Tokenomics

What are the native tokens of United DAO?

There are multiple native tokens of the United DAO platform. Namely, UTD, sUTD, aUTD and mUTD. Unlike the previous tokens of DeFi 2.0 and its forks, our tokens were created with value provision in mind, as well as deflationary mechanics to increase the value of our native tokens. We believe that our protocol is the next evolution of DeFi and will seek to consistently evolve and improve our tokenomics to achieve those aims.

United Dao Tokenomics

What is UTD?

UTD is the currency token of the platform, and will be the main medium of exchange, especially because all protocol owned liquidity pools would be in UTD. Each UTD token will have a protocol buyback value of 1 USDC, to give each UTD token an intrinsic value, so that the overall ‘risk-free’ value of a user’s holdings will increase with time. We believe however, that each UTD token will trade at a higher price, due to the ‘book value’ of each UTD token. This is because each UTD token is backed by the United DAO’s treasury reserve and can be visualized as a fraction of that reserve. We believe that this ‘book value’ will be the price floor of each UTD token. However, we believe that the UTD token can be priced at a higher premium by the market, and this would be the extrinsic value of each UTD token, which is a price multiple paid by the market in exchange for high staking yields or the value paid by the market in return for other utilities from holding the aUTD token. Unlike earlier generations of DeFi protocols, we aim to provide underlying value to justify these multiples in order to sustain the market price of UTD, creating a positive feedback loop for treasury growth. We also have adopted the business model of successful offchain companies, such as Amazon, and developed our United Allies Program. This would incentivize token holders to grow our United DAO community and reach its goal in becoming the world’s next generation decentralized protocol. What is sUTD?

The sUTD token is our rebasing token, and it is the main value accrual strategy of United DAO. United Allies can stake their UTD into sUTD to earn rebase rewards. The rebase rewards come from the proceeds of bond sales and can vary based on the number of UTD staked in the protocol and the reward rate set by the monetary policy. By staking, users can gain steady long term passive income. Users can be profitable even if the price of UTD drops below its initial purchase price, as the value of the increase in UTD staked balance can outweigh the fall in token price. As such, we believe that our Allies would be vested in growing our bond sales as this would increase their staking rewards and bring our treasury towards the income generation or capital expansion phase, to further increase the book value of their tokens. What is aUTD? (Wrapped)

aUTD is the wrapped version of UTD and is a self-rebasing token. It is also the utility token of our protocol and will be the future governance token of the protocol. What this means is that each aUTD can be unwrapped into a number of UTD tokens as determined by the Index and this value of aUTD is calculated by how many sUTDs you would have if you had staked 1 UTD token the very moment rebasing first began.

Each aUTD has an active and inactive state, where each aUTD is ‘activated’ by pledging the aUTD to the protocol. This pledging locks up that aUTD token for a time period of 90 days and is seen as your commitment to helping the protocol grow. In a game theory point of view, you benefit the protocol as you commit to reducing selling pressure on the UTD token, while still gaining rewards as your self-rebasing token grows in value. In exchange for your commitment to the protocol, the protocol rewards you in tiers according to the amount of aUTD that you have pledged, and this will allow you to have an increased amount of mUTD generated, as well as to allow you to lead our own group in the United Allies Program. As our protocol develops, we look forward into growing the Allies Program even further, to foster a sense of ownership within our community. What is mUTD (mini UTD)?

mUTD (mini UTD) is our reward token of the protocol. It is given out to Allies who pledge their aUTD, as a form of dividend in addition to their capital accumulation of UTD. mUTD is also termed as mini UTD, because each UTD can be burned to be fractionalized into a certain amount of mUTD, based on the protocol’s current exchange rate. It will be used in our very own reward shop, where we will allow committed Allies to redeem rewards, such as NFTs, pre-IDO token allocations, merchandise, and vanity perks. As our protocol grows bigger, we understand that token allocations and project whitelists within the blockchain space may not be enough for every ally, and thus we have developed an allocation system where you can use your mUTD to bid for allocations for such projects.