Let's get to know TeaDAO

What is Reserve Currency?

Dollar-pegged stablecoins have become an essential part of crypto due to their lack of volatility as compared to tokens such as Bitcoin and Ether. Users are comfortable with transacting using stablecoins knowing that they hold the same amount of purchasing power today vs. tomorrow. But this is a fallacy. The dollar is controlled by the US government and the Federal Reserve. This means a depreciation of the dollar also means a depreciation of these stablecoins.
Reserve Currency is non-pegged and free-floating, backed by a basket of assets. By focusing on supply growth rather than price appreciation, TEA - a Reserve Currency can function as a currency that is able to hold its purchasing power regardless of market volatility.
Basically, reserve currencies are designed to do:
  • Reserve assets preserve purchasing power: Over the medium- to long-term the asset grows to out-pace inflation, and becomes more stable over time
  • Reserve assets have deep liquidity: Reserve currencies are highly liquid and can be easily exchanged for other assets, products and services
  • Reserve assets are utilized as units of account: Other assets are denominated in the currency
  • Reserve assets serve as trusted backing: The currency is viewed as reliable and relatively low risk, which encourages entities to hold large quantities of it in reserve

What is TeaDAO?

TeaDAO is a Metaverse Reserve Currency protocol based on $TEA token. Upgrading OlympusDAO’s “protocol-owned-liquidity” model, TeaDAO enables GameFi 2.0 by solving the shortage of NFT liquidity.
TeaDAO will be community-owned; TEA holders will decide on TeaDAO’s future via on-chain voting. At first, TeaDAO will operate on the BSC and Ethereum chain. Over 2022, TeaDAO will expand to become multi-chain.

Why do we need TeaDAO in the first place?

As a reserve currency, TeaDAO solves many of the problems inherent to fiat currencies that are flawed by their lack of underlying value, centralization & association with the interests of governments. By focusing on supply growth rather than price appreciation, TEA can function as a currency that is able to hold its purchasing power regardless of market volatility.
Furthermore, upgrading over the traditional reserve currency protocol, TeaDAO creates more utilities for reserve currency when applying it into the GameFi context. GameFi has evolved into a thriving ecosystem of investors and thousands of daily users. However, the current GameFi economy is not prepared to meet the demand of the market when it has to deal with in-game token inflation and NFT illiquidity. TeaDAO will position itself as a financial center to facilitate the long-term development of the GameFi ecosystem through our NFT-as-Bonding-Assets mechanism, allowing GameFi projects to have a sustainable approach for incentivizing and rewarding gamers while balancing the net benefits for both current and new players.

Is this a fork of OHM?

No, TeaDAO is functionally like OHM, but completely upgraded. By utilizing 3 concepts - DeFi 2.0, Metaverse, GameFi - TeaDAO enables GameFi 2.0 by addressing the shortage of NFT liquidity, which is believed to accelerate the value-increasing process over the traditional reserve currency.

How does TeaDAO generate value?

TeaDAO's business model is inspired by a proven business model named Olympus DAO, but we developed the concept and brought it to the next stage by extending the utility of TEA - a reserve currency into GameFi context.
  • Basically, TeaDAO generates revenue through Bonds and Staking. At a high level, TeaDAO consists of its protocol-managed treasury, protocol-owned liquidity (POL), bond mechanism, and staking rewards that are designed to control supply expansion.
    Bond sales generate profit for the protocol, and the treasury uses the profit to mint TEA and distribute them to stakers. With liquidity bonds, the protocol is able to accumulate its own liquidity.
  • TeaDAO generates revenue by offering Bond-as-a-Service and DAO-as-a-Service protocols. Using the Protocol-controlled liquidity, the DeFi Protocols can control its liquidity and capture a new revenue stream through liquidity fees. In return, the DeFi protocols will pay TeaDAO a service fee.
  • TeaDAO generates revenue by offering NFTs-as-Bonding Assets for the GameFi protocols and its gamers. Using this service, the GameFi protocols are able to control its NFT's prices and liquidity, enabling GameFi projects to engage more with the current and new players.

Who controls the funds?

As the protocol controls the funds in its treasury, TEA can only be minted or burned by the protocol. This also guarantees that the protocol can always back 1 TEA with 1 USDT. You can easily define the risk of your investment because you can be confident that the protocol will indefinitely buy TEA below 1 USDT with the treasury assets until no one is left to sell. You can't trust the FED but you can trust the code.
As the protocol accumulates more liquidity, more runway is guaranteed for the stakers. This means the stakers can be confident that the current staking APY can be sustained for a longer term because more funds are available in the treasury.

