Rome Keeper

Puzzle team is happy to announce the launch of a new tool - Rome Keeper - which is designed to help sustain the peg of a ROME stablecoin.

ROME was launched in November 2023 and managed to get some traction on the Waves blockchain thanks to its unique mechanics based on the Puzzle Lend integration and LP tokens backing.

However its peg to the price of 1 dollar remains an issue: despite it tends to vary around this price and is backed to guarantee enough collateralization, in short periods of times historically it fluctuates too much, sometimes as much as 15% from the peg.

Rome Keeper is launched to solve this and to KEEP THE PEG.

Solution

The Rome Keeper tool contains two main parts: treasury and LP token called ROME-KEEPER.

Treasury consists of the two tokens, ROME and USDT, and uses them to support the peg in extreme market conditions. Those tokens are provided by anyone in the ecosystem in exchange for the ROME-KEEPER token.

Treasury strategy is the following:

If ROME price is below 0.98 usdt, swap 30% of treasury to ROME;
If ROME price is below 0.95 usdt, swap 50% of treasury to ROME;
If ROME price is below 0.90 usdt, swap 80% of treasury to ROME;
etc…

This strategy creates a buy pressure on ROME, when it’s needed to prevent the depeg down and sells it to prevent an upper depeg.

The values above are just an example: parameters can be changed dynamically (later on they are expected to be managed by the Puzzle DAO) and work both ways, e.g. if ROME depegs in the upper side, it gets sold by the treasury.

By following the strategy and assuming that both assets long-term price is 1 usd, Rome Keeper makes an arbitrageur’s profit, 100% of which is taken by ROME-KEEPER holders.

How to use it

Rome Keeper enables a simple and efficient strategy to all DeFi users. Anyone can buy ROME-KEEPER and keep it in their wallet. The token gets more expensive automatically with time together with arbitrageurs profit accrued, so later on they can sell it and keep the profits.

Example:

1. Alice buys 100 RK today for 100 ROME.

2. For the next month, Rome Keeper is performing a small arbitrage making 0.1% profit daily.

3. This makes RK token grow in price by 0.1% per day and at the end of the month it costs 1.03 ROME per RK.

4. In a month Alice sells her 100 RK for 103 ROME taking a profit of $3.

The risks would be that ROME or USDT depegs last too long and Rome Keeper runs out of liquidity, which should be taken into assumption when making an investment decision.

Useful links

1. Buy ROME-KEEPER from the market: https://puzzleswap.org/trade?asset1=HTaRkjbyQ33UmpPVm839o8psfaHg9R4cStGWH8hCtYqv

2. Rome Keeper smart contract: https://w8.io/3PCcmcLtBrjHD68ybfMqC4Fd1k6y1aLgQRw

3. Rome Keeper interface, which enables minting RK and redeeming it to underlying (to be implemented): https://waves-dapp.com/3PCcmcLtBrjHD68ybfMqC4Fd1k6y1aLgQRw

4. Rome twitter: https://twitter.com/romestablecoin