> For the complete documentation index, see [llms.txt](https://emptysetsquad.gitbook.io/empty-set-v2/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://emptysetsquad.gitbook.io/empty-set-v2/master.md).

# Empty Set V2

![v2 Stability Design Thesis](/files/-MXfHsqwLzateLppvGo2)

### Overview

In this iteration of the Empty Set protocol, we shift from novel mechanism design to usability. We aim to directly solve the need for a perfectly stable, yet censorship resistant asset that can be used as the basis for decentralized finance.

### ESS: Empty Set Share

From v1, we will migrate to a two token model with `ESS` as the governance token, and seignorage share. `ESD` in its current form will migrate to `ESS`, preserving protocol ownership across the upgrade. After launch, the Empty Set DAO has the authority to issue or burn `ESS` as needed through governance.

### DSU: Digital Standard Unit

We will issue a new stablecoin `DSU` and restart issuance from zero. Unlike `ESD`, this stablecoin will be fully backed and `1:1` redeemable. We aim to solve the censorship resistant problem directly without resorting to a novel synthetic stablecoin model which will provide significantly greater stability and security.

### Stability

The primary mechanism for stability will be the ability to mint and redeem DSU from the reserve 1-to-1 with USDC. This will give DSU perfect stability and unlimited contractibility, two properties essential for real usage.

Future experiments enabled by decentralized governance may pave the road for a capital efficient model, but we do not necessarily endorse any particular model at this time, rather we wish to enable this path to maintain competitiveness with future algorithmic stablecoin developments.

### Revenue

Governance may vote to purchase and burn some amount of `ESS` with the reserve when `RR` is above target as a result of yield generated from reserve management.

### Migration

To migrate from v1 to this new model, a series of proposals will be made to pause regulation and bonding in the current DAO. From this we'll be able to solidify the final total supply of v1 `ESD` and `ESDS`.

To ensure all ESD holders have a fair conversion rate, ESS will be migratable:

*  `1:1` from `ESDS` 
* `1:n` from `ESD` , where `n` is the final v1 bonding `ESD:ESDS` exchange rate

The final v1 migration proposal with pause governance and grant ownership over the v1 DAO to the v2 DAO.