Traditional DAOs vs Abachi
It is important to understand that Abachi is not a DAO when it will launch. Governance of Abachi is not dependent on the number of tokens you hold. While we are committed to moving Abachi to a completely decentralised and DAO structure, this will happen in the future when legislations around DAOs are clearly defined. Please read on our governance section on how we plan to do it, also read the disclaimer to understand the risks and issues related to this. Once the staking contract is launched the governance will move to a DAO with treasuries also moved to multiple signers. Here are some important considerations to keep in mind:
ABI is a utility token which powers all core services, and the staking mechanism only provides a minimum viable price backing for the token. It does this by utilising a portion of its current treasury to buy back and burn the token removing it from circulation. As the price of the token fluctuates, the supply of the token will also fluctuate based on demand and the need from core services.
Governance of the protocol and community contributors will have a say in protocol decisions and we will be publishing everything in an open and transparent way. Read more about governance here. When Abachi does indeed move to a decentralized autonomous organizational structure we may make changes to governance however this should not be assumed.
Abachi token itself carries no value. The value of the token is created as more services are added and use the token. This drives a burn and buyback mechanism. The second way the protocol tries to keep itself healthy to grow is to acquire OHM as much as possible to bootstrap its treasury. We strongly believe OHM is that asset. This is no different than any other protocol keeping their treasury in their own native coin. e.g. Ethereum Foundation keeps a healthy portion in ETH and Block.One acquried bitcoin for its treasury.
As inflation increases throughout the protocol with staking rewards, the protocol will try to balance its staking rewards and may bring them down. There will only ever be a maximum of 10 million ABI tokens that can be minted.
APY on staking calculations in Abachi are based on current circulating ABI, number of stakers & RFV.
If the number of people staking goes down, the protocol will increase its staking rewards to incentivize more people to stake.
If the price falls below the RFV the protocol will try and maximise to increase the treasury holdings to lend ABI a minimum viable price support. It does this by acquiring more OHM and discounting stable coin minting of ABI (bonds).
The backing price of ABI has absolutely no bearing on market price of ABI as the protocol will never go back and buy ABI from the market. The treasury is utilised as outlined in our treasury section.
Abachi uses the open source Olympus DAO code and technology to let users deposit and mint new tokens, and also stake them. It does not use all the calculations Olympus currently uses to maintain its BCV, RFV and Backing.
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