The Unbound protocol is a dual token ecosystem. It uses UND as a stablecoin and UNB as a governance token.
The UND is a stablecoin that is pegged to USD and collateralized by LPT (Liquidity Pool Tokens). The value of UND minted is based on the value of the deposited LPT. The amount of UND minted at the time the LPT was deposited is the amount that the user must pay back in order to get their original LPT. Minted UND will be burned once deposited in the Unlock contract before the original collateral is returned to the user. Arbitrageurs in AMM pools ensure that the Dollar peg is maintained.
UNB is used for protocol governance. It encourages participation from the token holders by way of decision making to resolve issues. Token holders will be able to vote for policy on proposed changes and implementations to better serve the community and increase the efficiency of the protocol. More details on governance is covered in the upcoming sections.
A perpetual inflation rate of 4% per year will start after 2 years, ensuring continued participation and contribution to Unbound at the expense of passive UNB holders.