What is the Treasury
The treasury is a portion of the Altruism Protocol ecosystem that holds a store of value. As users purchase tokens through the bonding mechanism, funds are added to the treasury. These funds are used to create a stable price floor for the token.
The price floor acts as the lowest price that the token can be traded. This ensures that the token will always have a minimum value. If the price were to hit the price floor guaranteed by the treasury, the purchase function would start to buy tokens, keeping the price up. Simultaneously, the bonding mechanism will reduce the discount for bonding purchases until it approaches zero. This will stabilize the price at the price floor of the token.
While this happens, all transactions involving $ALTRU will be generating rewards, increasing the value of remaining staked rather than selling. Tokens purchased by the price floor system will automatically be burned. This, combined with the increase in rewards during any hypothetical massive selloff, acts as a balancing force to increase the value in having the token staked, slowing the selloff.
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