Crystl.Finance Presents: FortuneDAO
Given our own recent ambitions to build protocol owned liquidity and explore the concepts of DeFi 2.0, we are excited to strengthen our cooperation with the FortuneDAO — as the $FORT token is the basis of the first decentralized reserve currency on the Cronos chain. The #CrystalCrew is thrilled to work with another project taking the lead for in this promising sector of DeFi!
The prospect of mutual growth is bright, with both partners seeking to work together to bring value to the DeFi ecosystem on Cronos, let’s unfold!
What is FortuneDAO?
FortuneDAO is the first OlympusDAO fork to go live on Cronos. One of the core differentiators of FortuneDAO is their desire to farm and accumulate native tokens on Cronos by utilizing their treasury. They seek to partner with other protocols to support the native ecosystem of this chain by accumulating project tokens in their treasury and effectively keeping said tokens out of circulation.
DAO stands for decentralized autonomous organization, where the highest level governance is ensured by a group of committed investors.
What Problem Does FortuneDAO Solve?
- Stablecoins are pegged to the US dollar, which means that just like the US dollar, stablecoins are subject to the depreciation of the dollar’s purchasing power driven by the inflation controlled by the Federal Reserve.
Originally, OlympusDAO’s main innovation was “PCV,” or protocol controlled value. This manifests as a treasury which holds a basket of assets such as stablecoins and liquidity provider tokens (LP) for various cryptos, including $OHM — the native token of the Olympus protocol. These assets held by the treasury serve to back & defend the price of $OHM and help back its peg and support its price. Because $OHM is minimally backed by at least 1 $DAI, this guarantees a floor value of 1 $DAI for $OHM as the treasury will use its reserves to purchase $OHM from the market if it ever goes below the price of 1 $DAI. In practice $OHM is valued far above 1 $DAI and a driving force for this fact is the prior mentioned treasury. As the treasury grows and accumulates assets — including protocol owned liquidity for $OHM, this pushes the price of $OHM further while boosting the market’s confidence in the $OHM token.
- Olympus aims to bring an alternative to stablecoin currencies by creating a free-floating reserve currency called $OHM with a purchasing power that is backed by a basket of assets in a decentralized on-chain treasury.
Unlike the case of algorithmically controlled coins, which behave in an automatic nature, responses to undesired price behavior and market forces can be triggered by the community behind the DAO. Here on the Cronos chain, $FORT is an experiment equivalent to Olympus DAO, and as such the governance will be controlled at a high level by the investors behind FortuneDAO.
How is FortuneDAO Different From Other Olympus Forks?
FortuneDAO is promising to be the first to build something unique on the Cronos chain, riding the wave of new users and DeFi enthusiasts coming into Cronos from Crypto.com. Unlike other $OHM forks which hoard their reserves and only do normal farming, FortuneDAO seeks to put their treasury assets to work in innovative ways! Any excess reserves will be converted to assets which FortuneDAO will use to farm in the Cronos ecosystem and accumulate other native tokens.
- “We won’t sell any accumulated natives. Ever”. — FortuneDAO team
A strong promise! It is exciting to imagine where FortuneDAO will end up in the long run by having a foothold in many projects native to Cronos.
Here are a few interesting factors which might inspire confidence about investing in FortuneDAO:
- Blackhole Feature: Using assets which are originally idle in the treasury, FortuneDAO aims to support the Cronos ecosystem by accumulating large amounts of governance tokens from other protocols. In doing so, FortuneDAO aims to have an important say in the governance proposals of other protocols that may serve to benefit FortuneDAO.
- Long Runway: When it comes to Olympus forks, the runway is an interesting statistic which indicates the amount of days that the treasury can afford to pay $OHM stakers the presented APY. In the case of FortuneDAO the runway is currently valued at 307 days, which means that the treasury is capable of sustaining $FORT rewards at 15,300% APY for this long!
- Low Index: The index statistic is an indication of how many $OHM rewards have been minted and distributed to $OHM stakers through the rebasing mechanism. For FortuneDAO the current index is 1.93 $FORT, which means for every initial $FORT token only x1.93 $FORT have been distributed to stakers. Why is this good? Well, this is an indication that FortuneDAO is still in the very beginning of its lifetime. There are only so many $FORT tokens in circulation and thus participating in staking this early on means that the opportunity to accumulate a greater proportion of the future supply is now.
Investing With $FORT
There’s 2 ways of interacting with FortuneDAO, Staking and Minting.
Staking allows you to earn $FORT through auto-compounding rebase rewards. By staking your $FORT with FortuneDAO, you receive $sFORT (staked FORT) in return at a 1:1 ratio. After that, your $sFORT balance will increase automatically on every epoch (8 hours) based on the current APY. When you unstake, you burn $sFORT and receive an equal amount of $FORT. Unstaking means the user will forfeit the upcoming epoch reward. Note that the forfeited reward is only applicable to the unstaked amount; the remaining staked $FORT (if any) will continue to receive rebasing rewards.
To begin staking you will need to either purchase $FORT from the market or participate in minting to obtain $FORT tokens.
