🧮 Floorline Rule

The Floorline Rule is a core safeguard in Hikari. It guarantees that every circulating token can always be redeemed at the current floor price or higher, regardless of market conditions.

This rule is enforced at the protocol level and ensures that liquidity commitments are always backed by real assets.

🔍 What It Means

The amount of active AUSD liquidity in the system must be sufficient to buy back all circulating KARI tokens at the floor price. This ensures that the redemption guarantee is always credible and enforceable.

Key details:

• Only tokens held by users are counted as circulating

• Tokens still in liquidity pools are excluded from this calculation

• All AUSD in active price ranges is considered, not just the liquidity sitting at the exact floor

🧠 Why It Matters

The Floorline Rule provides several important protections:

• Users can always exit at or above the floor price

• The system is never overcommitted beyond what it can actually support

• The floor price guarantee remains trustworthy and solvent over time

This mechanism builds long-term confidence in Hikari’s core promise.

⚙️ How It Works

The rule is mathematically expressed as:

Circulating KARI × Floor Price ≤ Total AUSD in active liquidity

Before any new KARI can be minted or liquidity can be rebalanced, this condition must be met. It acts as a built-in check to maintain solvency and integrity within the system.

🛡️ Summary

The Floorline Rule ensures that:

• Only tokens purchased and held by users are guaranteed at the floor price

• Liquidity is always sufficient to cover all potential redemptions

• The system remains healthy, balanced, and transparent

It’s a simple but powerful mechanism that underpins the strength of Hikari’s floor price model.