Looper Finance Docs

Market Dynamics

There are numerous feedback systems within the system. These are self-reinforcing behaviors; Taking action 1 increases the rate of taking action 2, which increases the rate of taking action 1. Exponential expansion and boom-bust cycles are driven by circular dynamics like this one.

Player Goals

Loopers primarily care about their LOOP Token balance. While pricing is a factor in evaluating your LOOP Token and calculating its growth rate, it is not the most important factor. An intelligent Looper is only interested in the short- and long-term growth opportunities of the protocol. Through price and equilibrium growth, this growth leads to wealth.

Market Dynamics

The protocol's default state is inherited from the treasury to the intrinsic value. The price always returns to this level after an extended period of inaction.
The contraction is believed to be triggered only by short-term liquidity shortages. Since LOOP Token holders are guaranteed that the price will eventually rise above intrinsic value (due to anticipated Treasury token buybacks and burns, as well as the protocol's burn mechanism), the only sellers below should be those who have a short-term need and are willing are to accept a loss.
Buying from the market usually precedes an increase in returns for Loopers. This increases the price, which allows the protocol to sell at a larger profit margin and increase investor returns. This should help attract more investors and keep the cycle going.
But we can work to mitigate busts. This is where the protocol's tax reserves, incoming yield investments and LP come in, catching the market when the pace gets too slow. This is done through forwarding policies, the fact that the protocol is buying reduces risk the deeper we go (which may mean not having to buy) and by constantly buying below intrinsic value. The Treasury ensures that the protocol can never die, although bear markets and contractions can and will occur.