5.2 USO: Governance Participation and Ecological Buffering of Stability Mechanisms

As a stablecoin, USO does not undertake core governance functions, but its holders have exclusive governance rights in areas related to "maintaining system stability" and are the "balancer" of the governance system:

1. Voting power of stablecoin parameters The core mechanism parameters of USO need to be adjusted by USO holders to ensure that the stablecoin design is in line with its positioning as a "store of value and medium of exchange":

·Dynamic collateral rate threshold adjustment: The safety threshold (e.g. 150%) of the USO collateral rate (collateral value/USO issuance) can be modified by the USO holder's proposal to deal with different market environments (e.g. bull market can appropriately lower the threshold to improve capital efficiency, bear market needs to increase the threshold to enhance anti-risk ability);

·New type of collateral: If the community proposes to include a cryptocurrency (such as SOL) or physical asset (such as gold RWA) in the USO mortgage pool, it needs to be supported by more than 50% of USO holders and meet the "risk factor ≥ 0.6" (assessed by the dynamic risk pricing system);

Liquidation rule optimization: When a collapse in collateral prices triggers liquidation, the adjustment of parameters such as the liquidation discount rate and auction cycle requires USO holders and LNK holders to vote jointly (each with 50% weight) to balance the interests of stablecoin holders and mortgagors.

1. Coordinated Management of National Treasury Reserves The USO treasury (mainly stable assets such as USDT) is a "cushion" for the system to deal with risks, and its use is subject to the supervision of USO holders:

·80% of the treasury funds need to be used for "USO stability maintenance" (such as repurchasing unanchored USO, replenishing collateral), and the remaining 20% can be used for "ecological expansion" (subject to USO holders voting);

·When the LNK price plummets and USO treasury funds need to be used for repurchase, the single use amount shall not exceed 10% of the total treasury, and USO holders shall urgently vote (completed within 24 hours) to avoid excessive consumption of stable reserves.

USO holders can regularly initiate a "Treasury Audit Proposal", requiring the core team to publicly disclose the flow of funds (available on the chain), ensuring that every expenditure is in line with community consensus.

1. Risk Mutual Insurance Mechanism with LNK USO and LNK form "risk sharing" through governance mechanisms to enhance the overall impact resistance of the system:

·When there is a funding gap in the USO mortgage pool due to extreme market conditions, USO holders can initiate a proposal to unlock part of the LNK reserve (no more than 5% of the total) and exchange it for USDT supplementary collateral, and the proposal needs to be supported by more than 60% of LNK holders at the same time.

·When the LNK price is lower than the consensus price for a long time (more than 30 days), LNK holders can propose to "issue USO bonds" and use USO treasury funds to buy back LNK in a targeted manner. This operation requires USO holders to confirm that it "does not affect their own stability" (the mortgage rate is still higher than the safe threshold);

This mutual insurance mechanism is realized through the cross-voting of dual coin holders, avoiding the short-sighted behavior of a single token group "sacrificing each other's interests".