The Mint page allows users to mint new $FORT tokens by interacting with the protocol. Investors may obtain $FORT at a discount below the market price by trading:
- i) liquidity (LP tokens) i.e. $FORT — $DAI LP
- ii) other assets i.e. $USDC, $DAI
The former is called liquidity minting and the latter reserve minting. The minting action creates bonds, which take roughly 15 epochs to vest. Over this period the investor will receive $FORT tokens vested linearly. Liquidity minting helps the protocol to accumulate and lock permanent on-chain liquidity, while reserve minting allows the protocol to grow its treasury, thus accelerating the value backing each $FORT.
Crystl Finance x FortuneDAO
FortuneDAO has invested over $554,000 in Crystl Vaults to automatically grow their treasury! This information is transparent and available on the FortuneDAO Blackhole page.
Crystl Vaults operate by farming reward tokens on underlying platforms such as VVS Finance, CronaSwap, and others. These farmed earnings are automatically sold on the market for more of the same LP and the LP then automatically staked on back on the farm to accumulate more rewards. In the case of FortuneDAO’s investment, Crystl Vaults are auto-compounding $252,000 worth of $USDC-$DAI LP and $302,248 worth of $USDC-$USDT LP!
The Future of FortuneDAO
Like many other protocols on Cronos, FortuneDAO is still in it’s very early stages. At the present time, the FortuneDAO team is focused on building and establishing the core model of their business. After successfully launching FortuneDAO on Nov 19 2021 the Blackhole farming feature is ready, and the next focus includes:
- Testing out the security of the multi-sig (an address that will hold all the accumulated treasury funds).
- New contracts & features such as the stable-swap and more kinds of bonds.
- New partnerships & plans for FortuneSwap as well as airdrops.
At the beginning, the core team of FortuneDAO took it upon themselves to make initial decisions. Now, the first governance module has been released on 18 Dec 2021. They are the 5th protocol on Cronos to officially implement governance via snapshot.org.
The future of FortuneDAO looks bright! It is inspiring to see how a decentralized approach to operating their protocol through community involvement will work out in the long term. FortuneDAO is currently the pioneer for other DAOs on the Cronos chain, and if they are successful, other projects could very well get encouragement to follow in their path!
Further questions are still open about the future, such as integration & official listing in the CDC Defi App’ dApps menu. Stronger marketing, and aspirations to have a protocol that is easy to use will be a must to capture and persuade more users to grow the treasury and make FortuneDAO a success!
Investing In FortuneDAO
A great question any investor will ask is “Why should I invest in FortuneDAO?”. A reasonable question indeed!
From the prospect of staking: The main benefit for stakers comes from supply growth. When the protocol mints new $FORT tokens from the treasury, the majority of which are distributed to the stakers. Thus, the gain for stakers will come from their auto-compounding balances, though price exposure remains an important consideration. That is, if the increase in token balance outpaces the potential drop in price (due to inflation and selling), stakers would make a profit.
From the prospect of minting: The main benefit for minters is obtaining $FORT tokens below the market price. This can be seen either as an arbitrage opportunity, or as an opportunity to accumulate a larger amount of $FORT tokens to be used for staking than those available to buyers at the current market price.
Overall, think of FortuneDAO as a play on the future of the Cronos ecosystem following the ideals of a DAO. You bet on the future of Cronos and in the capacity of the FortuneDAO team and their community while also earning high APY in $FORT tokens. By supporting decentralized finance and DAOs, investors have the opportunity to participate in the “cutting edge” of the cutting edge of DeFi. DAOs can be seen as the peak of finance innovation, being at the forefront of DeFi. Given the potential of the Cronos chain, FortuneDAO may be of interest to those investors who wish to lay the building blocks at the grounds of a future ecosystem!
It is important to keep in mind that the Cronos ecosystem is still in its early days, which of course magnifies the risk. With that being said, Crypto.com’s ongoing aggressive marketing inspires confidence in the potential of the Cronos chain. The Cronos ecosystem has the potential to see a large number of new users in 2022. If you are patient enough to #HODL through the early days, the results will speak for themselves in the future.
Interested? To buy $FORT, use CronaSwap. Alternatively, you may participate in minting if you wish to obtain $FORT tokens below the market price! Be sure to observe the discount rate & vesting period before participating in minting. The discount value must be positive for minting to be the better choice.
As always, only invest what you can afford to lose. Do your own research, and do not take anything you read on this article as financial advice. You are always responsible for your own investment decisions in DeFi!
Join the community for discussion about FortuneDAO!
Other Resources & Information
Reserve currency: a large quantity of currency maintained to allow investments, transactions, & debt obligations. It reduces exchange rate risk. In Fiat, the US Dollar is the major reserve currency, and many commodities are priced in USD, such as gold and oil. Source: https://www.investopedia.com/terms/r/reservecurrency.asp
Minting: it is the process of how new coins come into existence on the blockchain.
DAO: an internet-native business that’s collectively owned and managed by its members. They have built-in treasuries that no one has the authority to access without the approval of the group. Decisions are governed by proposals and voting to ensure everyone in the organization has a voice. Source: