# Introduction {% hint style="danger" %} Please refer to our latest HunnyFinance Phase 2 development medium article here\ {% endhint %} ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FYsoq3MzFxsrQfSAzeueE%2FDao1.jpg?alt=media\&token=3c574712-564f-471c-bee4-5bbfc1f179a4) ### What is HunnyDAO? HunnyDAO re-invent a technique used by the old central banks to peg its own LOVE token with a basket of decentralized assets (e.g: BUSD, BNB, HUNNY) which is stored in the HunnyDAO treasury. A differentiating factor of HunnyDAO as compared to others is that HunnyDAO will introduce a secondary treasury that is backed by the profits of the Hunny ecosystem which includes HunnyPlay, HunnyPoker and others, since we have been around and our established products have been generating revenue, we are not only able to back HunnyDAO with assets received in the treasuries but we are also able to ensure longevity with the constant growth of Hunny’s entire ecosystem. HunnyDAO also introduces unique economic and game-theoretic dynamics into the market through staking and bonding. Read more about the game theory [here](/references/the-game-theory). ### How to join HunnyDAO? The 2 main strategies are staking and bonding. Stakers can stake their LOVE tokens in return for more LOVE tokens, while bonders provide their LP, BUSD and other tokens in exchange for LOVE at a discounted price after a fixed vesting period. ### What do I gain from joining HunnyDAO? #### **For Stakers:** The main benefit for stakers comes from supply growth. HunnyDAO mints new LOVE 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), stakers would make a profit. #### **For Bonders:** The main benefit for bonders comes from price consistency. Bonders commit capital upfront and are promised a fixed ROI at a set point in time with varying price discounts; that return is in LOVE and thus the bonder's profit would depend on LOVE price when the bond matures. Bonders will benefit from a rising or static LOVE price. ### **Who are the creators of HunnyDAO?** HunnyDAO is built by Team Hunny. We are a group of developers who are very much into yield farming and trading ourselves. We are also the creators of the yield optimising platform - [Hunny.Finance](https://hunny.finance/) & the i-Gaming platform - [HunnyPlay](https://hunnyplay.com/). # FAQ {% hint style="danger" %} Please refer to our latest HunnyFinance Phase 2 development medium article here\ {% endhint %} ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FvOjE3C9OQJt8jiSnUOlW%2FHunnyDAO-FAQ.jpg?alt=media\&token=6baab5e0-46ce-4d5c-9f43-e8a51ebdcfab) ### Why is PCV important? PCV is the Protocol Controlled Value. As HunnyDAO controls the funds in its treasuries, LOVE can only be minted or burned by the protocol. As HunnyDAO accumulates more PCV, 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 treasuries. This is one of the main reasons why having a secondary treasury like in HunnyDAO is crucial for the sustainability of the protocol. ### Why is POL important? HunnyDAO owns most of its liquidity thanks to its bond mechanism. This has several benefits: * HunnyDAO does not have to pay out high farming rewards to incentivize liquidity providers a.k.a renting liquidity. * HunnyDAO guarantees the market that liquidity is always there to facilitate sell or buy transactions. * By being the largest LP (liquidity provider), it earns most of the LP fees which represents another source of income to the treasury. ### What is a rebase? Rebase is a mechanism by which your staked LOVE balance increases automatically. When new LOVE is minted by HunnyDAO, a large portion of it goes to the stakers. Because stakers only see staked LOVE balance instead of LOVE tokens, the protocol utilizes the rebase mechanism to increase the staked LOVE balance so that 1 staked LOVE is always redeemable for 1 LOVE token. ### What is reward yield? Reward yield is the percentage by which your staked LOVE balance increases on the next interlude. It is also known as rebase rate. ### What is APY? APY stands for Annual Percentage Yield. It measures the real rate of return on your principal by taking into account the effect of compounding interest. In the case of HunnyDAO, your staked LOVE represents your principal, and the compound interest is added periodically on every interlude (around 8 hours) thanks to the rebase mechanism. ### How is the APY calculated? The APY is calculated from the reward yield (a.k.a rebase rate) using the following equation: $$ APY = ( 1 + rewardYield)^ {1095} $$ It raises to the power of 1095 because a rebase happens 3 times daily. Consider there are 365 days