PnL risk takers are people who provide liquidity to the trades. They profit from commission and bid-ask spread. PIZZA team will act as the only risk taker in the game during the early stage. The pool will open to all USDE holders in the future.
Risk takers fund a pool (plvtpnltaker) with USDE, and receive RUSDE as a prof of deposit.
assuming there is one and only one risk taker who deposits 100 USDE in the pool.
His name is Ryan. Ryan receives 100 RUSDE as a prof of deposit.
There is a trader, his name is John. John bought 20 USDE of BTCUP, the price doubles in a day, now it's selling at 40 USDE. John paid 0.1 USDE as commission and takes 20 USDE as profit. Therefore a 20-USDE loss and a 0.1-USDE profit happens to the risk taker's pool.
Now there is 100 + 0.1 - 20 = 80.1 USDE in the pool.
If now Ryan is trying to redeem 50% of his deposit, he will return 50 RUSDE, and receive 80.1 * 50% = 40.05 USDE.
If there is too many PLVTs circulating in the market, traders will have to worry about that the risk taker pool will be underwater.
To avoid this situation from happening, the system restricts the issuance of BULL and BEAR ( or any other PLVTs in the future). There are 2 basic principle for doing so.
First, the total value of circulating BTCUP and BTCDOWN should not be more than 120% of the total value of the risk take pool.
Second, the difference value between circulating BTCUP and BTCDOWN should not be more than 60% of the total value of the risk taker pool.
total USDE reserve >= PLVT exposure / 60%
PLVT exposure = PLVT(long) - PLVT(short)
When this standard is not maintained, the system defines the USDE pool as "insufficient".
Profit and loss takes are obliged to maintain USDE in the pool above a necessary level.