Phase 2: what happens when the curve runs out
Every explanation of this protocol starts with a curve. The curve ends. What replaces it is a different mechanism with different properties, and it is worth understanding before you need it.
Where the curve ends
In Phase 1 the cost of entry depends on one thing: how many tokens have ever been created. The contract computes a price from that count along a published curve, running from $0.001 to $200 across the first hundred million tokens. Nothing else moves it — not time, not demand, not the market price. Mint a thousand tokens today and the price moves by exactly as much as a thousand tokens move it, whether that happens in an hour or over a year.
That has a consequence people miss: in Phase 1 a position held for five years costs the same to open as one opened five minutes earlier, if nobody minted in between. The clock does nothing. Phase 1 charges for crowding, not for waiting.
What replaces it
In Phase 2 the count stops mattering and the clock starts. The contract holds a growth rate and applies it continuously — recomputed every second, not stepped daily or weekly. The rate comes from a fixed ladder, from 5.6 per cent a year at the bottom to 161.8 at the top, and it is the rate, not the price, that governance can move.
Continuity is a design decision with a reason behind it. A rate that stepped once a day would create a moment just before each step when entering is cheaper than a second later, and that moment would attract a rush. Per-second growth has no such moment: there is never a deadline to beat.
Who decides when
The end of Phase 1 is not a date in a calendar. It is set by a vote of holders, like the other parameters the contract exposes. Until that vote passes, the curve governs however long it takes to exhaust it.
The growth rate in Phase 2 is set the same way, with one addition: a rule in the contract, called the regulator, may move it one rung along the ladder per cycle — about forty-one days — when the inflow of collateral into new positions falls outside its usual variation. The regulator has no opinion and no discretion; it watches one number and probes one rung. Holders can switch it off and set the rate by vote alone.
What changes for you
If you hold a position, the change is in what the passage of time does. In Phase 1 waiting is free in the sense that matters here: the cost of entry does not move unless other people mint. In Phase 2 it moves anyway, every second, whether anyone is minting or not. The distance between your own entry price and the current cost of entry widens by the clock.
If you are considering entering, the change is in what you are buying. In Phase 1 you are buying a place in a queue whose price rises as the queue grows. In Phase 2 you are buying at a price that will be higher tomorrow regardless of what anyone else does — which is a more predictable thing to plan around, and a stricter one.
What does not change
Everything that protects you is unaffected. Redemption of a position returns the collateral in full at any time, in both phases. Backing per token is computed the same way. The protection level, the threshold and the headroom work identically. The corridor still has the same two boundaries: backing below, the cost of entry above.
Nor does the direction change. The cost of entry never falls in either phase — that is the property the whole class is named after. Phase 2 changes what drives it upward, not whether it goes up. And as always, none of this is a statement about the market price, which sits between the two boundaries and can move either way.