“An Image is Worth 16x16 Words”. Here we present you with some diagrams to better understand (hopefully) what TLT Finance is about, alongside a very brief explanation of each component. (For more in-depth information, please read all our Medium posts).
The purpose of Phase 1 was to provide a farming environment where PHZT, a governance token could be obtained. The community could then use PHZT in order to create and vote on Proposals (Governor). These proposals aimed to allow the Community to control the direction of the Project. **You can check more details here**
Phase 2- (Current Phase)
This phase involves the creation of an elastic supply Token, FRT (Frequent Rebase Token) which main purpose is to leverage on the transactions done inside the Governor (Propose, Vote, Queue, Execute) by rewarding community members with a certain amount of FRT for each transaction.
FRT is also a token that can be farmed. For that, 3 pools have been created, each one with a different rate of rewards.
- FRT-DAI UNI LP — Pool 1.
- PHZT-ETH UNI LP — Pool 2.
- PHZT — Pool 3.
The rewards are distributed using the following calculations.
Where initialReward is a ceiling that is particular to every pool. DURATION is the reward period that is set to 7 days (604800 seconds)
- Pool 1 initialReward = 1500 FRT
- Pool 2 inititalReward = 2000 FRT
- Pool 3 inititalReward = 1000 FRT
Rewards for a particular user are proportional to the quantity of tokens that they have staked on the pool and taking into account the Total of staked tokens that exist in that Pool.
FRT is an elastic supply token, due to that, reward distribution needs to consider the variation of the Total Supply at the moment that the reward is issued.
** reward=reward * (nowTotalSupply) / (origTotalSupply)
The above calculation just takes into account the current Total Supply (nowTotalSupply). The origTotalSupply refers to the 100,000 FRT that were originally minted at the creation of the Token.
After the DURATION period ends (7 days), the reward rate will be decreased by 25% and a new period of rewards will start. **The rewardrate can be managed using the Governor, and by creating Proposals users are able to modify it in order to suit the Community**
The main quality of FRT is its elasticity. This kind of token can modify its Total Supply in order to accommodate to the Market Needs. In the case of FRT, it is paired with DAI and will always try to achieve a value as close to 1 DAI as possible.
Elasticity is achieved through a process called Rebase. A Rebase will check the current price of FRT (Taken from a Uniswap FRT-DAI pool) and will increase the Total Supply of FRT if the ratio of FRT to DAI is higher or reduce the Total Supply of FRT if the ratio is lower. In other words, it will always try to level the pool ratio to 1:1.
For a true elasticity to happen and to correctly keep the value of FRT close to DAI, the amount of FRT that exists everywhere will change accordingly. This includes the FRT that holders will have in their accounts. **Do Not Panic** when you see that the FRT that you hold changes after a rebase. It is a normal operation.
Think about it in this way. Instead of your tokens losing or earning value, they will increase or decrease in quantity.
Rebase is a manually triggered event that can occur every hour. Anyone willing to rebase can do so and will earn a random amount of FRT (Not more than 100 FRT).
These rewards are handled by the Treasury, which also manages the rewards obtained by interacting with the Governor.
reward = initReward * (rate) / (1000)
The initReward for the Treasury contract is 1000 FRT.
The rate of FRT rewards that the Governor issues for each operation is as follows:
- Proposing — 4
- Voting — 1
- Queuing — 1
- Executing — 2
Although the rewards may seem low initially, if the FRT Market increases on demand, the elasticity will also increase the rewards. ALSO **The rate can be managed using the Governor, and by creating Proposals users are able to modify it in order to suit the Community**
Although still in preparation and with no launch date fixed, it is important to talk about our aims for Phase 3.
In this phase, users will be able to combine a certain amount of PHZT, FRT with a small amount of ETH in order to create a Unique NFT. More Details here.
The funds that the NFT Generator requires for the distribution of NFTs will be stored on a Special Smart Contract that can only be managed by the Governor. The Community can then decide where to donate this Funds by the means of Proposals. Execution of the transactions will be completely managed by the BlockChain and will require a certain amount of Quorum for the proposals to be valid.
Phase 3 will shift TLT Finance from Yield Farming, to a fund raising platform using DeFi tools.