in a year, this would give a rebase frequency of 365 \* 3 = 1095. Reward yield is determined by the following equation: $$ rewardYield = LOVE\_{distributed} / LOVE\_{totalStaked} $$ The number of LOVE distributed to the staking contract is calculated from LOVE total supply using the following equation: $$ LOVE\_{distributed} = LOVE\_{totalSupply} \* rewardRate $$ Note that the reward rate is subject to change by the DAO. ### How does the protocol manage to maintain the high staking APY? Let’s say HunnyDAO targets an APY range of 1,000% to 10,000%, this would translate to a minimum reward yield of about 0.2105%, or a daily growth of about 0.6328%. You can refer to the equation above to learn how APY is calculated from the reward yield. If there are 100,000 LOVE tokens staked right now, HunnyDAO would need to mint an additional 632.8 LOVE to achieve this daily growth. This is achievable if HunnyDAO can bring in at least $632.80 of daily revenue from bond sales. Even in the worst-case scenario whereby HunnyDAO doesn't bring in that much revenue, it can still sustain 1,000% APY for a considerable amount of time due to the excess reserve in the treasuries. This is the reason why HunnyDAO secondary treasury will play an important role here. ### Do I have to unstake and stake LOVE on every interlude to get my rebase rewards? No. Once you have staked LOVE with HunnyDAO, your staked LOVE balance will auto-compound on every interlude. That increase in balance represents your rebase rewards. # Staking ### What is Staking? Staking is the primary value accrual strategy of HunnyDAO. Stakers stake their LOVE on HunnyDAO to earn rebase rewards. The rebase rewards come from the proceeds from bond sales, and can vary based on the number of LOVE staked in the protocol and the reward rate set by monetary policy. Staking is a passive, long-term strategy. The increase in your stake of LOVE translates into a constantly falling cost basis converging on zero. This means even if the market price of LOVE drops below your initial purchase price, given a long enough staking period, the increase in your staked LOVE balance should eventually outpace the fall in price. When you stake, you lock LOVE and receive an equal amount of KISS. Your KISS balance rebases up automatically at the end of every interlude. KISS is transferable and therefore composable with other DeFi protocols. When you unstake, you burn KISS and receive an equal amount of LOVE. Unstaking means the user will forfeit the upcoming rebase reward. Note that the forfeited reward is only applicable to the unstaked amount; the remaining staked LOVE tokens (if any) will continue to receive rebase rewards. # Hyper Staking ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FaFCwqMVyKhYS8tnCGWWQ%2Fhyperstaking-love.jpg?alt=media\&token=6f5351f9-ea50-45a9-be34-303ea3e511f2) ### What is Hyper Staking? Hyper Staking is the new staking vault that not only allows users to stake their LOVE token on HunnyDAO to earn rebase rewards but at the same time let bonders redeem their HUGs for LOVE tokens. The introduction of the Hyper Staking Vault allows for a new mechanism to be implemented, whilst keeping the APY extremely competitive. {% hint style="info" %} Users can only receive HUGs through Kinetic Bonding. {% endhint %} Hyper Staking works exactly like the previous staking vault with a few exceptions: 1. Unstaking will trigger a 24-Hour Linear Vesting of **UNSTAKED AMOUNT.** 2. Clock will trigger to reset after any unstaking action is performed. 3. Bonders can redeem their HUG for LOVE. # Bonding ### What is Bonding? Bonding is the secondary value accrual strategy of HunnyDAO. It allows HunnyDAO to acquire its own liquidity and other reserve assets such as BUSD by selling LOVE at a discount in exchange for these assets. The protocol quotes the bonder with terms such as the bond price, the amount of LOVE entitled to the bonder, and the vesting period. The bonder can claim some of the rewards (in LOVE) as they vest, and at the end of the vesting period, the full amount will be claimable. Bonding is an active, short-term strategy. The price discovery mechanism of the secondary bond market renders bond discounts more or less unpredictable. Therefore bonding is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking. Bonding allows HunnyDAO to accumulate its own liquidity. We call our own liquidity Protocol Owned Liquidity (POL). More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Since HunnyDAO becomes its own market, on top of additional certainty for HunnyDAO investors, the protocol accrues more and more revenue from LP