Allison deposits 10,000 mUSD into mPOWER staking, when the exchange is 1.0. Allison receives 10,000 mPOWER in return for his 10,000 mUSD.
Other users stake a combined 90,000 additional mUSD, making the total staked amount of mUSD 100,000.
Now we have 100,000 mPOWER in total, and 100,000 mUSD in the mPOWER staking contract.
10,000 mUSD are now sent to the mPOWER reward contract, making the total amount of mUSD in the contract 110,000 now (learn where mUSD rewards come from below).
Since the total amount of mPOWER is still 100,000, but the mUSD shared among stakers is 110,000, the exchange rate (ratio) will now be 1.1 mUSD per mPOWER.
Allison can now redeem his 10,000 mPOWER to receive 11,000 mUSD in return.
Any new mUSD deposits at this point will receive mPOWER at the current exchange rate of 1 mPOWER per 1.1 mUSD (as per this example).

How Does mPOWER Get Additional mUSD?

There are numerous sources of mUSD for the mPOWER holders:
  • 20% of all mUSD minted on expansionary epochs will be deposited for mPOWER holders. This comes from the protocols mUSD allocation and has no negative impact on WSHARE staking.