FAQ - Treasury

What is the most significant advantage of the Treasury mechanism?

The Treasury serves as a robust reserve asset, establishing a fundamental "book value" for tokens irrespective of market speculation.

Should market sentiment falter, token holders retain the ability to withdraw value from the treasury in alignment with their ownership stake.

Consequently, the speculative value of the token is expected to persistently align with or exceed the value held within the treasury.

What are the methods through which digital assets are deposited into the Treasury?

Digital assets are directed to a token's treasury via two primary avenues.

Firstly, the token creator can initiate transfers from either the token's bank or their personal wallet.

Secondly, during transactions with the token's liquidity pool, a 0.5% exchange fee is automatically directed to the token's treasury.

Once assets are transferred into the treasury, only token holders possess the ability to redeem them.

In what way does the Treasury facilitate the unveiling of a token's inherent worth?

The Treasury plays a crucial role in elucidating a token's intrinsic value by offering a mechanism to establish its baseline price.

Traditionally, financial assets are appraised based on the evaluation of future income streams (such as dividends for stocks or interest for bonds), discounted to present value.

With the Treasury, we gain a tool to set the minimum price of a token and validate its value with deflationary digital assets like Bitcoin.

This process is encapsulated in a formula:

Token Valuation = Net Present Value (NPV) of the Treasury.

What is the method for determining the floor price of a token?

The floor price of a token is calculated by dividing the total amount in the treasury by the token's maximum total supply.

How are the funds raised maintained as underlying assets within the treasury?

The funds raised are preserved in the same assets initially transferred to the treasury.

Essentially, if all funds are collected in Bitcoin (BTC), the intention is to refrain from trading these funds, thereby safeguarding token holders from potential risks.

Who bears responsibility for maintaining this process?

The responsibility lies jointly with the token holders and the core team to ensure the protocol's openness and transparency.

Governance is enforced through code.

How can individuals access visibility into the treasury?

Visibility into the treasury is accessible to all via the token page of any token within the Unit Network, including UNIT.

What measures are in place to safeguard the treasury against unauthorized withdrawals?

The treasury is safeguarded by design, as it is technically impossible to withdraw more than the proportional share of a token holder from the treasury.

No single user has direct access to the treasury; rather, funds can only be accessed by token holders in exchange for their tokens.