FantOHM DAO’s Treasury, Operations & Financial Management — in plain English
FantOHM DAO’s Treasury, Operations & Financial Management — in plain English
If you’re on the fence about FantOHM and OHM forks in general, you’ve come to the right place. No shills, no empty promises, no bullshit. Just some straight up, easy-to-digest information on how FantOHM DAO operates and why this is an OHM fork you want on your radar.
This article gives an overview of FantOHM’s innovative treasury management, operations & financial model, in plain English. Let’s dive in.
How to choose the right OHM fork
Before we get into the nitty gritty, let’s take a moment to step back and examine the DAO landscape as it currently stands. Needless to say, OHM forks are everywhere — but if you haven’t noticed, very few are worth your time. When it comes to picking a winner, understanding the project’s internal mechanics, financial model and how they intend to innovate and expand upon OlympusDAO’s model is key.
For an OHM fork to achieve long-term success, a whole constellation of things have to align. It’s far too easy to make exact copies of OlympusDAO’s model, docs and then make lofty promises of being the next big thing.
A good rule of thumb for determining whether or not you have a legit project on your hands is if:
- They have created a unique way to achieve the goal of a decentralised reserve currency asset not seen before
- They have a loyal and engaged community with members getting down to the nuts and bolts of governance and future development in the Discord
- They have clearly outlined the way their treasury will be managed and how their operations and financial management model works
Unfortunately, most OHM forks don’t tick these boxes, which should be a red flag.
In this article and the next (set to be released by the end of the week), we will take great pleasure in proving to you why we are a truly unique OHM fork that is here to stay.
If you’re new to FantOHM, here’s a quick breakdown of a few things that uniquely position us to succeed amidst the sea of OHM forks:
- An extremely dedicated, world-renowned team of developers, strategists & crypto veterans
- An innovative, cross-chain approach that seamlessly connects & harnesses the untapped potential of the Fantom and Moonriver network while building on the success of OlympusDAO
- An unwavering commitment to community, transparency & educating the public every step of the way
- A clear vision of FHM’s utility as a sanctuary to park funds during waiting periods that can also generate passive income for holders
- A first-of-its-kind revenue generation strategy that will make us a truly unique OHM fork (to be announced later this week… stay tuned)
Education First
Most OHM forks make lofty promises but hardly any actually walk the walk. At FantOHM we are taking an alternative approach to the usual shill first, plan later strategy that is far too common in the world of OHM forks. Not only have we established ourselves as a first-of-its-kind project in the space, as one of the only cross chain protocols, but in the next week we’ll be releasing some game-changing information that we hope all FantOHMies and potential investors will read and understand.
We want our community to understand and believe in what we’re doing. A successful DAO is much more than just good marketing and the right timing — it’s an unprecedented experiment in human coordination. And it begins with getting everyone on the same page so we can innovate together and build something that lasts.
For the moment we shall focus on the management of FantOHM DAO’s operating account and treasury, both of which are crucial to achieving our goal of being a cross chain decentralised reserve asset that is both sustainable and optimised for wealth creation.
In simpler terms, we want FHM to be a safe place to store assets during times of volatility that can also generate income in the form of compound interest for all holders.
A brief overview of FantOHM’s treasury and operating account
Treasury
The treasury is the backbone of a DAO, and it’s management cannot be overlooked. The primary function of FantOHM DAO’s treasury & protocol owned liquidity model is to provide a safe place to park returns during waiting periods that also allows holders of FHM to earn a passive income through compound interest.
Holders can weather out times of market uncertainty and enjoy the safety and stability of a true decentralised reserve asset in FHM while generating a passive income. This is achieved through FantOHM’s bespoke treasury structures.
Correct treasury management cannot be understated. It is the most important factor in determining market price and generating income for holders. Thus, asset allocation and treasury strategies need to be considered carefully and executed with transparency and precision.
Operating Account
The operating account is another key component of this beautiful machine called FantOHM DAO. It handles expenses such as marketing, transaction fees, team compensation, audit reports, or any other expenses associated with the running and management of the DAO.
Currently, FantOHM DAO’s main income generation comes through the purchase of FHM bonds. In the initial phases the direct form of income for the operating account will come from bonding as well. This income is represented by FHM tokens minted through the bonding process, with the operating account receiving just as many tokens as bond purchasers as the time of bond purchasing.
At a later stage the operating account will be married to the treasury in an unprecedented way. It will allocate these funds for different liquidity pools, direct asset purchases, market making, lending structures and investments, as well as developing an efficient, decentralized line of financial instruments. More on this soon.
Early stage DAO governance
While community is and will always be at the heart of FantOHM DAO, in the beginning the allocations of the operating account along with a handful of other tasks will be carried out by the core team and not the community for several reasons.
While DAOs truly are a revolutionary experiment in human coordination and what’s possible when a community has a shared vision — something FantOHM exemplifies in its Discord — there is inevitably a need for a core team who can make decisions that are not suited to put to a community vote. This is in the best interest of the DAO, especially at the outset when there are many moving parts.
