Holding Contract
The Protocol's Economic Engine
Introduction
The Holding Contract is the central treasury and operational heart of the 3 ecosystem. It is a non-custodial smart contract that receives, manages, and autonomously redirects all assets acquired by the protocol. It functions as the autonomous engine that powers the entire financial system, ensuring every asset is productively put to work according to a hardcoded monetary policy.
The Value Flow: From Acquisition to Distribution
The contract operates on a precise logic where every incoming asset has a predefined, automated path. This creates a predictable and transparent economic cycle.
Primary Value Sources
The contract is capitalised through the protocol's core activities:
GuildSwaps Farm & Arbitrage: Acquisition of discounted derivative assets (e.g., sdCRV, cvxCRV).
Revenue Generation: Yield (e.g. crvUSD) earned from the assets held within the contract and its associated strategies.
Fees: Protocol fees, such as those from arbitrage activities.
A Note on the Harvester:
A 1% fee is applied by the Harvester contract during yield harvesting. This fee is not captured by the Holding Contract. It funds a dedicated multi-sig responsible for managing the complex and evolving landscape of DeFi strategies. This ensures the protocol can swiftly adapt to changes in reward tokens or mechanics without requiring a costly upgrade to the core Holding Contract, thereby safeguarding the treasury's productivity and security.
Strategic Value Redirects
All assets are automatically redeployed to fuel specific functions of the ecosystem. The following are the routes currently implemented and planned:
Source.
Asset in.
Destination.
GuildSwap FARM
yCRV
CDP, routes through Yearn
GuildSwap ARBITRAGE
yCRV
CDP, routes through Yearn
GuildSwap FARM
cvxCRV
CDP, routes through Convex
GuildSwap ARBITRAGE
cvxCRV
CDP, routes through Convex
GuildSwap FARM
CRV
Converted to derivative
GuildSwap FARM
CVX
(Pending strategy upgrade)
GuildSwap FARM
SDT
Routed through 3's Stake DAO Master Node, deposited into Gauge.
Distributions: Creditors
ETH
Distributed to 3Fi token holders
SSLP Lending revenue
GUILD
Accumulated till balance permits minting to 3Bonds
SSLP Liquidations
GUILD
Accumulated till balance permits minting to 3Bonds
PHA's GUILD balance
3Bonds
Accumulated till balance permits reserving a Legend
PHA's 3Bond balance
Legends
Guarantees 3's ecosystem
PHA, Composed 3NFTs
crvUSD
Settlement Contract (v2)
SSLP Liquidations
3NFTs
Added to existing 3NFT holdings
SSLP Liquidations
3Fi
Permanently staked to accumulate VW3 tokens
The 3Fi Token: A Claim on the Engine's Success
The Holding Contract is the ultimate source of value for 3Fi token holders. Their reward is not a fee, but a claim on the engine's residual success.
A Residual Claim: 3Fi holders are the last in the value distribution line. They only receive value after the protocol's operational costs are covered and the Reserve Requirement is met. This aligns their incentives with the long-term, runaway success of the entire system.
Valuation Backing: While not a direct redemption right, the total value of all assets held in the Holding Contract represents the intrinsic value backing the 3Fi token. As the treasury grows through its acquisition and yield strategies, the fundamental value of the governance token appreciates.
Value Realisation: The primary mechanism for 3Fi holders to capture this value is through the distribution of ETH. Once the Reserve is fortified, surplus ETH generated from the contract's activities is distributed to 3Fi stakers, directly linking governance participation to the cash flow of the protocol.
In essence, the Holding Contract isn't just a wallet; it is a programmable, revenue-generating entity. Its health and growth are the foundation for the entire ecosystem's stability and the ultimate value accrual for its sovereign governors, the 3Fi token holders.
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