Virtualcarbon Treasury
Phases of the Virtualcarbon Treasury
To facilitate a healthy market for Virtualcarbon, the treasury is funded by a 3% transaction fee to buyers and sellers of both NFTs and Virtualcarbon. Following the Land NFT sale, the treasury will be funded with over $200,000 in USDC.
As there will be no premining of Virtualcarbon, a constant product automated market maker is not possible on launch. The Virtualcarbon treasury will have two distinct phases:
Phase 1 - Willing Buyer and Seller at a fixed price
At launch, the Virtualcarbon treasury will offer to purchase any amount of Virtualcarbon at a price of $0.01 and sell any amount of Virtualcarbon available in the treasury at a premium.
Once the treasury has accumulated a sufficient quantity of Virtualcarbon to facilitate a stable Virtualcarbon price for Virtualcarbon, the treasury will graduate to Phase 2.
Phase 2 - Constant Product Automated Market Maker
The Virtualcarbon treasury in this phase will be an automated market maker where users can buy and sell Virtualcarbon at the price dictated by the market. Transaction fees on the purchase and sale of NFTs and Virtualcarbon will continue to fund the treasury pool, pushing the valuation of Virtualcarbon up slowly over time and creating a more stable price for buyers and sellers.
Additional projects increase the value of Virtualcarbon
Due to the front-loaded nature of initial payments and the delayed issuance of Virtualcarbon, individual projects may spend some amount of time in an unfunded state, meaning the # of carbon credits issued * the floor price is greater than the funding by that project to the treasury. See Figure 1 for an example of this. We expect with very conservative trading volume estimates, each project will yield a positive net impact to the treasury over its lifetime. This means that every project launched in the Carbonhive metaverse should improve the price of Virtualcarbon above the floor price. It should also be noted that longer-duration projects are more likely to be fully funded at all times during the project's lifetime. See Figure 2 for an example of a longer-duration project. Overall, there is only one Virtualcarbon treasury. On a blended basis, the treasury will be fully funded at all times.
Figure 1 - Virtualcarbon Treasury Funding Status of a shorter duration project
Figure 2 - Virtualcarbon Treasury Funding Status of a longer duration project
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