The Fragments protocol is an algorithmic monetary supply policy and reserve. Its goal is to produce low volatility currencies that can function as both near and long term stores of value.
To stabilize purchasing power, the team increases and decreases supply in response to demand. When the protocol needs to increase supply, it capitalizes a reserve and then splits—proportionally distributing tokens to wallets.
When the protocol needs to decrease supply, the reserve automatically purchases tokens and removes them from supply in exchange for bonds, which are first in line to recapitalize the reserve under expansion.