Loot Finance is an algorithmic stablecoin model that attempts to bring extra liquidity and users to the underlying base asset, $CRO, that it is pegged to through a seigniorage model.
The underlying "algorithm" or "mechanism" of the protocol either increases, or decreases the supply of the token with the aim of pegging to 1 $CRO. The protocol also uses other measures to achieve this as further explained in the DAO fund section of these documents. We will also explain further how users can earn yields or profits on both sides of this equation throughout the Gitbook.
Most algorithmic stablecoins of this type were inspired by the Basis Cash model, among others, and more noticeably lately by the most successful iteration of this idea by Tomb Finance on Fantom. The protocol has 3 underlying tokens that present a range of uses for the users.
Loot Finance consists of three core assets:
LOOTDOLLAR is the underlying peg token, that aims to be pegged to 1 CRO
TREASURE is the share token. It represents the protocol's overall value and can also be staked to earn LOOTDOLLAR when it is trading above 1 $CRO.
GOLD is the bond token, in which users receive after burning their LOOTDOLLARS when it is trading under peg, and can be redeemed for a premium paid in LOOTDOLLARS later, when the price regains above 1 $CRO.