Economic model (rights & obligations)

Rights

• Credit line of 0xAssets- Governance sets a per-allocator ceiling (max effective debt) and a dailyCap (issuance velocity).

• Borrowing cost- The protocol targets a fix annual borrowing rate policy for allocators. In contracts today, this is implemented as a borrow fee in basis points charged at repay (i.e., on underlying delivered back when retiring debt). Governance can tune borrowFeeBps per allocator so the realized cost aligns with policy.

• Flow attribution- When a user provides a referral code mapped on-chain to an allocator, the engine:

  • Routes inbound stables to that allocator’s pocket, and

  • Consumes that allocator’s reserved 0x inventory first when paying out 0xAssets. This lets allocators monetize their distribution and keep their inventory turning over.

Obligations

• Custody & readiness- Allocators must maintain secure custody of pocket funds and keep adequate allowances so UCE can pull instantly for settlements.

• Provision inventory- Keep reservedZeroX topped up so users referred to you receive excellent fill quality without triggering the system’s scarcity surcharge path.

• Repay debt- Use allocatorRepay(asset, assets) to return underlyings and retire credit; treasury fees are skimmed at repay according to borrowFeeBps.

• Operate within limits- Respect ceiling and dailyCap. The contracts enforce both; mints revert if limits would be exceeded.

• Bear tail risk- In extreme scarcity where the engine must mint to meet redemptions, debt scaling socially amortises shortfall across indebted allocators in proportion to open credit. This aligns issuance with responsibility.

ℹ️ Note on referral & debt: referral-coded swaps do not auto-repay allocator debt. They consume the allocator’s reserved 0x inventory first and route underlying flow to their pocket - indirectly improving their position. Actual debt reduction happens when the allocator calls the repay function with underlyings.