DYAD’s utility token

Kerosene is a token that lets you mint DYAD against the collateral surplus in the system. It can be deposited in Notes just like other collateral to increase the Note’s DYAD minting capacity.

By utilizing Kerosene, users can bring down their -theoretical- collateral ratio down to 100% from the minimum of 150% or higher, by depositing the token into their Notes. This means that one DYAD is always backed by a minimum of one dollar of exogenous collateral. Users holding Kerosene in their Notes are essentially shielding themselves from liquidation via the surplus collateral in the system, when they deposit kerosene into their notes. Kerosene is as valuable as the degree of DYAD’s overcollateralization. Kerosene is not additional collateral; it’s a mechanism for allocating the right to mint against existing surplus collateral in the system.