Decentralized Money Management
Detailed Description of Stability Pool 1 and Stability Pool 2
Circularity Finance’s Stability Pools offer participants a novel way to engage with the platform, either by accessing business micro-services (Stability Pool 1) or contributing to sustainability initiatives (Stability Pool 2). Giving participants the opportunity to transition to the Money Market Fund post the 3M threshold diversifies investment options, balancing passive income generation through trading with strategic asset acquisition through the Buyer of Last Resort mechanism. This comprehensive approach not only incentivizes liquidity provision but also aligns participants' investments with the platform's broader goals of financial innovation and sustainability.
Stability Pool 1
Purpose: The primary objective of Stability Pool 1 in Circularity Finance is to incentivize users with CIFI tokens. This pool is tailored towards participants who are keen on utilizing various business micro-services offered on the platform.
Rewards: For every $100 USD deposited into this pool, participants are rewarded with 1 CIFI token each month. This reward structure is designed to encourage consistent and substantial liquidity provision.
Accepted Deposits: Users are allowed to deposit in XDC or US+, offering flexibility in the types of assets that can be contributed to the pool.
Target Audience: This pool targets users interested in the business-oriented functionalities of Circularity Finance, including access to special business micro-services.
Stability Pool 2
Purpose: Stability Pool 2 focuses on rewarding participants with REFI tokens, aligning with users interested in the sustainability aspect of the platform, particularly in deploying Smart Assets.
Rewards: The reward mechanism offers 1 REFI token for each $1,000 USD deposited per month. This structure aims to attract substantial investments into the pool, supporting the platform’s sustainability initiatives.
Accepted Deposits: Similar to Stability Pool 1, deposits in XDC or US+ are accepted, ensuring consistency across the platform.
Target Audience: Geared towards users who are actively involved in or interested in the deployment of Smart Assets and the platform's sustainability goals.
Transition to Money Market Fund Post 3M Threshold
Once each Stability Pool reaches the 3 million USD threshold, participants are presented with the option to transition their deposited amounts into a Money Market Fund Investment Pool (MMF). This offers diversified investment opportunities with varying risk profiles:
Option 1 (Conservative Risk): 40% allocated to Passive Trading and 60% to Buyer Of Last Resort Investment.
Option 2 (Moderate Risk): 60% in Passive Trading and 40% in Buyer of Last Resort Investment.
Option 3 (Aggressive Risk): 80% in Passive Trading and 20% in Buyer of Last Resort Investment.
Passive Trading Strategy
Objective: The aim of the Passive Trading strategy is to generate consistent returns for participants through a Hedge Trading Bot. This bot leverages smart algorithms to identify and capitalize on arbitrage opportunities in high-liquidity markets.
Revenue Extraction: Participants have the flexibility to extract revenue at any point during their investment journey.
Platform Management Fee: Circularity Finance earns a fee for managing these trades, ensuring the efficiency and success of the trading cycles.
Recommended Participation Duration: For optimal results, participants are advised to engage in these Passive Trading Strategies for a minimum of six months.
Buyer of Last Resort Investment
Purpose: This investment option is designed to provide the protocol with sufficient capital to purchase assets that are liquidated on the platform, including digital assets (like BTC, ETH, XDC) or real-world assets that have been collateralized and left unpaid for over a year.
Operation as an ETF: Functioning akin to an ETF investment group or a DAO, this option pools capital for managing the value held within a treasury.
Beneficiary Rights: Participants contributing to the Buyer of Last Resort Protocol gain fractionalized ownership rights over the Vault, which holds the assets purchased with the collective value.
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