Initial Network State
Our initial goal is not to find a stable price. This may seem antithetical to our currency aspirations, but we ensure you it is not. Neverland can be tuned to optimize for different things. The main tradeoff is volatility and profitability versus stability and consistency. With volatility and profit comes growth; this is what we want early on.
With tight policy and scale, Neverland should function well as a stable asset. Upward and downward pressures should stabilize at some non-intrinsic value. With loose policy, regardless of scale, Neverland has the potential to act as a wealth creation machine. The market premium of the token measures the positive sum of the game; all extrinsic value is new wealth created.
The initial network features a one-way treasury (money goes in, none comes out), the minting contract (through which supply increases and profits are produced), and the staking contract (where profits are distributed).
The following are the initial policy states:
- BCV varies based on bond types. It is tuned regularly by the Policy team to meet the protocol goals. For example, if the protocol wants to accumulate more liquidity into its treasury, it can lower the BCV for liquidity mints to increase their mint capacity.
- It is set to five days for all mint types.
- Every time someone purchases a bond, the proceed will go to the Neverland treasury. A corresponding amount of HOOK will be minted and distributed to three parties:
- The minter will receive the quoted amount of HOOK linearly over the vesting term.
- The protocol receives the same amount of HOOK as the minter. This represents the protocol profit.
- After accounting for the HOOK distributed to the minter and the protocol, the rest will be distributed among all stakers in the protocol.