Tobin Tax

If the Celo reserve ratio falls below tobinTaxReserveRatio, a small fee is levied on CELO transfers to discourage further depletion of CELO collateral. This fee is transferred to the Reserve smart contract. There is no gas charged for this transfer. The tobinTaxReserveRatio and the tobinTax are initially set to 200% and 0.5% respectively and are governable.

The total Celo reserve value, expressed in CELO units, is approximated on-chain by dividing the reserve CELO balance by the CELO target asset allocation weight. The Celo reserve ratio is then computed by dividing the total reserve value by the value of Celo Dollar supply expressed in CELO units.