Protocol Added Value (PAV)

In response, the above ReOrders mechanism can be set as follows. After Alice completes the trade, the protocol will only reserve the corresponding amount of USDC funds. The remaining USDC raised from the Trust AI-AMM can be defined the Protocol Added Value (herein after referred to as “PAV”).

Only 9.99 USDC are reserved, and the funds in the pool are 10009.99 TAiUSD and 10009.99 USDC. ReOrders mechanism is now as follows: For the n round ReOrders, ΔPAVn is:

After the n round ReOrders, the amount of USDC in the Trust AI-AMM is Xn':

The amount of TAiUSD adjusted by the Protocol in the Trust AI-AMM is ΔYn' as:

• If ΔYn', it means that in this round of ReOrders, the Protocol needs to mint TAiUSD, and the mining amount is ΔYn';

• If ΔYn', it means that in this round of ReOrders, the Protocol keeps the status;

• If ΔYn', it means that in this round of ReOrders, the Protocol needs to burn TAiUSD, and the burning amount is ΔYn';

Obviously, the protocol can accumulate value in Trust AI Protocol's market-making process. It can be defined as Protocol Added Value. The reason for this design is that any adjustment of market circulation will impact the circulating TAiUSD. Although TAiUSD's inflation and deflation always reflect the real supply-demand relationship in the market and the PAV ensures that inflation and deflation will not affect the inherent value of TAiUSD in circulation, any sell and buy will cause TAiUSD's price to deviate from the anchor price temporarily.

To a certain extreme extent, it will cause unnecessary panic among TAiUSD users. Therefore, we ensure that users who buy or sell TAiUSD will compensate the holders of TAiUSD in circulation through the slippage setting. Furthermore, slippage ensures that the protocol can resist giant whales because when the depth remains the same, the greater the transaction volume, the greater the transaction slippage. On the other hand, the emergence of a significant slippage is a good thing for other TAiUSD holders. Because the PAV is enlarging, the transaction depth provided by the Trust AI Protocol will be further deepened and subsequent users will have less transaction slippage if they choose to hold and wait.

Then cumulative added value PAV is: