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Documentation Index

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The Backing Arbitrage Module (BAM) is a two-way arbitrage mechanism triggered when RBT’s market price deviates from its Net Asset Value (NAV). When RBT trades above NAV, existing RBT is sold into the market and proceeds route to the reserves. When RBT trades below NAV, USDm in reserves is used to buy and burn RBT. BAM is a planned mechanism that will be activated at a later stage and is not guaranteed to be live at launch. Activation timing and parameters are subject to governance.

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How It Works

  • Monitor — Contract monitors RBT market price against NAV
  • Above NAV — Sell RBT for USDm, route USDm to reserves
  • Below NAV — Buy RBT with USDm, burn the RBT
  • Scale — Operation size scales with deviation from NAV
  • Cooldown — Cooldown between operations prevents gaming and smooths market impact

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Above NAV (RBT > NAV)

When RBT trades above NAV, the protocol sells existing RBT into the market. USDm proceeds route to the reserves.

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Below NAV (RBT < NAV)

When RBT trades below NAV, the protocol uses USDm in reserves to buy RBT from the market and burn it.