Initially capital allocation requires meticulous planning and a whole host of considerations. Having too many opinions and processes to sort out and tally can slow down a time sensitive and already complex process. Certain decisions need to be made in a timely manner by a small group of people who are best placed to make them. However, in the future we will inevitably shift to a more decentralised, community-focused model, but at this crucial early stage it is in the project’s best interest to keep some decisions in-house.
Operating Account Composition
As shown in the image above, the operating account will consist of three main categories regarding liquidity composition. These categories are as follows:
● FHM
These tokens will be the result of bonding action from investors and is stipulated as the profit generated from bonding. These tokens will be used to compensate the team, generate liquidity pools and be switched to manage balance in the treasury or assigned to assist with bridging.
● Stables
The business account will always attempt to hold 33% of its value in stables. These stables will be used to pay for expenses that require payment to be done in other formats than FHM, such as marketing, website, etc. Their roles within the operating account will also be to top up the Treasury Account with stables or be used to acquire other assets to be placed into the Treasury for price stability and Treasury growth.
● Other
As the operating account is used for other income generating activities, some of the profits may be paid in other coins or tokens. These will therefore enter the operating account and be converted to the required assets and be placed accordingly. These converted assets other than FHM or Stables will then be placed into the Treasury. At times the operating account will hold assets from this category in order to set up liquidity pools or assist in income generating, market making activities.
Treasury Composition
FantOHM’s treasury consists of four main categories.
This information applies to each network’s FHM protocol individually, although all branches of FHM are built to work in concert.
● OHM Forks
These assets will be other OHM forks or yield generating tokens found across a number of different networks. For example, wMemo from the project TIME Wonderland. More specific tokens will be included as they get voted into acceptance through DAO governance. The objective is to enable network exposure, and lend support to other forks as we become a symbiotic neighbor to the surrounding DAO space.
● Network Coins
Supporting the wider crypto market’s growth and future sustainability increases the probability of future mass adoption and stability within and beyond the FHM protocols. This, in turn, will result in profitability and stability for the treasury. While the market is still gaining momentum through various network booms, it is still very volatile, so FantOHM DAO’s exposure will be limited in the near term. The first focus will be to include each specific treasury’s native network coin, rather than pursuing bridged, wrapped assets.
● LP Tokens
Providing liquidity rewards the user with LP tokens that represent a share of all trading fees for the liquidity pair created. Acquiring LP tokens through bonds not only generates revenue for the treasury, but also offers further stability to the crypto trading market by reducing slippage and therefore optimizing exchange rates for trading pairs represented in FantOHM DAO’s Treasury holdings. This functionality also provides a layer 2 solution for protecting acquired LPs from manipulation in the long term.
● Stables
Stablecoins and tokens will be used to generate price stability for the treasury. As the operating account generates income, a significant portion of the income will be converted into stable coins and placed into the Treasury. Investors will also be able to deposit stables and other assets into the Treasury via the bonding mechanism and receive FHM tokens in return.
Operating Account Management
Now let’s dive into how the operating account is managed. This is where we will see how FantOHM generates income and how it is used to handle the protocol’s operations.
The primary income generating operations:
• Bonding:
Income is received from the bonding activity of investors. This takes place every time an investor creates a bond. When the investor receives their portion of FHM from bonds, an equal amount is also sent to the operating account. This currently acts the primary source of income for the DAO. (14–12–2021)
• Investments:
The operating account will use a portion of the FHM received from bonds to purchase other income generating assets, perform promising, non-vanilla investment strategies, participate in mergers and acquisitions and/or have seed capital made available for other possible income generating operations.
Initially, these operations will be managed by the team as they are complex in nature and will require fine tuning to fully decentralize, though this is undoubtedly the goal in the long term. Due to the risk associated with these non-vanilla investment strategies, allocation to this segment of spending will be fairly small, and there will also be some exciting changes coming within the week so stay tuned — what we’re unveiling is unprecedented in the DAO space and not something you want to miss.
• Loans:
Portions of the FHM received by the operating account will be used to set up loans in the future. These will facilitate the known (9,9) concept, flash loans, and/or collateral type structures.
These will first be discussed in detail with the community and, if needed, the percentage of the fund allocated to this can be altered if voted in. Down the line this will include facilitating launchpads through liquidity and margin service provisions as well.
Initially there will be set asset allocation percentages dictating investments and loan divisions. It should be noted that as these generate income, they may exceed their allocation percentages. This additional income will be directed to the treasury and be managed according to the treasury management structure, which we will outline in the final section of this document.
• Running Expenses:
This is mainly human capital. The team has been running on their own expense for the initial phase, giving FantOHM the best possible shot at success. Our team are 100% committed and are heavily invested in the project with their time and money. Additionally, these prudent movements have allowed for a liquidity reserve to build-up for a structure to be put in place which will allow for efficient team expansion.
There are also outsourcing costs for other necessities, such as collateral generation for use in marketing. The allocation for such expenses will vary and shift in importance based on the material needs of the DAO and the evolving landscape.
