Seigniorage Shares

Seigniorage Shares (SHARE) is the governance and reward token of the Dollar Protocol, an experimental algorithmic stablecoin system that sought to maintain a price-stable digital dollar through supply adjustments rather than collateral backing. The protocol introduced a three-token model consisting of Dollar, Share, and Bond tokens.

SHARE represents a claim on future Dollar supply expansions. When the Dollar token trades above its intended price target (typically $1), new Dollars are minted and distributed to SHARE holders. This model aimed to simulate seigniorage—traditionally the profit made by central banks when issuing currency—within a decentralised framework.

SHARE served multiple roles within the Dollar Protocol:

• Reward Mechanism: During supply expansion phases, newly minted Dollars are distributed to SHARE holders as a reward for bearing risk during contraction periods.

• Governance: SHARE holders were intended to participate in protocol governance, voting on system parameters such as supply expansion rules or peg adjustments.

• Speculation on Growth: Because SHARE does not maintain a price peg, it acts as a volatile asset reflecting market expectations of future Dollar demand and expansion.

SHARE had no direct utility beyond its role in incentivising behaviour that supported Dollar price stability. Its value was driven by projected future issuance of new Dollars.