CoCo
Coconuts aims to become a decentralized, Algorithmic based, reserve currency. On a high level, the CoCo token has 4 axioms:
Every CoCo token has a Intrinsic Value (IV) backing the token. While there can be more assets backing the token, there is a minimum value associated with the token. Hence, there is a price floor, but no price ceiling of the protocol.
The CoCo token can only be minted or burned by the protocol. The protocol serves as the "decentralized, central bank" of the protocol, with the ability to expand and constrain supply.
When CoCo is trading above the IV, the protocol expands supply, and sells Hammock to the market. Because the protocol can create more supply, as long there is the IV backing the token, it makes profits on the spread between IV and market price.
When CoCo is trading below IV, the protocol buys and burns Hammock, contracting supply. Because it buys the token under the intrinsic value, the protocol makes a profit on the spread.
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