Hodl Finance DAO - Bonding Treasury Lifecycle
Since the ICO era, venture capitalists have led cryptocurrency investment rounds. However, as a DAO should be entirely decentralized, its fundraising should follow suit. To maintain full decentralization, the HFD community opted for a Bonding Treasury as a fundraising method. This treasury holds 400 million $HFD, equivalent to 40% of the total supply, which is locked and available for swapping against $ETH, $USDC, or $USDT at any time.
What is a Bonding Treasury?
A Bonding Treasury enables decentralized fundraising and generates liquidity for HFD and so for the entire crypto market. Investors can acquire discounted $HFD tokens by swapping against the Bonding Treasury and locking them in the Staking Contract for a predetermined period. This allows investors of all sizes to participate and maintain control over their tokens.
Why a Bonding Treasury?
The community has endorsed the Bonding Treasury for its multifaceted benefits, including generating liquidity, offering discounted $HFD tokens to long-term supporters, and addressing market-wide liquidity and infrastructure issues. By functioning as the primary liquidity generator for the HFD ecosystem, the Bonding Treasury uses funds raised to support Market Making activities and ensure the efficiency of the DAO's algorithms. Liquidity is allocated for purchasing tokens/coins and executing Market Making strategies that yield Realized Profits. These profits are then channeled to various treasuries and utilized for $HFD token buybacks, creating a self-sustaining ecosystem that benefits all DAO participants.
How does Bonding work?
Swapping $USDC, $USDT, or $ETH for $HFD through the Bonding Contract is simple and accessible. Bonds can be purchased at a discount, with the discount rate depending on the selected locking period. The tokens are automatically locked in the Staking Treasury, and the funds are directed to the Trading Treasury for Market Making. The DAO uses 65% of Realized Profits for unpredictable $HFD buybacks, ensuring liquidity and offering opportunities for new investors.
Locking periods of the bonding?
The locking periods and discounts are the following:
- 1-year locking period in the staking contract - 5% discount on the market price
- 2-year locking period in the staking contract - 10% discount on the market price
- 3-year locking period in the staking contract - 17.5% discount on the market price
- 4-year locking period in the staking contract - 27.5% discount on the market price
- 5-year locking period in the staking contract - 40% discount on the market price
- Step 1 - Select bond payment ($USDC, $USDT, and $ETH).
- Step 2 - Select the number of tokens for the purchase.
- Step 3 - Select your lock period; this can not be changed afterward.
- Step 4 - Accept the automatically generated quote.
- Step 5 - Accept the smart contract transaction in your wallet.
- Step 6 - The tokens will be automatically locked in the staking contract.
- Step 7 - You will receive $eHFD for voting purposes and to unlock the tokens after your locking period.