What is TEA token?

TEA is the crypto-backed and primary token of the TeaDAO platform. It will be minted when users bond with their crypto assets. Then they can decide to stake the TEA tokens or sell on other platforms.
To differentiate, backed crypto means it can have a bigger value than the underlying crypto of that asset. On the contrary, a pegged crypto means the crypto price is sticking to one specific asset’s price. Therefore, the TEA price can be much higher than the backing cryptos.

Is TEA a stablecoin?

No, TEA is not a stablecoin. Rather, TEA aspires to become an algorithmic reserve currency backed by other decentralized assets. Similar to the idea of the gold standard, TEA provides free-floating value its users can always fall back on, simply because of the fractional treasury reserves TEA draws its intrinsic value from.

What is the utility of TEA token?

TEA is the primary token of TeaDAO, having multiple functionalities as follows:
  • Staking: Users stake their TEA tokens on TeaDAO to earn TEA rewards that come from bond sales.
  • Governance: TEA stakers receive sTEA tokens at a 1:1 ratio that tokens represent the voting power on the platform. In addition, sTEA is the transferable token.

What will TEA's intrinsic value be in the future?

There is no clear answer for this, but the intrinsic value can be determined by the treasury performance. For example, if the treasury could guarantee to back every TEA with 100 USDT, the intrinsic value will be 100 USDT. It can also be decided by the future DAO. For example, if the DAO decides to raise the price floor of TEA, its intrinsic value will rise accordingly.

What are the scenarios that lead to TEA's supply/price contraction?

For this question, we believe there's no way to pre-define all the possible scenarios since this business model is very sophisticated itself and the crypto space is changing very fast. Instead, what we are focusing on is to take into consideration various models aiming for optimizing the ratios of NFTs in different platforms, optimizing among NFTs, DeFi assets, and other types of assets in the treasury.
Moreover, it's important to note that TEA tokens are always backed by a basket of assets in the treasury, ensuring that TEA cannot be minted from thin air. Besides, by running thousands of simulations, we are able to give out the most optimized suggestions to run the system smoothly. We are also able to set out the key metrics to measure the effectiveness and successes such as the ratios among different types of assets in Treasury; the relationship between the current price and minimum price of TEA token; etc.

How are NFTs priced by the bonding pool?

Evaluating the true value of NFTs is never an easy task. We build the NFT Price Feed mechanism (esp for ERC 1155) to run through the marketplace to identify the type of the NFT, how many similar items are available, its price range, transaction history, etc. That information will be the inputs for the NFT valuation model. The cool thing is that the price-feed mechanism actually addresses the issue of NFT price manipulation.
We also integrate with a couple of soon-to-be-released oracle data partners to gather more information, ensuring the transparency, objectiveness and comprehensiveness of the NFT Valuation process.

How does TeaDAO deal with NFT price manipulation?

TeaDAO develops the NFT Price Feed Protocol to address the issue of NFT price manipulation. The price-feed mechanism will set the floor price for the NFT based on crawled data such as the type of the NFT, the number of similar items, its price range, etc. That information will be the inputs for the NFT valuation model. Interestingly, NFT Price Feed is more than just the floor price; it is also affected by other factors such as rarity, transaction history, and so on. Furthermore, the floor price will not be changed on a regular basis, the way it works is somewhat similar to UNISWAP's Oracle TWAP model.
Beside assessing the NFT itself, we also develop GameFi Pulse to monitor the performance of the GameFi project, making sure it’s still in a healthy state.

What happens if the floor price/demand for those NFTs drops drastically after the bond is vested?

First, we have strict criteria for GameFi partner selection. The GameFi's NFT will be assessed by our NFT Price Feed while the performance of the GameFi project is monitored by GameFi Pulse, making sure the project is still in a healthy state.
Additionally, the way NFT-as-a-Bonding-asset works also protects the interests of TEA holders. When creating an NFT liquidity pool, GameFi projects have to deposit a certain amount of stablecoins (which is equal to the TEA's min-price based on RFV) into TeaDAO treasury in order to mint TEA. This ensures that TEA is always backed by stables, thereby maintaining TeaDAO's healthy operation.