> For the complete documentation index, see [llms.txt](https://basedrate.gitbook.io/based-rate/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://basedrate.gitbook.io/based-rate/protocol/expansion.md).

# Expansion

At the start of each epoch, the protocol checks the time-weighted average price (TWAP) of $BRATE. If the TWAP is greater than or equal to 1.001, new $BRATE tokens will be minted in the boardroom. The specific amount of new $BRATE tokens minted during this process is determined by the current circulating supply of $BRATE.

We chose to set the peg ratio at 1.001 for the BRATE-ETH LP, considering the unique characteristics of a sAMM (Stable Automated Market Maker) system. In a sAMM, stability and sustainability are paramount. The 1.001 peg ratio was selected to create a more balanced and sustainable equilibrium within the LP. This decision aligns with the principles of a sAMM, where precision in maintaining pegs is essential for the stability of the ecosystem. By using 1.001, we ensure a tighter and more consistent peg that benefits the entire community participating in the BRATE-ETH LP.

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Flexibility and Adaptability: Expansion and Rates Subject to Change for the Health of $BRATE
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