42. How does the mortgage redemption mechanism achieve market pricing?

Answer: When the demand for DW20 in the market is greater than the supply, the price of DW20 rises, and customers holding Bitcoin can mortgage Bitcoin to issue DW20. According to a 50% mortgage rate, for every 1 USD of Bitcoin mortgaged, 0.5 DW20 worth can be issued. This step is to inject liquidity and increase the supply of DW20 coins, which in turn causes the price of DW20 to fall. In the same way, when the demand for DW20 is less than the supply, the price of DW20 falls. Customers can redeem and destroy the DW20 issued as collateral and, at the same time, withdraw the mortgaged Bitcoin. At this time, the supply of DW20 in the market decreases, and the price of DW20 rises.

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