The Market Stability Index (MSI) is a key metric within the MemoTrader ecosystem, designed to measure the balance between speculative activity and practical utility. It is calculated as follows:
MSI = MemoCredit Conversions/MMT Purchases
where:
• MemoCredit Conversions represent users trading MemoTokens (MMT) for MemoCredits, indicating real utility and engagement within MemoTrader.
• MMT Purchases refer to the acquisition of MemoTokens from liquidity pools.
• MSI > 1 → Market is utility-driven, with more MMT being converted to MemoCredits than purchased
• MSI < 1 → Market is more speculative, with MMT purchases outpacing MemoCredit conversions
• MSI ≈ 1 → The ecosystem is in balanced equilibrium
MemoToken's market structure evolves through three distinct phases, each with its own liquidity management approach:
• Implements systematic liquidity management through predefined price steps
• Uses automated MMT injection mechanism to maintain price stability
• Operates with specific USDC balance thresholds for price progression
• Exit criteria includes minimum iterations, volume requirements, and stability metrics
- Starting Price: $0.01
- Initial MMT Pool: 100,000 MMT
- Initial USDC Pool: 1,000 USDC
- Initial Liquidity Ratio: 100,000:1,000 (100 MMT : 1 USDC)
Each price increment within Phase 1 is triggered by reaching specific USDC balance thresholds in the liquidity pool:
| Price Step | USDC Threshold | Target Iteration |
|---|---|---|
| $0.02 | 10,500 USDC | ~19 |
| $0.03 | 21,000 USDC | ~30 |
| $0.04 | 31,000 USDC | ~37 |
| $0.05 | 40,500 USDC | ~42 |
| $0.06 | 52,500 USDC | ~47 |
| $0.07 | 61,000 USDC | ~50 |
| $0.08 | 71,000 USDC | ~53 |
| $0.09 | 82,500 USDC | ~56 |
| $0.10 | 91,000 USDC | ~58 |
To maintain price stability during Phase 1, the protocol implements an automatic MMT injection system:
1. **Trigger Condition**: When MMT is sold into the pool, the contract calculates the required injection amount using the formula:
Required MMT = (Intermediate USDC Balance × PRICE_DENOMINATOR) / Current Target Price
2. **Injection Size**: The contract automatically injects the minimum amount of MMT required to maintain the target price for the current step, drawn from the Reserve Wallet.
3. **Price Step Transitions**: Upon reaching a USDC threshold, the contract automatically advances to the next price step, updating the target price for subsequent calculations.
To prevent market manipulation and ensure orderly price progression, the following circuit breakers are implemented:
1. **Maximum Transaction Size**: Individual transactions cannot exceed 5% of the current liquidity pool depth.
2. **Time-Based Constraints**:
- Minimum 24 hours between price step advances
- Rolling 7-day volume requirements for price step qualification
3. **Slippage Protection**:
- Maximum 2% price impact per transaction
- Automatic rejection of transactions exceeding slippage parameters
Advancement to Phase 2 ($0.11 - $0.25) requires:
1. Sustained USDC pool balance above 100,275 USDC
2. Minimum of 60 successful iterations completed
3. Average daily volume exceeding 50,000 USDC for 7 consecutive days
4. No circuit breaker activations in the preceding 14 days
This comprehensive liquidity management policy ensures that Phase 1 provides a stable foundation for MemoToken's initial growth phase while maintaining market integrity and preventing manipulation.
• Transitions from reserve-based injections to Treasury-driven sales
• Implements controlled distribution of 1,000,000 MMT Treasury allocation
• Uses specific USDC thresholds and Treasury sales milestones
• Builds USDC reserves for operational sustainability
Phase 2 represents a strategic shift from Phase 1's reserve-based liquidity injections to a Treasury-driven sales approach. This transition marks MemoToken's evolution from initial market establishment to sustainable growth phase.
