The Power of a Price Floor

Rootkit actively uses its own Ethereum Liquidity to drive volume and increase the price of ROOT.

Price Floor is a term used in both traditional and crypto circles, which refers to the lowest possible price an asset can reach. Often what guarantees that price is a centralized trusted authority like a government or the asset issuer. In these cases the floor isn’t real, because that authority can change their mind. Rootkit creates the floor based on math and nothing else, removing the need for trust and giving anyone the ability to verify.

Creating a price floor

ROOT is a fixed supply token, and its trading liquidity can never be removed from the Uniswap pool. These are the two mechanics any token can use to create a mathematical minimum price, i.e. a price floor.

Finding the Floor

If every ROOT that is not currently in the liquidity pool (LP) is sold into the pool, the resulting price is the floor. A lower price is not possible, as there is no ROOT left to sell.

The Rising Floor

The two main factors that push the floor up are the amount of liquidity locked in the pools, and how much ROOT is outside of the pools. Our goal should always be to raise the floor so more ETH is unlocked for use. There are multiple ways we will do this.

  • Burning any token outside the pool also increases the price floor because less can now be sold into the pool.
  • We will also offer bonuses for LP creation after the LGE is over. If the creation of 1 ETH worth of LP tokens raises the floor by 0.5 ETH, we can offer a 25% bonus and still increase the vaults holdings (everybody wins).

Wasted Value

The current floor of CORE (cvault.finance) has over 11,500 ETH below it. This means that this ETH has served its purpose to the system, but now provides no additional value. Rootkit will make use of this ETH multiple times for the benefit of all ROOT and LP token holders.