# How Does This Ecosystem Work?

The protocol's underlying mechanisms dynamically adjust $GLDM's supply, pushing its price up or down relative to the price of gold. It does this primarily by only allowing more tokens to be minted when the protocol knows that its $GLDM token is trading above peg on the open market!

So, GoldMint is not a traditional stable-coin - the protocol does not have gold in a vault. This is an experiment in decentralized finance, it is not backed by gold or any other asset, it is a dApp utilizing an algorithm on the Ethereum blockchain which changes the way its own tokens are issued and the number of rewards distributed to keep its price point as close to the price of one oz. of gold as possible. 

This is important to understand. Sometimes this token may trade for more than the going rate for an ounce of gold, and sometimes it may trade for less than the price of an ounce of gold. What is impressive is that the contract knows which of the two is happening at any given moment, and it changes itself accordingly. 

The protocol has the ability to check its own price. This allows the algorithm to adjust the token’s supply, APR and various rewards mechanisms to keep itself at or near the desired price point, which in our case is the price of 1 troy gram of gold.

It is inspired by Tomb and other algorithmically stabilized tokens such as Basis as well as its predecessors like bDollar. $GLDM is based on stable and proven code utilized in a new and innovative way.

If you are interested in acquiring some GoldMint tokens, that’s great! All we ask is that you participate in the health and well-being of the protocol and be a good community member. We are not selling these tokens, we are only giving them away to community participants.


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