Standard system is applied in Standard protocol. The exchange rate is determined by the price in USD to buy a collaterized asset. Standard protocol may take 0.1% fee to input for maintaining price oracle.
Standard protocol defends its price with in both contractionary and expansionary cases with rebase in every 8 hours.
An era means roughly 90 days in a number of rebases (270 rebases).
In cases where appreciation of STC goes above 1 USD(or DAI), the Treasury mints new STC to seigniorage pool. The minted STC is given proportionally to STD holders to l if its balance is below 1,000 cash, used up by bond redeemers. Otherwise, if the Treasury’s balance is above 1,000 cash, seigniorage is given to the Boardroom, distributed to share token holders.
In cases where the price of STC goes below 1 USD(or DAI), the Treasury issues Standard Block(STB) to incentivize holders to lock up Standard Cash(STC) from the market to the reserve bank. Decreasing the amount of STC in market by exchanging into the bond will increase the value of STC due to its scarcity.
Block price is determined by the governance and it is issued in the market based on TWAP price in uniswap between DAI and STC. Holding a block will earn a share of seigniorage for an era (270 rebases) in Expansionary cases. During an era, a block cannot be exchanged to STC. After an era, block is expired to received seigniorage and can be exchanged to STC through the block market.