Collateral Recapitalization

ZUN stakers are not only the rightful owners of the Zunami protocol, benefiting from all its operational profits, but they also serve as its guardians. They have approved a recapitalization and, as a result, will receive an additional allocation of ZUN. Every zunStables is backed with an added layer of collateral in the form of ZUN tokens staked specifically for recapitalization purposes.

We anticipate that recapitalizations will be an infrequent process, and a substantial portion of the ZUN issuance will more than offset any potential losses stemming from such recapitalizations in the long run.

While Zunami zunStables strives to maintain full collateralization at all times, unforeseen events could lead to the protocol becoming under-collateralized. For example, if a depegging event occurs with one of the stablecoins in a specific strategy, it might result in some loss of the total zunStables collateral. In scenarios where the protocol isn't entirely collateralized, the ZUN tokens earmarked for recapitalization are frozen. A four-day discussion then commences on Discord. This is followed by a DAO vote to determine whether to initiate the recapitalization. If approved, the necessary ZUN tokens are withdrawn from staking, subsequently sold on DEX and utilized to restore zunStables to a 100% collateralized state.