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$FACTR
A well-designed token is the best means of coordinating a network, aligning interests and incentivising ecosystem growth.
$FACTR is the native token of the Defactor ecosystem. The token is designed for the following use cases:
Network access: The $FACTR token is required by asset originators to access the Defactor platform and services. The AO's tokens will be locked in a smart contract for the entire funding term thus decreasing circulation. AOs may be required a fee for each funding term.
Governance: In the medium term, $FACTR will introduce a governance model to manage and optimise the network. It will allow token holders to participate in community decision-making.
Staking: Token holders that stake $FACTR will receive rewards. Staking locks the tokens in smart contracts for a fixed period of time. Rewards are correlated to time staked. Currently, the lock-up times and APY are as follows:
Buy-back model: Defactor will allocate a portion of revenue to buy back the $FACTR token on a regular basis.
Defactor will allocate a portion of revenue to buy back the $FACTR token on a regular basis. Buybacks are a way to redistribute tokens to the community. Buyback and Make is an alternative to Buyback and Burn, that uses a protocol treasury implemented as a network-owned Balancer “smart pool”.
Buyback and Make Model according to Joel Monegro's article - Stop Burning Tokens – Buyback And Make Instead.
Balancer is a programmable liquidity pool and decentralized exchange that has created the concept of smart treasury pools. Smart treasury pools have multiple functions including:
- 1.Automatic Buyback Machine. Platform-generated revenue is deposited into the pool in the form of ETH and imbalances the pool. The pool mechanics automatically seek to regain balance by selling the excess ETH for FACTR (ie. buying FACTR). As platform revenue enters the Smart Treasury, buybacks are initiated in real-time and are automatically managed by the Balancer protocol. Increasing efficiency and automaticity of the protocol.
- 2.Token Issuance Pool. An issuance schedule will be set according to the tokenomics to incentivise ecosystem contributors (AOs/LPs/Active Holders). Only Defactor can add and remove liquidity from the pool, allowing Defactor to withdraw FACTR incentives the Smart Treasury. The network’s issuance model will be executed by a smart contract.
- 3.Liquidity Provider. The Smart Treasury acts as a liquidity provider. The assets in the pool are available through the Balancer decentralised exchange. Buyers and sellers of FACTR have guaranteed liquidity because they can always trade against the protocol itself – and token holders have certainty about the economic value of these transactions.
For those that want to understand Balancer and Smart Treasury pools at a deeper level - read this great article by Joel Monegro.
Last modified 4mo ago