NOTE: Expenses will receive a percentage allocation from the total income but as these are fixed expenses the amount allocated for these might periodically be more than required. In this case the additional income will be placed aside for when the opposite might occur, and this reserve can act as a buffer. This buffering pool may be used to increase team member payments to match their utility to the DAO’s continued success, but only under direct supervision of the acting CEO once 6 months of comfortably budgeted emergency development funds are represented in this buffer.
Community Rewards
At the heart of FantOHM is a forward-thinking and dedicated community. Our community is what gives us the edge over so many other OHM forks, and we plan to take full advantage of the creative potential among us. As you will see from our Discord the right kind of conversations and contributions are taking place, and contributors will be rewarded.
Tasks that will be rewarded include community management on Discord and Telegram, as well as a bounty structure in development to appeal to the more technical or artistic members of the community. Bounties are offered to meet the needs of the DAO, and payment will scale to the difficulty of the task.
Bounty fulfillment is integral in helping the operating team reach its goals and will allow the CTO, CEO, or CMO to evaluate community talent in a constructive way before adding additional permanent DAO staff. A specific structure will be outlined and presented to the community in how they can have the possibility to participate in the bounty procedure.
LPs, token bridging and market making
Another portion of the funds will be kept in FHM to perform the necessary generation of liquidity pools, allocation for bridging tokens or operations mostly related to market making of the token.
Emergency Allocation
Finally, the DAO operating account will hold an emergency allocation. This allocation will be in stables. This will be to perform any needed actions for price or treasury stability.
The table below gives an overview for each of the above mentioned allocations on a percentage basis:
Initial bonding income is to be utilized/held as follows:
Treasury Management
How the treasury is managed often defines whether a DAO is successful. Luckily, we have a team of crypto veterans who are up to the task. Unlike most of the other forks FantOHM will have a unique treasury management going forward. Once funds have entered the Treasury they will not be allowed to be withdrawn.
The Treasury is designed to give an intrinsic value to the price of FHM, with stability as the no. 1 priority so investors can accurately assess the asset price. If there are unfavourable market conditions and the price of FHM falls below its backing price the treasury will step in as a last resort to perform the necessary actions for the price to remain equal to its backing.
It should be noted that the price can fall below its backing, but once the unusual selling pressure has subsided the treasury will perform the necessary required steps to stabilize price action. This method is done to prevent sellers from draining the Treasury with continuous sell pressure and allows for the market to stabilise itself.
For ease of reference the treasury allocation table is posted in duplicate below.
FantOHM’s treasury allocation and management is crucial in establishing FHM as a reputable protocol that is a sanctuary during times of volatility that also produces yields in market uncertainty.
As alluded to in the start of this document the most appealing aspect of FHM is as a vehicle to deposit funds and receive compounding returns during a bear market or merely when you’re waiting for the next promising investment opportunity to come your way.
Operating profits from the operating account will be deposited into the Treasury in the following percentage allocations to achieve this goal:
Ohm Forks — 15%
Network coins — 20%
LP Pools — 15%
Stables — 50%
It should be noted that each branch of FHM’s treasury will have a slightly different structure of the exact assets since they sit on different networks. This is particularly true in regards to the LP token and the network coin allocations.
Community Decisions
While ALL community suggestions are listened to (we have already made many changes based on community suggestions, such as our wonderful logo!), we are committed to moving towards a community-centric DAO model that unlocks the creative potential and support of FantOHMies.
There will be a steadily increasing role for the community to have a say in selecting certain types of assets in the treasury relating to LP pools, network coins and other existing OHM Forks.
This community will decide through a simple process:
The core team will have a final say and be able to veto a Yay or Nay vote if it can be proven by the team that the specific asset being requested will affect the Treasury in a negative way. For example, the team may be aware of structural issues in a token/coin that is not public knowledge, which may influence their final decision. The team have proven themselves to be wholly committed to the project and their main priority is price stability and treasury growth as they themselves are heavily invested in the project in both time and capital.
Looking forward
That sums up the general gist of our treasury and operating account, but there’s a lot more to come. In the next week we’ll be releasing a new, game-changing strategy we’ve developed that achieves our goal of having stability in our treasury while still generating income like no OHM fork has done before. Stay tuned, while it’s been a hell of a week in crypto, this is NOT something you’ll want to miss.
Thanks for coming
If you’ve made it this far, we want to say thank you. Too many investors don’t educate themselves and take the time to understand what they’re getting into — and too many DAOs are happy to shill and over-hype their projects to make a quick buck. This leads to many over eager investors getting burnt and a proliferation of projects not worth a cent of your money.
At FantOHM, we are deeply committed to achieving our vision, and we want everyone who invests to know exactly why we are uniquely positioned to do so. That’s why we’ll be releasing documentation, articles and easy-to-digest explanations of what we’re working on as it happens.
We want to go on this journey with you. We want to educate and innovate as a community and reach dizzy new heights that no OHM fork has reached before. Join our Discord and get involved with this one-of-a-kind DAO. There are BIG things coming very very soon. Watch this space.
Discord
https://discord.gg/fantohm
Telegram
https://t.me/fantohm
Website
https://fantohm.com/
