Introducing BuyBack & Burn Program for SEED + Initial approach on 'Management Fees'
As you might know, recently I talked about upcoming management fees on a recent post and how I'm personally against taking 'flat fees' as most investment funds do.
The main problem with this approach is this is a parasitic one and once the fund grows big enough, the interest from the operator goes to simply 'moving funds around' rather than generating a real profit. You wouldn't believe how many investment funds charge outrageous fees and they do the 'minimal work required to just stay in charge. You're the product, not the 'customer'.
A different approach is needed. And this is what I'm intending to do with SEED. Let me introduce the Buyback & Burn Program combined with the new 'Management Fees'. I believe it's a fair approach regarding the good work which I believe I'm doing.
New category: Protocol Controlled Value (or PCV).
(Yes, I'm being influenced heavily by Cubdefi for this one, the name is still provisional).
A new category (or segmentation for the funds whatever you want to call it) is being introduced today in the reports. The 'Protocol Controlled Value' is a number of funds allocated into diverse farms with the sole intention of getting an %APR for the fund itself.
Well, 'technically' we're not a protocol, but you get the point. More details:
- The amount added to this category will equal 5-10% of the overall portfolio. this will be allocated into different farms on BSC and/or other chains, getting the best possible %APR without sacrificing security.
That means that I won't go around YOLO'ing into scam farms for an absurd APR, I'll focus mainly on CubDefi Farms and PCv2 farms. CUB/BUSD, CUB/BNB, BNB/BUSD, ETH/BNB, and these kinds of farm.
With the corresponding rewards, I will do the following:
- 50% of the farming rewards will be transformed into HIVE and I'll set up buy limit orders for SEED (from the @seed-treasury account).
All the SEED bought by this means, will be permanently removed from the supply (sent no @null).
- 50% of the farming rewards will be paid to the fund operator (@empoderat).
Key Dynamics & Implications
Maybe 50% from the farming rewards may seem like a lot, but think about it for a moment.
No 'static' fees are being applied on ALL of the funds. Instead, only 5% of the portfolio is being used as the necessary tool to generate the corresponding rewards.
As the value of the treasury grows, does this 5%. This goes both ways;
=> Higher payment with growing portfolio & higher SEED price
=> Lesser payment with decreasing portfolio value & lower SEED price
=> Interest of holders & operator alligned.
In case of a shrinking portfolio and this category exceeding the 5-10% range, funds are being moved out.
As time passes, more and more HIVE will be stacked into the buy side, creating a higher price floor... with the difference that if this buy wall scoops some SEED, this tokens are effectively out of circulation.
Wen Empo, Wen?
The program is already working behind the scenes.
- A new wallet has been created and roughly the 6% of the portfolio has been allocated. 17500 CUB and 10500 BUSD are already collecting rewards.
However, the movements from this wallet will be done monthly (and compounded every week; p.e. collecting CUB and allocating it into the Kingdom, etc).
The Buyback & Burn will start when the remaining 3,5K SEED being sold on the 25th are full released (full circulating supply).
in practise, this means that the first limit orders for SEED on hive Engine will be placed in the last week of December (I'm giving the farm a bit of a buffer to start accumulating).
This is all for today. You know what? We keep mooning! Currently every SEED (with 96,5K supply) is worth roughly 3,7$ Damn!
Remember you can follow the portfolio in real-time here:
Posted Using LeoFinance Beta