⁉️General FAQs
1. What does Dynamic Cocoon Expansion (DCE) mean?
We function on a dynamic system in which the expansion depends on several factors such as the TWAP of $MOTH, revenue generated by Moth Finance, price of $gMOTH, amount of $gMOTH staked in the Cocoon & more.
During an expansionary epoch, staked $gMOTH tokens mints new $MOTH if the price of $MOTH is above its target peg - 1.01 USDC, expanding supply to bring it back to equilibrium.
2. Understanding Moth Finance's Peg Stability Module (PSM)?
What is PSM? Peg Stability Module (PSM) is a fee mechanism that strengthens $MOTH's peg to $LINEA by creating a direct link between $gMOTH rewards and stable asset backing.
How it Works (Simple Example):
User wants to claim 1 $gMOTH (worth 1000 $USDC )
PSM requires a fee payment of 350$ worth of $ETH ( 35% of it's worth ).
Process:
User pays 350 $USDC worth of $ETH
Treasury receives the $ETH. This $ETH is used to buy $MOTH if under backing or $USDC, when MOTH's trading above backing.
User receives their 1 $gMOTH, worth 1000 $USDC
Why it matters?
• Creates real backing for $MOTH using $ETH • Builds treasury reserves organically • Strengthens the peg through actual asset backing • Reduces reliance on emissions alone
Key Difference from Traditional Models:
Traditional: Rely solely on market forces
Moth's PSM: Active fee capture → Real stable backing → Stronger peg
3. Are the Cocoon rewards pro-rated by time?
No. Cocoon rewards depend solely on the amount of staked $gMOTH tokens and not when they were staked during the epoch. Whether staked 3 hours or 30 seconds before epoch emissions, the rewards once epoch flips will be the same.
4. What happens If $MOTH continues climbing above the price of the peg ?
If the price of $MOTH remains high, the Cocoon has a dynamic expansion rate in which the higher the peg, more revenue can be distributed expanding supply further while maintaining the desired 100% backing.
5. Why can't I claim on The Cocoon?
Depositing $gMOTH or claiming $MOTH rewards onto the Cocoon triggers lock resets:
gMOTH withdraw locked for 4 epochs
MOTH harvest locked for 2 epochs
Unclaimed rewards after 8 epochs of no interactions with The Cocoon are used to buyback $gMOTH, only once the user interacts with the Cocoon again.
6. Why did my rewards not get claimed in the Cocoon?
We've also added a new mechanism in which rewards not claimed after 8 epochs are used to buy $gMOTH, to increase engagement & attachment with the protocol as well as $gMOTH price action improvements, which benefits everyone inside Moth Finance.
7. What will happen when shares circulating supply = Total supply? Will emissions stop?
Yes. Once the maximum supply of $gMOTH is reached, emissions stop. However, Moth Finance's vision is to become a platform that boosts rewards for users on Etherex, in turn, users who deposit to earn $gMOTH will have the underlying LP deposited into the gauge on Etherex generating revenue for the treasury via REX, or other, rewards.
Cocoon rewards will continue as long as $MOTH remains above the intended 1.01 peg.
8. What is an epoch?
An epoch in the Moth Finance ecosystem is a 6-hour period in which the total supply of $MOTH is potentially adjusted. The token price and revenue are constantly monitored to determine if, or how much of a supply expansion is needed.
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