The price of ABI may very well trade at $0 while the RFV is at $100. In such a case, Abachi will allow people to sell the ABI back to the treasury at RFV to lend price support because the price is below the RFV. This ABI will be bought and burnt. Abachi will use either its OHM or Stables backing to complete these purchase backs. This stabilizes the price of ABI to function and removes any supply from circulation that is not needed anymore.
The protocol will put in place limits and thresholds for buy backs, to ensure there is no attempts to force the price down using the buy back. The thresholds will be announced at a later stage while we build out the protocol, however we have proposed 1% of outstanding supply per day (3 epochs) be bought back this way to allow the protocol and ABI price to settle in volatile markets. This is important for the protocol to function as most core services rely on these fees to be estimated.
This is an important concept to grasp and understand which is different from other DAOs that manage a treasury against value appreciation.
The buy back and burn mechanism lends security to the protocol by ensuring none of our lending pools, wallets, or any other services mentioned in Abachi core are affected in anyways and can keep functioning during market volatility.
The mechanics may be changed in the future as we research and build out the protocol.