Smart Treasury · Pots Money

Smart Treasury
Four-Layer Reserve Architecture

The Smart Treasury is not just a reserve fund — it is a game-theoretic deterrent. A system designed so that attacking the protocol is always more expensive than participating in it. Every IBS is guaranteed redemption for at least $1 through a cascade of four progressively stronger defenses.

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Safety Treasury (BSC) 0x5BB0d5Cb2276a054d933B14D023A2063CF8F28Ce BSCScan ↗
Key Takeaways
  • Four-layer reserve: permanent LP + RBS stability + Safety Treasury + POTS Bid Pool
  • Protocol-owned LP is immutable — locked in Blackhole pool, cannot be removed
  • Automated RBS stabilization requires no governance approval for routine operations
  • 25-of-50 multi-sig for Safety Treasury — prevents single-actor exploit
Reserve Architecture

Treasury Components

Each component has dedicated inflows, defined purposes, and separate execution logic. They are not interchangeable.

𝒯 = {VLP, TRBS, TST, TPBM}
VLP

Protocol-Owned LP

Execution: Immutable

Permanent base reserve. USDT + IBS locked in the Blackhole LP pool. This is the treasury — not separate from it. Every solvency formula counts VLP as the primary backing asset. It cannot be moved by any actor under any circumstance.

Funded by: Bond purchases — LP assets permanently locked on bonding
TRBS

Range Bounded Stability

Execution: Automated

Active market stabilizer. Operates within a defined price band: [BIBS × 0.95, BIBS × 1.10]. When IBS falls below the lower band, TRBS buys back and burns IBS. When IBS exceeds the upper band, the protocol mints and absorbs USDT. Minimum reserve ratio: 20% of VLP — bond issuance pauses if depleted below this.

Funded by: USDT absorbed during above-band minting events
TST

Safety Treasury

Execution: Multi-sig (25-of-50)

Last-resort solvency reserve. One purpose: ensuring every IBS can be redeemed for ≥$1 under any market condition. Grows monotonically under normal operation. Can only be deployed when TRBS is exhausted AND backing ratio falls below 1 + ε — requires 25-of-50 multi-sig approval. Prevents both automated exploits and governance-level attacks.

Funded by: Portion of YRF protocol revenue flows — grows with ecosystem activity
TPBM

POTS Bid Pool

Execution: Automated + Multi-sig

Governance token distribution mechanism. Used exclusively to bid for and redistribute POTS governance tokens via the PBM auction. Routine bid execution is automated; strategic allocations require multi-sig DAO approval.

Funded by: Slashing tax on IBS unlocks (10–30%) + YRF protocol revenue
Solvency Guarantee

The Solvency Condition

This condition is always maintained. It is the foundational guarantee of the POTS monetary system.

(VLP + TRBS + TST) / Scirc ≥ 1

Total reserves / circulating IBS supply ≥ 1 at all times

Game-Theoretic Security

A rational attacker must overcome three sequential barriers:

  1. TRBS — Automated buyback absorbs the first wave of sell pressure
  2. TST — Multi-sig introduces a time delay, allowing community response
  3. VLP — Permanent liquidity floor — provides non-zero redemption value even if both reserves depleted
Attack Cost ≥ TRBS + TST + Lpermanent

As the treasury grows, attack becomes progressively less viable — economic security scaling.

Access Control

Governance: Automation + Multi-Sig

Routine stabilization is automated. Strategic treasury decisions require distributed consensus.

Operation Execution Approval Required
RBS stabilization (routine) Automated None
Bond issuance / pause Automated None
Safety Treasury deployment Multi-sig 25-of-50 signers
Protocol parameter update Multi-sig 25-of-50 signers
Treasury strategic allocation Multi-sig 25-of-50 signers
The 25-of-50 multi-signature structure ensures no single actor — including the founding team — can unilaterally access treasury funds. Any strategic decision requires consensus among a distributed set of keyholders.
Protocol Config

Initial Parameters

All parameters are subject to DAO governance and can be adjusted by 25-of-50 vote.

Parameter Initial Value Governance
RBS upper band multiplier1.10DAO-adjustable
RBS lower band multiplier0.95DAO-adjustable
Min RBS reserve ratio (γ)20%DAO-adjustable
Slashing Tax (immediate)30%DAO-adjustable
Slashing Tax (linear)10%DAO-adjustable
Multi-sig threshold25-of-50DAO-adjustable

Frequently Asked Questions

01 What is the Smart Treasury?
The Smart Treasury is a four-layer reserve architecture: V_LP (permanent protocol-owned LP, immutable), T_RBS (automated range-bounded stability), T_ST (multi-sig solvency guarantee), T_PBM (POTS bid pool). The solvency condition is (V_LP + T_RBS + T_ST) / total supply ≥ 1, maintained at all times.
02 How does RBS stabilization work?
RBS operates within a price band (95% to 110% of backing value). When IBS price falls below 95% of backing, the protocol automatically injects USDT from T_RBS to buy back and burn IBS. When price exceeds 110% of backing, the protocol mints new IBS and absorbs USDT into T_RBS. No governance approval needed for these routine operations.
03 When is the Safety Treasury deployed?
Only when T_RBS is exhausted AND the backing ratio falls below 1 + epsilon. Deployment requires 25-of-50 multi-sig approval — it cannot be triggered by any automated process alone. The two-layer protection (automation + governance delay) prevents both fast-moving exploits and slow-moving crises.
04 What is the POTS Bid Pool?
T_PBM is funded by the slashing tax on IBS unlocks (10-30% depending on unlock speed) plus YRF protocol revenue. It is used exclusively to bid for and redistribute POTS governance tokens via the PBM auction mechanism. Strategic allocations require multi-sig DAO approval.
05 Can the protocol LP be removed?
No. V_LP is locked in the Blackhole LP pool and is immutable — no actor can move or remove it. This permanent liquidity floor ensures a non-zero redemption value even if both RBS and Safety Treasury reserves are depleted.
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