  In this paper, we will consider a governance token pricing algorithm that
conducts liquidity operations on AMM (CPMM) DEXs (automated market maker
decentralized exchanges) with liquidity that belongs to a decentralized
autonomous organization (DAO), also called protocol-owned liquidity (POL). The
primary aim of the protocol is maintaining a price peg by determining
algorithmically when and how to carry out interventions that consist of two
steps: extracting liquidity from an AMM liquidity pool and conducting "token
swap" operations. We will cover setting up an optimal peg function as a
weighted sum of certain normalized factors, which are to be determined
collectively by the DAO. In particular, we will review various arithmetic
invariants of liquidity intervention, which brings the price to a peg while
leaving total liquidity intact, and show how such interventions can be
substituted in practice by so-called PMM (proactive market maker) protocols.
