# Token Overview ## What is GRAI? GRAI is an over-collateralized debt token issued by Gravita Protocol. GRAI can be minted by depositing collateral on Gravita Protocol. ### Hard price ceiling GRAI's Vessels' maximum LTV of 90% with WETH as a collateral creates a natural price ceiling at $1.10. When GRAI exchange rate exceeds that level, borrowers can make an instant profit by borrowing the maximum amount against their collateral and selling GRAI on the market for more than $1.10. If 1 GRAI trades at $1.20 for example, you can lock up $2200 worth of the LST of your choice, take out a loan of 2000 GRAI and sell it for $2400. No matter if your loans gets liquidated or not, you have made an arbitrage gain of $200. Since also bLUSD is a supported collateral asset against which users can borrow at up top 99% TVL, GRAI hard ceiling price could also theoretically be considered $ 1.01. However this specific collateral asset will have mint caps in place to avoid excessive sell pressure on GRAI. ### Hard price floor The ability to redeem GRAI for collateral creates a hard price floor, below which arbitrage opportunities become profitable. We call these "hard peg mechanisms" since they are based on direct processes. ## What is Gravita Protocol governance token? Our governance token will not be deployed at launch. Tune in to learn more about our governance token and learn about it's distribution, emission, vesting schedule etc. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.gravitaprotocol.com/gravita-docs/how-does-gravita-work/token-overview.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.