Taxes

It’s important to note that this model starts to break if a market participant of sufficient size decides to act both as the protocol’s liquidity provider and arbitrageur. This is because a market maker who owns a large share of the liquidity provisioned; essentially pays less in LP fees for swaps. Since our model relies on protocol owned accounts being the privileged arbitrageur; the stable asset token will have a deactivated, optional fee on transfer in-built. This provides us with a lever that can shift the dynamics of arbitrage.