Introduction

For a DAO to achieve complete decentralization, its fundraising mechanism must align with this principle. Therefore, Reform has implemented a Bonding Treasury as its fundraising method. Initially, this treasury contained 400 million $RFRM tokens, constituting 40% of the total token supply. From this 40%, half (20%) will be used for the presale, while the remaining half (20%) will be available for public distribution at the TGE.

This Bonding Treasury is the heart of Reform’s value flow. Let’s dive into the complete process in this chapter.

The Bonding Treasury

Before going in-depth into Reform’s money stream, it is first important to cover the mechanism of the Bonding Treasury.

The Bonding Treasury allows the DAO to decentralize fundraising and generates liquidity for Reform. Investors can acquire discounted RFRM tokens by swapping against the Bonding Treasury and locking them in the Staking Contract for a predetermined period.

The Bonding Treasury mechanism holds lots of advantages. It excels in becoming a “storage” for generating liquidity. The structure that it made also allows dedicated buyers to purchase it at a discounted price.

In the future, the gathered liquidity will be strategically used to acquire tokens and execute high-frequency trading & liquidity provisions that consistently generate realized profits.

The Bonding Treasury is locked for certain periods and consists of varied discount market prices:

• 1-year locking period: 5% discount on the market price

• 2-year locking period: 10% discount on the market price

• 3-year locking period: 17.5% discount on the market price

• 4-year locking period: 27.5% discount on the market price

• 5-year locking period: 40% discount on the market price

Exchanging $USDC, $USDT, or $ETH for $RFRM via the Bonding Contract is straightforward, and will be available once the TGE is live. Bonds can be bought at a reduced price, with the discount rate determined by your chosen lock-in period.

Breaking down the stream

The Bonding Treasury provides liquidity for the DAO to perform high-frequency trading and liquidity-providing engine. Here is a summarized breakdown:

• People can buy bonds via the trading treasury through ETH/USDT/USDC

• These tokens are locked between 1-5 years

• Buying these locked tokens makes you eligible for the voting process and staking

• Tokens can be bought for market price through the bonding treasury

• This provides liquidity which is transferred to the engine to perform high-frequency trading and liquidity-provision trading

The Engine

The liquidity that has been raised via the bonding treasury flows directly into our engine, where ETH, USDC, and USDT are diversified across multiple trading pairs. This strategic allocation allows us to capitalize on market volatility and movements through our market making activities on various exchanges. Such efforts not only produce benefits like substantial rebates due to high trading volume but also enable us to leverage our position on these platforms effectively. The engine performs high-frequency trading and liquidity-providing mechanisms.

High-frequency trading executes a large number of orders at extremely fast speeds, aiming to profit from tiny price differences that exist momentarily. Profits are earned through the bid-ask spread using price differences across various exchanges. This trading method relies on high-speed data feeds and advanced quantitative analysis to make rapid trading decisions.

To strengthen this algorithm, we also added the “liquidity provision” mechanism. This involves supplying plenty of buy and sell orders, ensuring that transactions can occur without significant price impact. The liquidity provision reduces the spreads and increases market depth, which enhances the overall market efficiency, allowing traders to execute orders quickly and at predictable prices.

All the realized profits that are generated from the engine will be invested back into the DAO. This will be elaborated on in the following section.

Realized Profits

The engine's operations generate realized profits averaging 20%-30%, of which 65% is reinvested in purchasing RFRM tokens that are then added back to the bonding treasury for enhanced liquidity accumulation. In essence, the money is NEVER taken out from the DAO treasury. This circular ecosystem approach is driven by our commitment to ensuring sustainable liquidity in the ecosystem.

This strategy is founded to create an ecosystem that sustains growth and an ever-increasing liquidity pool. This ensures Reform’s liquidity not only remains robust but continues to expand over time.

A sustainable ecosystem

The Bonding Treasury mechanism plays a pivotal role in the liquidity generation of Reform. It not only decentralizes fundraising but also provides liquidity and discounted RFRM tokens to the buyers. Using our extensive algorithms, the profits generated are strategically reinvested in buying back RFRM tokens, strengthening the liquidity pool, and ensuring sustainable growth. This approach illustrates Reform's commitment to creating a robust and ever-expanding ecosystem for all DAO participants.