In this article, we want to deconstruct the Concave Treasury flywheel.
We’ll take a look at each part to better understand what makes our ecosystem flourish and how this feeds value back to you, our beloved community of steakholders.
What is a flywheel?
A flywheel is simply a positive feedback loop.
A spiral of greatness that expands outwards, creating positive growth from its own products and services. A fully self-sustainable ecosystem that inhales value and exhales revenue-producing products.
Do you need any more metaphors? Cause we’ve got em’ and you can be sure we embody them all!
Each part of Concave is designed to feed value back to the treasury, which is actively managed to create more profits that are then siphoned back and distributed to stakers.
Great products and their subsequent returns encourage more users, more users create more value (which creates more demand for great products) and so begins the circle of life.
Don’t just take our word for it though, have a peek at what our flywheel consists of so you can decide for yourself.
What makes up our flywheel?
Concave has and will continue to develop innovative USPs that generate revenue for the treasury.
At present we have released three products that are deployed actively generating revenue to the treasury and one is set to be released very soon.
Let's take a look at each of them, shall we?
Smart bonding is our unique take on traditional bonding mechanics.
It has been designed to support plug-and-play models, which allow us to constantly innovate our pricing and bonding models without the need to redeploy smart contracts.
Concave is an agile co-op after all, so why wouldn’t our bonding machine be too?
Bond issuance is controlled and optimized by an off-chain algorithm to ensure we always remain responsive to volatile market conditions.
In addition to this, we will be offering our partners additional services (to be announced soon), which will further increase revenue to the treasury!
Concave’s very own AMM - Gemswap
Owning our own AMM allows us to better control bonding operations. For example, when bonding occurs we are able to freely control the proportion of liquidity added via our Bonding Machine. This flexibility is only made possible through owning our own market maker.
On top of having control of bonding, we have been able to create a superior AMM to current competitors. We don’t need to wax poetic here when we can just give you the hard numbers:
0.25% swap fees
15% Less gas on trades
Liquidity pools 80% cheaper to create
That's some rock-solid value right there.
When creating our innovative bonding/staking model, we wanted to fix the current problem of long-term stakers being diluted in favor of bonders.
We don’t want either to be favored over the other, as we are the embodiment of WAGMI after all. This wonderful harmony was achieved by capping the volume of CNV that is allowed to enter our non-dilutive pools.
By separating stakers into different pools, we are able to deflect the dilution down to the shortest term staking pools. This allows the long-term stakers to maintain an undiluted position for the entire duration of their staking period.
If all of this wasn’t enough, every locked staking position is represented by a tradable NFT. “Where can I trade it though!?” we hear you scream. Read on Anon, read on.
NFT Marketplace (coming very soon!)
So now you’re all jazzed up from the liquid staking, we thought we would hit you with the 1-2 combo and drop some knowledge on our homegrown NFT marketplace that will be dropping soon.
As mentioned above, every staked position will be freely tradable. This means if you find yourself in a tight spot and need some liquidity, you can sell your position at a discount of your choice.
Yes, this also means you can pick up a tasty bargain on someone else's position. Don’t worry, you will also receive all profit-sharing rewards for the quarter after buying a staked position off the free market.
When users interact with our products, they are charged a fair and market competitive fee which is collected and added to the Concave Treasury alongside all other revenue collected from Concave's many other endeavors (more to come on this! For an idea of the direction we are taking, please see this blog post).
What good is a treasury if it isn’t put to use? We work hard to find the best (and safest) strategies for the Concave treasury, to insure we can grow sustainably without yeeting all of your money on a moonshot.
Following are the strategies we are currently employing:
Concave has set up a base risk-return portfolio to ensure yield is generated using our stable treasury assets. At any time you can visit our Treasury Overview to see what strategies we have employed and the revenue they are generating.
As markets change and tend towards volatility or bearishness, we actively adjust our allocation of treasury funds in stable farms to reflect this.
Did you forget that we’re agile? Shame on you!
A delta-neutral strategy aims to reduce, hedge or eliminate the risk associated with price fluctuations in the market.
We have worked long and hard on our proprietary algorithms to manage cross-chain positions on multiple yield-bearing strategies. These strategies balance positive and negative deltas (risk) so the overall delta equals zero.
Concave's team consists of an ever-expanding group of hard-working and well-connected people, who have been active in the crypto space for many years.
This collective network provides access to many seed investing opportunities, which are painstakingly vetted by our policy team chads for their tokenomics and market viability.
Once a product is released it requires little upkeep, which now leaves us with the manpower to create more innovative products. This, my friends, are the beauty of a flywheel.
We work hard to bring as much value as possible to our treasury and thus fuel the ever-turning flywheel. You can be sure that we aren’t stopping any time soon either, so buckle up and let us do the driving.
And there you have it. The circle of life is laid out before your very eyes.