting Automated Market Maker (RAMM) for minting and redeeming $SAFU.

RAMM is a two-pool system built on the Capital Pool, ensuring claims are payable during major loss events. It balances $S (Sonic) inflow/outflow, $SAFU staking, investment allocations, and asset-liability management through an automated mechanism.

Members can use assets in the Capital Pool to underwrite cover products and vote on investment allocations.

Ratcheting Automated Market Maker (RAMM)

The RAMM model consists of two virtual one-sided Uniswap v2-style pools: Below Pool and Above Pool. Both pools share a defined amount of $S liquidity paired with virtual $SAFU reserves.

Below Pool:

  • Handles swaps below the Book Value.

  • $SAFU sold is burned; $S is distributed.

  • Can only redeem $SAFU when the spot price is less than or equal to the Book Value.

Above Pool:

  • Handles swaps above the Book Value.

  • $S is added to the pool, and $SAFU is minted in return.

  • Can only purchase $SAFU when the spot price is greater than or equal to the Book Value.

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