The NACHO community has impressively risen to the challenge of climbing back to peg under the proper circumstances such as cheap NACHO, limited liquidity and timing mixed with a little bit of a calm summer.

Nacho Finance - Achieving Peg on their Algorithmic Stablecoin

Spicing things up is what the good Chefs at Nacho Finance are good at, as Nacho’s 1000:1 peg against ETH draws close again going from below 0.3 just one month ago to bouncing back and forth between 0.8 and 0.9 over the last week! It just shows how committed the dev team is to offer the best finger licking plate out there.

What is the Nacho Peg?
The value of the native share token, NACHO, in relation to its peg partner, ETH, is represented by a number known as the peg for a seigniorage-based algo-stablecoin. The development team decided to peg NACHO to ETH at a 1000:1 ratio. The TWAP (time-weighted average price) for NACHO is in a balanced "at peg" state when it is between 1.00 and 1.01, which indicates neither inflation nor contraction.

Any peg value less than 1.00 denotes an excess of NACHO in relation to the price of ETH, driving the price down and initiating a protocol contraction phase where NBONDs are made accessible in return for NACHO, burning supply. Small fluctuations like these are typical for an algo token.

Any peg value higher than 1.00 denotes an higher price for NACHO in comparison to the price of ETH, bringing about the protocol's expansion phase when the Time Weighted Average Price (TWAP) hits 1.01, during which staking NSHARE in the Bowl generates new NACHO to increase supply, rewards for liquidity pools rise, and above-peg NBONDs are available to buy NACHO at a discount. During this period, price increases for NSHARE and NACHO are typical.

In order to dynamically control the supply of NACHO and drive its price up or down in relation to the price of ETH. These are just the basics, since the chefs keep cooking Nacho Finance’s expanded protocol has numerous awesome mechanisms that allow for greater supply management.

Reaching peg is not always obvious
The quantity of tokens needed to establish peg balance will always depend on a number of additional variables, such as a project's TVL and liquidity. However, holders' actions influence it the most. The protocol stays above peg for a longer period of time when the majority of holders act with sustainability in mind. This involves reaping rewards during an expansion phase while balancing those withdrawals with new stakes in the protocol using NACHO and NSHARE rewards.

During an expanding phase, the Bowl becomes noted for high daily APRs, sometimes reaching more than 10% for a period of time. This draws a lot of fresh participants and wallets, some of which are from other Tomb forks. Growth quickens as newcomers acquire NACHO, invest in LPs, get NSHARE incentives, and then invest NSHARE to acquire additional NACHO. The procedure is sound. What lies beneath, however, is unstable, since liquidity locusts (short-term pump and dumpers) liquidate all of their assets to invest in a new Tomb fork when daily APRs sink to just a few percent per day. In no time, there is a significant overstock, and the project falls short of the peg.

A great community of hungry Nacho enjoyers!
Since liquidity is so low, less input is needed to make a difference. Which means that now, significantly lesser levels of NACHO have a much greater impact than they did three months ago.

The NACHO community has impressively risen to the challenge of climbing back to peg under the proper circumstances such as cheap NACHO, limited liquidity and timing mixed with a little bit of a calm summer.

Nacho is getting back on track with new recipes and secret ingredients for a game changer draws near!

What happens when reaching peg?
Nacho isn't a full replica of Tomb. There are several additional ways to reap rewards while maintaining a healthy protocol, including single-sided staking, compounders, the upcoming spec matches, a DeFi-NFT project, and DEX.

The greatest way to engage in this discussion is via Discord, where the amazing Nacho community will break down and talk about the best way to improve the chefs’ recipes.

Reaching for The Bowl
An expansion phase begins when the NACHO's TWAP (time-weighted average price) reaches 1.01. NSHARE stakes in the Bowl will result in rewards of NACHO in six-hour intervals known as epochs.

The clocks will be reset if there is any interaction with the Bowl. This equates to three epochs (18 hours) to withdraw your NACHO rewards and six epochs for NSHARES unstaking (36 hours).

You can stake NSHARE to receive $NACHO rewards, claim them or continue to stake NSHARE rewards that you earned elsewhere.

What to do with NACHO (besides eating them) after you get them from the Bowl?
Several alternatives are available in the farms and LPs once you have acquired NACHO prizes from the Bowl. Numerous NACHO veterans advise taking a balanced approach to the available possibilities.

