The Mathematics
Three equations describe the entire system.
L = total ICE liability (USD), V = vault BTC, P = BTC price, Nfire = FIRE supply.
r = (V·P) / L
Reserve ratio
vault value ÷ ICE liability
vault value ÷ ICE liability
ICE = $F
ICE redemption
fixed face value, paid in BTC at the spot price
fixed face value, paid in BTC at the spot price
FIRE = (V·P − L) / Nfire
FIRE per token
residual vault value, split across FIRE supply
residual vault value, split across FIRE supply
L stays constant in dollars while V·P moves with the market. So FIRE absorbs all the volatility of the vault, and a small percentage move in BTC produces a larger percentage move in FIRE — that's where the leverage comes from. Where the chaos goes, ICE stays still.
Live Simulator
Move the sliders. Watch the system respond.
Each ICE token redeems for its USD face value at mint (minimum $100). FIRE tokens share whatever the vault holds beyond the ICE liability — change the supply to see dilution.
Current zone
Healthy
FIRE redeemable · ICE mintable · ICE appreciation active.
Vault value
$1.00M
10 BTC × $100,000
Reserve ratio
5.00×
Vault ÷ ICE liability
FIRE pool (USD)
$800K
Vault value beyond ICE liability
FIRE per token
$0.80
$800K pool ÷ 1M tokens
Capital stack (proportions)
The Strength of the Magic
Three thresholds govern what's possible.
As the reserve ratio crosses each line, the protocol shifts what's allowed.
5.00×
0×2×4×8×+
Scenarios
What happens when BTC moves from here.
Holding the vault and ICE outstanding constant; only BTC's price changes.
BTC −50%
FIRE per token$0.30
FIRE % move-63%
FIRE pool$300K
Reserve ratio2.50×
BTC unchanged
FIRE per token$0.80
FIRE % move0%
FIRE pool$800K
Reserve ratio5.00×
BTC +100%
FIRE per token$1.80
FIRE % move+125%
FIRE pool$1.80M
Reserve ratio10.00×