Unlocking Long-Term Value: Introducing an Update to $FRMD Tokenomics

At FRĀMD, our primary objective is to innovate and consistently deliver long-term value for our community. As part of our commitment to progress and growth, we are excited to announce a major update to the $FRMD tokenomics model. This update is specifically designed to reinforce the value of the $FRMD token and foster long-term sustainability for our platform.

Shortly after the release of Yeti 2.0, which is expected to happen towards the end of May, we will implement a strategic shift in our approach to utilizing node rewards and secondary sales (SS) royalties for the enhancement of our protocol-owned liquidity (POL). Presently, half of the POL’s share of node rewards and SS royalties are used to purchase $FRMD and deposit it back into the liquidity pool (LP). Furthermore, the current utility of $FRMD is limited to staking.

Introducing Buy-Back and Lock (BBL) — A First Step Towards Buy-Back and Make (BBM)

To optimize our tokenomics, we will allocate 50% of the node rewards and 25% of the secondary sales royalties toward buying back the $FRMD token from the market. In addition, the FRĀMD team will designate a small percentage of revenue for quarterly buy-backs. These tokens will be secured in the newly established FRĀMD Vault, similar to a company buying back its own stock. The Vault will be a smart contract and fully transparent.

The BBM model is a familiar tokenomics model that involves using a portion of the project’s profits or fees to buy back its native tokens from the open market and redistribute them to create a sustainable token economy.

Why not burn the tokens?

While burning tokens might seem appealing, we believe that, for a project like FRĀMD with a relatively low supply of $FRMD tokens, burning is not conducive to a healthy long-term strategy, at least not at this stage. Burning primarily achieves two things: Reduces the supply and achieves short-term price gains. Given that $FRMD was never intended to be deflationary in the traditional sense, the team believes that the BBL approach has multiple advantages.

$FRMD 2.0 vs. Current Model

The FRĀMD Vault: Advantages of the BBL Strategy Over Burning

The buy-back and lock strategy with the FRĀMD Vault offers several distinct benefits compared to burning tokens:

1. Increased Earning Potential: While tokens are locked, they cannot be staked and, as a result, do not participate in ecosystem rewards. This increases the earning potential per token for the remaining tokens in circulation that could be purchased and staked.
2. Strategic Resource: The FRĀMD Vault allows for the locked tokens to be reused strategically and to serve as a valuable resource by reallocating tokens more efficiently to support various initiatives such as ecosystem development, growth, and governance.
3. Demonstrated Confidence: Buy-backs signal confidence in the project’s future and the long-term value of the token. Moreover, repurposing portions of the POS rewards, SS royalties, and revenue for daily and quarterly buy-backs emphasizes the team’s dedication to FRĀMD’s long-term success. The $FRMD staking levels are among the highest in the ecosystem, and we believe that the new changes will further increase the community’s confidence.
4. Enhanced Value Preservation: It is the buy-back rather than the burn that provides immediate value to the market, increasing the token’s price in the short term, and locking the tokens preserves that value in the ecosystem which increases the overall valuation of FRĀMD. Conversely, burning the tokens would eliminate that value.
   For example, assume that after burning a certain number of $FRMD tokens, the token price would then return to pre-buy back and burn levels. In such a scenario, the total market cap of $FRMD would be lower than if the tokens were locked.
5. Increased Market Stability: Buy-backs help maintain market stability by counterbalancing the effects of token selling pressure.

Future Use of Locked Tokens (BBM)

The locked tokens in the FRĀMD Vault can be reintroduced into circulation in various ways to support the growth and development of the FRĀMD ecosystem:

1. Exchange Listings: The locked tokens can be used as liquidity for new exchange listings, increasing the token’s accessibility and visibility.
2. Supplementing POL: The locked tokens can be used to increase POL when appropriate or necessary, further strengthening the platform.
3. Incentive Programs: The tokens can be utilized to create incentives for developers, stakers, voters, and other participants, fostering engagement and loyalty.
4. Expansion Initiatives: The tokens can be allocated for strategic partnerships, acquisitions, or other growth opportunities, promoting collaboration and long-term success.
5. Reducing Inflation: The BBM mechanism of reusing the bought back tokens will ultimately serve to reduce the overall inflation in the ecosystem.

Using $FRMD in Thaenia and NFT Upgrades

Considering the benefits listed above, we are excited to announce that $FRMD spent on upgrading NFTs or potentially in Thaenia, our upcoming Play-to-Earn Trading Card Game, will not be burned. Instead, these tokens will be locked in the FRĀMD Vault, further contributing to the long-term value of the ecosystem.

$FRMD Collected from Tax

Every $FRMD trade on Balanced is subject to a tax (8% sell tax and 2% buy tax). All $FRMD collected from this tax will be redirected to the FRĀMD Vault, strengthening the tokenomics even further.

$FRMD Utility

This update will also expand $FRMD’s utility to go beyond staking.

1. Upgrading NFTs: In the very near future, $FRMD community members will be able to upgrade NFTs. Upgrading NFTs unlocks additional benefits from the NFTs, but that is for another article to explore.
2. Voting and Governance: FRĀMD is not a DAO; however, we have always valued the community’s voice and opinion and supported community led decisions and initiatives. It recently became clear that the ICON community would like to be more involved in the CPS voting process. Soon, $FRMD stakers will able to vote on the CPS proposals, and the community’s opinions will carry a weight and influence FRĀMD’s vote as a main validator on the ICON Network.

Conclusion

In summary, the update to our $FRMD tokenomics model, featuring the buy-back and lock strategy as we prepare to reuse the locked tokens along with $FRMD’s expanded utility, is a well-considered and strategic move that prioritizes long-term value, sustainability, and growth. We are confident that this approach will benefit our community and the broader ecosystem.

We understand that some may argue in favor of burning tokens for short-term price boosts. However, we firmly believe that our buy-back and lock approach, centered around the FRĀMD Vault, is a superior long-term strategy that preserves and enhances value while also allowing for flexibility and control over the project’s growth and trajectory.

Thank you for your continued support as we innovate and evolve the FRĀMD platform. Together, we look forward to unlocking the true potential of the $FRMD token and creating a thriving web3 ecosystem.