• Starting Price: $0.11
• Initial USDC Pool: 100,275 USDC (carried from Phase 1)
• Treasury MMT Allocation: 1,000,000 MMT
• Treasury USDC Balance: 0 USDC
Each price increment within Phase 2 is triggered by reaching specific USDC balance thresholds in the liquidity pool:
| Price Step | USDC Threshold | Target Iteration | Treasury Sales Milestone |
|---|---|---|---|
| $0.13 | 130,275 USDC | ~8 | 50,000 MMT |
| $0.15 | 165,000 USDC | ~15 | 125,000 MMT |
| $0.17 | 205,000 USDC | ~23 | 225,000 MMT |
| $0.19 | 250,000 USDC | ~30 | 375,000 MMT |
| $0.21 | 290,000 USDC | ~38 | 575,000 MMT |
| $0.23 | 325,000 USDC | ~45 | 800,000 MMT |
| $0.25 | 350,275 USDC | ~52 | 1,000,000 MMT |
Unlike Phase 1's reserve injections, Phase 2 implements a controlled Treasury sale strategy:
1. Sale Triggering: When USDC is added to the pool, the contract calculates the required MMT to maintain the target price using the formula:
Required MMT = (New USDC Balance × PRICE_DENOMINATOR) / Current Target Price
2. Sale Execution: The Treasury releases the minimum amount of MMT needed to maintain the current price step, drawing from its 1,000,000 MMT allocation. Sales occur gradually, with larger allocations at higher price points to maximize Treasury value capture.
3. USDC Accumulation: Treasury sales generate USDC for operational expenses and ecosystem development, starting at 0 USDC and building to approximately 207,000 USDC by phase completion.
1. Time-Based Constraints:
• Minimum 24 hours between price step advances
• Rolling 7-day volume requirements for price step qualification
2. Circuit Breakers:
• Maximum transaction size: 5% of current liquidity pool depth
• Maximum price impact: 2% per transaction
• Automatic rejection of transactions exceeding slippage parameters
3. Volume Requirements:
• Minimum daily volume of 50,000 USDC
• Volume thresholds must be maintained for price step advancement
Advancement to Phase 3 ($0.25 - $0.50) requires:
1. Complete distribution of Treasury MMT allocation (1,000,000 MMT)
2. Sustained USDC pool balance above 350,275 USDC
3. Minimum of 52 successful iterations completed
4. Average daily volume exceeding 50,000 USDC for 7 consecutive days
5. No circuit breaker activations in the preceding 14 days
This structured approach ensures Phase 2 provides controlled price discovery while building significant Treasury reserves for future ecosystem development. The mechanism's predictable nature and built-in protections maintain market stability during this critical growth phase, while the gradual Treasury sale strategy optimizes value capture for long-term sustainability.
Once MemoToken completes Phase 2, it transitions to a mature market structure governed primarily by the Market Stability Index rather than specific price targets:
1. Market-Driven Price Discovery
• Price determined entirely by supply and demand
• No predetermined price targets or thresholds
• Focus on maintaining healthy MSI rather than specific price levels
2. Dynamic Liquidity Management
• Liquidity interventions based on MSI readings
• Automated responses to significant MSI deviations
• Priority on maintaining market efficiency over price control
3. Circuit Breakers
• Volume-based trading limits
• Rolling time-window restrictions
• Slippage protection mechanisms
• All tied to MSI rather than absolute price levels
4. Treasury Operations
• Strategic sales based on MSI trends
• USDC accumulation for ecosystem development
• Focus on long-term sustainability
1. Successful completion of Phase 2 requirements
2. Sustained MSI between 0.8 and 1.2 for 14 consecutive days
3. Minimum daily volume exceeding 100,000 USDC
4. No circuit breaker activations in preceding 30 days
5. Active user base exceeding 10,000 accounts
1. MSI Monitoring
• Continuous calculation of MSI across multiple timeframes
• Rolling averages to smooth short-term fluctuations
• Trend analysis for early warning signals
2. Intervention Triggers
• Primary: MSI deviating beyond 0.7-1.3 range
• Secondary: Unusual volume patterns
• Tertiary: Market depth imbalances
3. Response Mechanisms
• Automated liquidity adjustments
• Treasury sale/retention decisions
• Circuit breaker activation/deactivation
• All calibrated to maintain MSI stability
Consistent across all phases, MemoToken maintains robust protection mechanisms:
1. Circuit Breakers
• Maximum transaction sizes relative to liquidity depth
• Rolling time-window volume limits
• Slippage protection parameters
2. Anti-Manipulation Measures
• Prevention of flash crashes through gradual sale requirements
• Protection against coordinated buying pressure
• Monitoring of unusual trading patterns
3. Community Governance
• Increasing role of community input in market decisions
• Transparent reporting of market metrics
• Regular community consultations on market health
This refined market structure ensures MemoToken can evolve from a carefully managed initial phase through to a mature, market-driven ecosystem while maintaining stability and preventing manipulation. The focus on MSI in Phase 3 reflects the token's primary purpose: supporting the MemoTrader platform's utility rather than speculative trading.