Pledge
(Stage 2 deliverable)
'Creditors shall have first right to refuse settlement of debt (GUILD) for streaming revenue in the form of 3's designated stable (currently crvUSD) at a fixed rate of 1:1.'
Purpose.
Provide a simplified and primary means to exit 3's ecosystem.
Function.
3's ecosystem has been designed to satisfy the following terms to the best of its ability. Should it be felt that 3 may improve upon or is not satisfying the following terms, a change request may be proposed.
Terms.
Creditors acknowledge and accept:
The term 'revenue' in the context of 3 specifically and exclusively refers to 3's designated stable (or stables) at the point of receipt by or in a designated Settlement Contract.
The term 'core' in the context of 3's revenue specifically and exclusively refers to activity surrounding The Reserve and its efforts.
Staking debt is permanent and irreversible.
PD of Stage 2, Settlement occurs on a FCFS basis and at a rate equal to the receipt of revenue.
PD of Stage 3, Settlement occurs pro-rata and at a rate equal to the receipt of revenue.
Hence:
Creditors of 3 shall have the right but not the obligation to stake debt owed to them in a designated Settlement Contract.
Having staked debt, Creditors shall have the right to receive 1 designated stable for each unit of debt they have staked in the designated Settlement Contract.
Compliant Sources.
In the effort to satisfy the above pledge and its terms, 3 has positioned its Settlement Contract(s) ahead of all other core revenue activity, the sources of which are as follows:
Grove held 3NFTs.
All reward liquidations associated to assets controlled by Grove held 3NFTs are first directed to the Settlement Contract irrespective of the contracts staked debt balance.
Legends.
All reward liquidations associated to assets controlled by Legend held 3NFTs are first directed to the Settlement Contract to fulfil its pledge as guarantor.
All lending revenue received by Legend held 3Bonds are first directed to the Settlement Contract to fulfil its pledge as guarantor.
3Bond Fees.
The Guild applies a 1% fee on stables received for each 3Bond sold. 100% of this fee is directed to the Settlement Contract.
Lending.
Non-Compliant Sources.
The following revenue streams are not applicable to the pledge for the reasons stated below. They are categorised as upstream or downstream sources to orientate each respective sphere of activity to that of the Settlement Contract.
Upstream.
These sources occur prior to settlement activity and so cause may exist to include them in the pledge. That said, these sources are functional in their own right and hence currently excluded.
'Functional' meaning: 'The revenue created is a necessary step to enable onward activity/ utility/ functionality...'
Harvesters.
Each harvester, through its activity to process assets within 3, collects a sum-total of 1% of the value harvested and processed. As a source, the 1% received is reserved to implement and finance the automation of these activities.
Any surplus, when it exists, will be passed periodically to the Grove's HC in the form of ETH.
Grove held 3Receipts.
Amounting to CDP deposits held by the Grove, these deposits auto-compound their rewards to grow the deposited asset base. When compounded deposits are migrated to the parent contract, the number of 3Receipts held increase, subsequently increasing the number of 3NFTs that can be minted.
Legends will hold the exclusive right to mint or burn 3NFTs of Level 4 and below.
Arb. Fees.
Fees collected from arb. activity are collected in GUILD. As such, they are not conducive to supporting the pledge referenced above.
Downstream.
All downstream sources are exempt from inclusion under the aforementioned pledge and its terms due to the sheer fact they follow from or succeed the Settlement Contract.
For clarity, those that apply to this category are listed below.
Excess revenue.
Designated stable is converted to ETH and fed to the Reserve Vault till its requirements are met. Thereafter, excess ETH is considered Surplus revenue.
Surplus revenue.
ETH collected by the Distribution Contract as surplus is distributed to PODs according to their VW3 weights. Once ETH is claimed by each POD, with a few exceptions, the asset is considered external to 3's ecosystem.
Internal PODs.
ETH received by internal PODs is used exclusively for the betterment of the 3 ecosystem.
Grove held Legends.
ETH received from the Distribution Contract as compensation for their continued pledge as guarantor, is sourced itself from surplus revenue and therefore downstream and hence exempt.
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