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SamUchiha proposes the Ignite Contract, an on-chain investment arm for the AAVE token, leveraging its reputation to sell bonds, raise USD, and provide funds to other protocols via governance proposals. The contract includes a token burn function and aims to raise 200 million USD for 50+ protocols, with a goal to burn 1,000,000 to 5,000,000 AAVE in the next 24 months.
The discussion revolves around the concept of an Ignite Contract, a smart contract proposed by SamUchiha that acts as an on-chain investment arm of the AAVE token1. The Ignite Contract leverages the reputation of the AAVE token to sell bonds and raise USD, which is then provided to other protocols via a governance proposal. The funds, along with the bond yield, are returned after a fixed period of time. The Ignite Contract also proposes a token burn function, requiring the fund-receiving protocol to burn a certain amount of AAVE tokens daily for a set period of time1.
The philosophy behind the Ignite Contract is "Implicit Opportunity Cost Leveraging", a risk-free, expense-free method of lowering the implicit cost of a financial product, potentially making it perform better than it would on its own1. SamUchiha also discusses the potential problems and concerns with not leveraging the AAVE token, such as missing out on opportunities in the fast-growing crypto ecosystem and the risks of centralized investment DAO solutions1.
The Ignite Contract can have different versions, such as a bailout version for hacked protocols, a version that provides USD funds to DAO treasuries to fund projects, a version that provides liquidity to smaller cap protocols, and a Gamefi version that uses AAVE as collateral or currency1. The Ignite Contract raises funds by using the AAVE token credit as collateral to sell bonds and raise USD with a 10% fixed APY. The 10% APY is generated by the funded protocol, and after a fixed period of time, the loan amount plus the 10% APY is returned1.
SamUchiha proposed a token burning mechanism for AAVE tokens, which won't make any profit or loss but will be gradually burned by third-party protocols. The mechanism is either time-limited, with a preset daily burn amount, or amount-limited, using a percentage of fees generated from the protocol to buy and burn AAVE until a certain amount is burned in total1.
The mission is to raise 200 million USD for 50+ protocols, aiming to burn 1,000,000 to 5,000,000 AAVE in the next 24 months or over time. The target protocols to implement the Ignite Contract include Beanstalk Protocol and other small cap big potential protocols1.
The post ended with a potential offer for Aave DAO to raise 20 million USD by bond selling and lend it to Beanstalk DAO, which will use the funds to restart the protocol. Beanstalk DAO will have to return the funds with 10% APY after 12 months and start burning AAVE tokens1.
Posted 2 years ago
Last reply 2 years ago
Summary updated 2 months ago
Last updated 04/12 00:18