Avocado Toast —All the Toast Ecosystem, All in one Token
Details of the first Stack release
This week is lining up to be another big week as we are releasing Avocado Toast (avoTOAST). This Stack is the first of many. The Avocado Toast Stack is a capitalization-weighted bundle of tokens that tracks the projects across the Toast ecosystem.
Learn more about how Stacks work here: https://medium.com/toastfi/how-it-works-stacks
Here are the underlying tokens and weightings:
TOAST (Rewards) 25%
SPACETOAST (Deflation) 20%
ALTRU (ILO Partner) 20%
XCARBON (ILO Partner) 20%
HFI (Eco Partner) 10%
TOASTz (Governance) 5%
How Stacks Work
- User Wallet deposits 1 BNB to mint avoTOAST tokens
- The Stacks smart contract checks the price in real-time (on-chain) of each of the tokens in the Stack and determines how much of the deposited amount will be used to buy the underlying tokens.
TOAST (0.25 BNB of TOAST is purchased)
SPACETOAST (0.2 BNB of SPACETOAST is purchased)
ALTRU (0.2 BNB of ALTRU is purchased)
XCARBON (0.2 BNB of XCARBON is purchased)
TOASTz (0.5 BNB of TOASTz is purchased)
HFI (0.10 BNB of HFI purchased)
- The newly purchased tokens are all deposited into the Stacks’ Vault smart contract. (The Stack Vault can ONLY be liquidated through the process of burning. There are no provisions, not even for devs to liquidate the underlying assets. This was done as a security precaution.) Today, these underlying tokens are purchased from PancakeSwap.
- The Stacks smart contract then mints avoTOAST based on the deposited amount and market value of the underlying tokens.
- The newly minted avoTOAST is sent to the User Wallet.
- As the value of the underlying tokens changes, so does the price of the avoTOAST.
- The User Wallet can send or swap their avoTOAST at any time. The underlying tokens will remain locked in the Vault smart contract.
- In the event of the User Wallet or any Wallet holding avoTOAST wanting to burn the tokens to unlock the underlying tokens they can. When avoTOAST is burned, the underlying tokens corresponding to their proportionate value is sent to the wallet burning avoTOAST.
We are launching the minting function for this Stack Wed September 29th (No precise time yet. Follow twitter for update. Cycle time to spin up initial contracts on new Stack isn’t predictable)
How Avocado Toast and other Stacks will improve the Toast ecosystem
Composite tokens and indexes have always been exciting to the crypto community as their performance in TradFi outperforms hand-picked assets. Stacks — which function similarly will attract HOLDrs (and bots) creating volume which ultimately generates transaction fees. These fees feed the Toast Treasury which drives for buying and burning of the Toast native tokens (SPACETOAST, TOAST, TOASTz).
Stack Fees Explained
Now that Stacks are live it’s time to dive into how the Stacks Fees work. Stacks generate fees through 2 actions, minting and burning:
When a user mints avoTOAST tokens using BNB, there is a 1% fee. That fee is retained by the Stack itself; increasing the pool value for all users HODLing avoTOAST. The effect of this will be felt by long-term HODLers as users join and TVL grows.
When a user is ready to exit a Stack and swap it for the underlying assets, there is a 1% burn fee on the Stack. This fee is sent to the Toast Treasury. The fee is collected in the Stack token (in this case avoTOAST) which means fees are effectively earned in the underlying assets.
The redistribution of fees will be used to buy back and burn weekly.
Other ways to profit from Avocado Toast and other Stacks
Most people will trade Stacks directly on a DEX (pancakeswap/pcs) simply to own all of the underlying assets in one simple transaction.
People looking for opportunities to stack profits can mint Stacks to trade arbitrage. Trading arbitrage is why users should mint stacks.
How Trading Arbitrage Works (Example):
- Let’s say the price of avoTOAST is $101 on PCS (based on AMM and LP)
- Separately, The oracle price (market value based on the sum of underlying tokens) of avoTOAST is $96
- An arbitrager (trader) would see this opportunity, mint new avoTOAST and sell the avoTOAST on Pancakeswap for a profit.
- The arbitrager is rewarding in the spread made (in this example ~$5 on every avoTOAST sold with respect to LP ratio and price impact)
- The selling of the newly minted avoTOAST on Pancakeswap would bring the price of avoTOAST on Pancakeswap back to (or closer to) market value.
This isn’t limited to Pancakeswap. Arbitragers can profit from minting across any DEX. The network effect in minting increases the Stacks TVL (thus contributing to the purchasing and HODLing of it’s underlying tokens.)
Growing Avocado Toast
Later in the week, we will announce partnerships to drive growth into the Avocado Toast Stack. We’re qualifying partnerships based on their ability to add 1k+ wallets. We are most excited by a partner enabling users to buy avoTOAST with a credit card! We’ll also introduce pools to create additional earning opportunities.
Avocado Toast is the first of many Stacks we have on the horizon to release. We plan to continue to announce new Stacks often. Large cap, Major Chains, DeFi, Stablecoins, Wallets, Metaverse and more!
We look forward to the day when the community can issue their own Stacks.
We are still in the initial phase of the project and are very excited for what is ahead.
Don’t forget, we’re saying bye to Telegram and Hello to discord. Learn more from our recent security update here: https://medium.com/toastfi/security-update-farms-v1-community-telegram-why-audits-are-bad-5ca787932ab5
We don’t fold, we HODL! 💛
Remember, we will NEVER send private messages.
We don’t believe in DMs and will never send you a DM first.
We do not have technical support team.
We don’t fold, we HODL!!