Liquidity as a Common Good

The ‘Reverse DAO’ runs under the vision that LaaS (Liquidity-as-a-Service) is a common good. Let’s explain what that means.

What is Liquidity and why is it important

Liquidity is thought of in terms of financial markets and measures the strength of an asset. The description is the ability of an asset to be easily and quickly converted into cash.

Example: A $4 loaf of bread that you buy at the grocery store seems a simple example … it’s worth $4. The farmer and the bread company spent a lot of effort to make that load of bread. It definitely is worth $4. But once you own it, try to sell it back to the store or your neighbor and see if you can get $4 for it 🙂 Not very liquid.

To maintain a healthy financial market, liquidity plays an important role in the stability of that asset as it keep prices stable and reduce market volatility.

Levels of liquidity

Assets have various levels of liquidity, ranging from very liquid to illiquid to everywhere in-between.

Highly liquid: Cash is the most liquid asset. The ability to convert an asset to cash and then purchase another item of equal value such as this example: You sell 1 share of TESLA stock, valued at $1000 and receive $1000 cash, then use that cash to purchase a $1000 refrigerator.

Illiquid (not liquid): Collectables (coins, stamps, art) are examples of assets that are not very liquid. Owners of these items may not get the true value for their items unless they shop around long enough, find the right buyer or sell at a discount.

Liquidity in the crypto space

Crypto may seem like it’s own unique finance system, but still follows basic supply & demand behavior.

You buy a token at market value (or possibly an OTC discount for early, seed rounds) and hopefully sell it at the same market value as token value grows. Large market-cap tokens (Bitcoin, Ethereum, etc) have plenty of liquidity to execute your transactions with little risk.

That may not be the same for smaller tokens which face many financial risks such as low liquidity, untrust-worthy centralized exchanges, volatile pricing.

There are many exciting projects, especially in the ReFi (regenerative finance) space, that are worthy of your support via buying & holding their token. Most of these eco/crypto projects are small and in the initial phases of growing their business. Small-cap, ReFi tokens, need space to grow. Most are busy building products, services or community and support in the financial aspects of the market is tremendously helpful.

Greater liquidity helps with some of the risks of being a small-cap token or initial low demand.

Liquidity as a Common Good

The ‘Reverse DAO’ is focused on the entire ReFi space with ‘liquidity as a common good’.

As a community-run DAO, the community members brings various ReFi projects to the broader community for review. When the community votes, we create liquidity pooling the projects token with the $RVRS utility token. This ‘common good’ liquidity benefits the entire space, keeping markets stable allowing all participants to trade at stable prices and gives the project space to grow.

As the above flow-chart displays, transacting on the $RVRS utility token initiates a 4% sustainability tax. 3% goes to the treasury where the community decides how it is re-invested in the ReFi space, specifically using the ‘liquidity as a common good’ model. 1% goes to token burns that supports price appreciation through token scarcity.

Your involvement in this ReFi investment club is needed and shows your support for the entire ReFi space. Currently, our investment club has voted to create ‘RPPs (Reverse Partnership Pools)’ in Klima, MOSS, Toucan, Carb0n-Fi & Polygon.

Welcome to the Reverse DAO!

About Reverse DAO

Investing in the ReFi environment allows you to do well while you are doing good.

Buy, use or sell the $RVRS token, and you’re helping to invest in ReFi/web3 projects that bring returns to the community.

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If you have any questions about the club or the $RVRS utility token, reach out on Discord or by email to help@ReverseClimateChange.com