TOR is a fully collateralized stablecoin built on the Fantom Opera Chain. It has a dynamic supply which is determined by supply and demand which ensures it is always worth $1.
The HECTOR Ecosystem
HEC and TOR make up the foundations of the HECTOR Ecosystem. Over the coming months and years, TOR will expand to be one of the only truly decentralized and collateralized stablecoins in the market. This will allow for significant growth of the HECTOR Ecosystem and bring value and utility to users everywhere.
How TOR works
TOR is a new ERC20 token which can only be minted when a user burns HEC. TOR can be exchanged for newly minted HEC (redeemed) using the HEC price oracle, implemented with Time Weighted Average Price (TWAP). Oracles are a fundamental component to any stablecoin’s base functionality. An oracle, in relation to blockchain technology, is a system built to feed data to smart contracts.
Generally, a Stablecoin is only used and trusted if it maintains its price peg. TOR is pegged to $1. How is it ‘backed’? There are two layers of TOR’s backing:
- Smart-contract models and the HEC/stable LP
- Over-collateralized via the Hector Finance Treasury
HEC and TOR
Hector (HEC) is the counterpart to the TOR Stablecoin. Let’s zoom in on the elements Expansion and Contraction:
- Expansion: The percentage of TOR in the curve pool decreases, so it means that the demand for TOR is high. The price of TOR against USDC/DAI also increases slightly, so minting TOR can be slightly profitable. Users will take advantage of this profit margin by minting TOR and rebalancing the percentage of TOR in the curve pool.
- Contraction: The percentage of TOR in the curve pool increases meaning that the demand for TOR is low. The price of TOR against USDC/DAI also decreases slightly, so redeeming TOR can be slightly profitable. Users will take this profit by redeeming TOR and rebalancing the percentage of TOR in the curve pool.