TurtleDAO Mechanisms
TurtleDAO Monetary Policy
TurtleDAO's monetary policy is crafted to provide an additional incentive through Turtle emissions atop all Turtle Partner Protocol liquidity pools. Our objective is to assist our Turtle Partner Protocols in attracting and retaining liquidity by co-incentivizing and leveraging their TVL at a higher utilization rate. This enables them to transition towards a more sustainable and productive liquidity model over time.
The issuance model of TurtleDAO is designed to enhance the collective bargaining power, security, and network effects of the Turtle liquidity , surpassing the pace of reduction in rewards for Turtle LPs and Turtle Partner Protocols. Consequently, Turtle DAO will adjust the Minting Cost (MC) of Turtle Tokens solely in response to significant growth in Turtle TVL and Turtle TVL (undeployed TVL). This allows the TurtleDAO to transition towards a more sustainable issuance and deflationary rebasement model as the Turtle Protocol expands, rewarding early contributors and increasing the interest-bearing price floor of each Turtle Token in circulation.
Buyback Mechanism: If the market price of TRT falls below its treasury-backed value, the TTC will initiate buybacks and token burns, with increased rates as the price declines.
Turtle Token
The TurtleDAO treasury begins to reflect a distribution of the contributions made by Turtle Partner Protocols and the popularity of their protocols among Turtle LPs. As Turtle onboards more Turtle Partner Protocols, the TurtleDAO treasury begins to accumulate more tokens and diversify across a wider variety of popular tokens in the space. Directing protocol fees to TurtleDAO will allow us to build a robust treasury of interest-bearing assets, supporting the Turtle token.
In contrast to the SPDR S&P 500 ETF Trust (SPY) with a massive AUM exceeding $500 billion and an annual fee of 0.0945% on AUM, Turtle Tokens stand out. Unlike SPY, Turtle Tokens incur no management fees on AUM or TVL. However, Turtle Tokens are not designed to generate passive income for holders, are not a form of participation/contribution/investment in the Turtle Protocol and are not designed as a means of payment. Instead, benefits to Turtle Token holders may come through other technical functionalities and utilities, such as contribution-based rewards (without the guarantee of and legal claim towards a fixed return). How does this work?
No Carry and or Fees - Turtle Tokens do not charge any management fees.
Staking rewards - Turtle Protocols tokens staked within the TurtleDAO treasury compound, increasing the TurtleDAO's holding of Turtle Protocols tokens. This backs every Turtle Token in circulation with a growing amount of each Turtle index toke
Deflationary rebasement - Through our innovative asymptotic Turtle Token issuance model, minting Turtle Tokens becomes increasingly contribution-intensive over time, enhancing the backing of existing Turtle Tokens.
Subscription & Protocol fees - If the Turtle Token community opts to launch a fee-generating membership program and/or service in the future, a portion of those fees will be used to purchase Turtle Partner Protocol tokens to increase the interest bearing price floor of each Turtle Token.
Turtle Token Pledging - employs a strategic distribution model, rewarding Turtle Token stakers who commit to longer term liquidity commitments to Turtle Partner Protocols with additional Turtle Token as staking rewards.
Fee Distribution Model (TRT End Game)
Turtle Protocol operates on a balanced fee distribution model:
50% of Protocol Fees: Users will receive 50% of the protocol fees generated from yield, swaps, and referral boosts. This incentivizes participation and rewards active users.
50% for Buyback and Burn: The remaining 50% will be utilized for buying back and burning Turtle tokens, creating scarcity and potentially increasing token value.
Regulatory Considerations
Currently, direct yield distribution to users is constrained due to regulatory risks, particularly the potential classification of Turtle tokens as securities by Finma. To navigate this, we will:
Focus on Decentralization: Gradually decentralize the protocol to mitigate regulatory risks.
Monitor Regulatory Changes: Stay informed on favorable regulatory developments.
Observe Precedents: Learn from similar projects in Switzerland that have successfully passed on protocol fees.
TRT Token Holder Benefits
Turtle token holders will benefit from fee discounts, allowing them to capture more than 50% of the protocol fees based on the number of tokens held relative to generated fees. This encourages token holding and aligns incentives between the protocol and its users.
Initially we build up a position in popular partner protocols, ensuring that our interests are aligned. Token holders will have the ability to vote on removing underperforming assets from the treasury.
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