Single-sided Staking
You can earn NSHARE by staking your NACHO in the Nacho Farm. Check the APRs from time to time here as you may find then quite good sometimes.

You can earn NSHARE by combining your earned NACHO tokens with fresh wETH on NachoSwap and then staking it in the NACHO-wETH LP. It is advised to utilize new wETH in this pairing because exchanging NACHO for wETH will lower the value of NACHO.

You can increase your NSHARE earnings by staking new MATIC on NachoSwap together with your earned NSHARE tokens (this is an alternative to staking all NSHARE in the Bowl). It is advised to utilize new MATIC because exchanging NACHO for MATIC in this pairing will decrease the value of NACHO.

Take profits and get you some well earned dinner
Browsing https://www.nachoxyz.com/ might fire up your appetite, so why not take some profits to get yourself a big bowl of cheesy nachos?

Always take a portion of your NACHO and NSHARE rewards (10–20%) as profit along the road . If you take too little, you'll put yourself in danger when things are tough. If you consume too much, the protocol's longevity will be harmed. It's incredible how well a community of holders can work together.

The Oven
The Oven can be used in both above-peg and below-peg circumstances, hence it cannot just be addressed in above-peg settings. Read the documents to have a thorough understanding of NBONDs. There are a few crucial events that occur when TWAP regularly pushes just over and below 1.00-1.01, which is very healthy.

Above-peg Bonds
When available, trade wETH for NBONDs. They must first linearly vest for three days before being claimed. Once claimed as NBONDs, you may either exchange them for NACHO at a discounted price or feed them to your NFT Luchador at the Gym to get a 4x discount on NACHO.

Below-peg Bonds
When NBONDs are offered, exchange them for NACHO, which burns NACHO to reduce supply and help the price stabilize. Once the protocol is merely above-peg, you can exchange your NBONDs for NACHO. You can feed them to your luchador NFT at the Gym during the contraction phase to get a 4x value over NACHO.

The Luchador NFTs - Great in concept, best in practice!
Things start to get extremely intriguing at this point. Read this Medium article to learn more about how Luchador NFTs are fed and grown. Luchador NFTs are upgradeable NFTs that you can use to improve your odds of succeeding in token battles.

A Luchador's weight (expressed in kilograms) is increased by 1x or 4x, respectively, when NACHO or NBOND are fed to them. Your Luchador's speed, strength, stamina, style, or health will all improve as he gains weight and works out in the gym harder and quicker. His LVL (level), which is crucial to the outcomes of battles for tokens, is influenced by these five skills.

Grow it
Mint a brand-new Luchador here, or purchase one from the open market. Feed him NACHO gained from NSHARE staking or NBOND swaps at the gym after you've bought him. Then, using NACHO to practice the various skills, unlock and upgrade the skill gyms. Upgraded gyms train the Luchador more quickly and may train many Luchadors concurrently.

Fighting a Luchador - A work in progress
There are various methods to earn money by using your trained Luchador in the ring. The first will be Spec Matches, which will be categorized by weight class and give competitors the ability to gamble NACHO against another NFT-holding opponent for the chance to earn NBOND (and maybe NSHARE). Your chances of winning increase with your LVL and talents. Additionally, competitors will be able to perfect their skills by taking on a House Bully NFT. Even spectators can place bets on games. After the Spec Matches, there will be a live 3D fighting game where participants will face off against one another in NFT.

Now is a great time to try out the protocol, get some NSHARE to get it staked and buy up some NACHO to help the growth to peg and see what happens when the project reaches that milestone again.

We embrace the Spec Matches idea with excitement, Nacho developers have been working hard day after day to please the community and create the best earning and NFT platform on Polygon! And as always, A Nacho a day keeps the hunger away!

Project Links:
Website - https://www.nachoxyz.com/
Docs - https://nachoxyz.gitbook.io/nachoxyz.com/nacho-finance/about-nacho-finance
Discord - https://discord.com/invite/nacho-finance
CoinGecko - https://www.coingecko.com/en/coins/nacho-finance
Nomics - https://nomics.com/assets/nacho2-nacho
Twitter - https://twitter.com/nacho_finance
Telegram - https://t.me/nachofinance

Written By

Petrache Ionut

Aug 11, 2022