rewards bolstering our treasury. # Kinetic Bonding ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FqzHRk0LQIKhAoWcsib0g%2Fimage.png?alt=media\&token=82c1f6fc-0c17-44e5-b4b2-32ec464c07c3) ### What is Kinetic Bonding? Kinetic Bonding gives ***MASSIVE DISCOUNT*** for LOVE, ***GET*** KISS and ***ATTRACTS*** HUG. Typically when users bond, they provide HunnyDAO with reserve assets such as BUSD in exchange for discounted LOVE. However, in Kinetic Bonding, users are also rewarded with HUG that can be redeemed to LOVE. The amount of HUG that users can receive will be displayed in the Kinetic Bonding Dashboard before users entered for bonding. ### How do I Redeem HUG for LOVE? HUGs are performance vested using the Fibonacci Sequence. The Fibonacci sequence can be described using a mathematical equation: $$ X\_{n+2}= X\_{n+1} + X\_{n} $$ To get the amount HUG that can be redeemed for LOVE: $$ HUG = TotalKISS\_{earned} \* Loyalty Ratio \* HCV $$ The total KISS earned is based on the following formula: $$ TotalKISS\_{earned} = KISS\_{unstake} - LOVE\_{staked} $$ The Loyalty Ratio is based on the Fibonacci Sequence. $$ Fibonacci Sequence: 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, ....... $$ When the number of rebases meet the next Fibonacci Sequence, the Loyalty Ratio will be increased to the next level. {% hint style="info" %} LOVE must be STAKED in order for HUGs to be redeemable. Unstaking part of your LOVE will reduce the number of HUGs that can be redeemed for LOVE. Unstaking ALL of your LOVE will result in HUG not being able to redeem for LOVE as there will be no KISS earned from staking. {% endhint %} The below table demonstrates the effect of the number of Rebases on the Loyalty Ratio. | Number of Rebases | Fibonacci Sequence | Loyalty Ratio | | ----------------- | :----------------: | :-----------: | | 1 | 1 | 1% | | 2 | 2 | 2% | | 3 | 3 | 3% | | 4 | 3 | 3% | | 5 | 5 | 5% | | 6 | 5 | 5% | | 7 | 5 | 5% | | 8 | 8 | 8% | | ...... | ...... | ...... | # How to Buy LOVE There are 2 ways to get LOVE ## Purchase from PancakeSwap * Go to PancakeSwap [here](https://pancakeswap.finance/swap?inputCurrency=0xe9e7cea3dedca5984780bafc599bd69add087d56\&outputCurrency=0x9505dbD77DaCD1F6C89F101b98522D4b871d88C5). * Connect your wallet to PancakeSwap. * If this is the first time you are purchasing LOVE from PancakeSwap, you need to **APPROVE** the token. * Proceed to APPROVE the token and wait for the transaction to complete. * Enter the amount of BUSD or LOVE you would like to purchase. * Set your desire "Slippage". {% hint style="info" %} In a period of high market volatility, you may need to set higher slippage for the transaction to be complete. Any failed transaction will cause you a gas fee (charged by the miners). {% endhint %} * Click on "SWAP" and approve the transaction on your wallet. * Once your transaction is completed, you can view your LOVE balance in your wallet. ## Purchase BOND from HunnyDAO * Refer to the documentation [here](/hunnydao-guide/how-do-i-purchase-bond). # How to Hyper Stake * Before you stake, make sure you have some LOVE available in your wallet. * Go to HunnyDAO staking page [here](https://dao.hunny.finance/#/hyper-stake). * If this is your first time staking LOVE, you will need to **APPROVE** the token. ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FzFyRXSnl1sPf2eP3cqvK%2Fimage.png?alt=media\&token=5b441096-cfe3-47c2-a84f-443bea5a51ad) * Proceed to APPROVE the token and wait for the transaction to complete. ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FxD41QA1rKAknne0FuKc8%2Fimage.png?alt=media\&token=6d378734-3d98-4631-87fb-6098393a6dc5) * Enter the amount of LOVE you would like to stake. * Click on "STAKE LOVE" and approve the transaction on your wallet. * Wait for transaction confirmation. * After the transaction is successfully completed, you will receive KISS in your wallet. {% hint style="danger" %} **Please note that KISS token is needed for you to unstake your LOVE. Please consider carefully before SELLING or TRANSFERRING your KISS. You may lose your staked LOVE if you do so.** **Do read the basics of staking** [**here**](/basics/staking/hyper-staking)**.** {% endhint %} * During every rebase, your Staked Balance will be updated to display your staking rewards. # Unstaking {% hint style="warning" %} When you unstake your KISS from Hyper Staking, your LOVE will be linearly vested for 24hours. Unstaking will also reset your Loyalty Ratio and reduce the number of HUGs that can be redeemed for LOVE. {% endhint %} * Before you unstake, make sure you have KISS available in your wallet. * Go to HunnyDAO staking page [here](https://dao.hunny.finance/#/hyper-stake). * Click on the "Unstake" Tab * If this is your first time unstaking KISS, you will need to **APPROVE** the token. ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FfPap5Vo3ysYmqcA9ZuvF%2Fimage.png?alt=media\&token=41fba144-0039-4c37-855c-e7044c6a96b8) * Proceed to APPROVE the token and wait for the transaction to complete. ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FykHHlo3dts7MbmV6K0cG%2Fimage.png?alt=media\&token=80588f45-5c07-43dd-b70e-6c880004a70c) * Enter the amount of KISS you would like to unstake. * Double-check the total number of LOVE you will get from unstaking and redeeming of HUGs token. * Click on "UNSTAKE LOVE" and approve the transaction on your wallet. * Wait for transaction confirmation. * After the transaction is successfully completed, your LOVE will enter into a 24hours linear vesting period. # Vesting ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FGdJeks6JQ2fBm5XGNOPr%2Fimage.png?alt=media\&token=b3768496-895e-4cff-b9d6-e7a7fa74c0ea) * The amount of unstaked LOVE vested will be displayed in "Total Unstake". * The amount of LOVE that have been unlocked for claiming will be displayed in "Claimable". {% hint style="info" %} Do take note that Restaking and Claiming your tokens will incur a transaction fee paid to the blockchain miners. {% endhint %} Click on the "Claim" button to receive your "Claimable" LOVE. * Approve the transaction on your wallet. * Wait for transaction confirmation. * After the transaction is successfully completed, you will receive LOVE in your wallet. You may choose to "Restake" your LOVE anytime by clicking on the "Restake" button. * Approve the transaction on your wallet. * Wait for transaction confirmation. * After the transaction is successfully completed, your LOVE will be restaked in the Hyper Staking Vault. # How to Stake Stake (3,3) {% hint style="danger" %} **Previous Staking Vault that uses the V1 KISS token will no longer generate rebase rewards.** **Users are strongly encouraged to migrate their V1 KISS tokens by unstaking from the previous staking vault and restake to the HYPER STAKING Vault.** {% endhint %} ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FQUlxmMVvOzY2Nlve2kPS%2Fstakelovegetkiss.jpg?alt=media\&token=57d60ac0-ad0f-4ade-b51a-24d987de057c) * Before you stake, make sure you have some LOVE available in your wallet. * Go to HunnyDAO staking page [here](https://dao.hunny.finance/#/stake). * If this is your first time staking LOVE, you will need to **APPROVE** the token. ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FcAR2Qz8D5BYxG0PAW4cH%2Fimage.png?alt=media\&token=8a49ff64-f2ea-4190-a104-c5caf716b7df) * Proceed to APPROVE the token and wait for the transaction to complete. ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FEDSqbwgxofXq3FK9Wdpl%2Fimage.png?alt=media\&token=44f76788-233d-4a2c-8358-2d88b5234762) * Enter the amount of LOVE you would like to stake. * Click on "STAKE LOVE" and approve the transaction on your wallet. * Wait for transaction confirmation. * After the transaction is successfully completed, you will receive KISS in your wallet. ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FTq2w2f0H5fX8js60rVre%2Fimage.png?alt=media\&token=d7d3e725-9ae4-4713-b0e3-2f1df0a3ce66) {% hint style="danger" %} **Please note that KISS token is needed for you to unstake your LOVE. Please consider carefully before SELLING or TRANSFERRING your KISS. You may lose your staked LOVE if you do so.** **Do read the basics of staking** [**here**](/basics/staking)**.** {% endhint %} * During every rebase, your Staked Balance will be updated to display your staking rewards. # How do I Purchase Bond Bond (1,1) ## Purchase BOND from HunnyDAO * Go to HunnyDAO [here](https://dao.hunny.finance/#/bonds). * Connect your wallet to HunnyDAO. * Select one of the available **BOND** to purchase. ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FdT427paCj1rixUQRPYlx%2Fimage.png?alt=media\&token=e112c7ec-f6b2-4c5e-ac4a-84b168a78ed3) {% hint style="info" %} More BOND will be added in the future. Please check out our social media channels for updates. {% endhint %} {% hint style="danger" %} **Before purchasing any BOND, please check the ROI and the discounted price before committing your purchase. Once you have committed your purchase, HunnyDAO will not be able to refund your bond purchases.** {% endhint %} * Enter the "Amount" of BOND you would like to purchase. ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2FCAlHhUJsFEX6WxNBy7A8%2Fimage.png?alt=media\&token=7add7299-9bbf-4266-82dd-5b728e02abb9) * Set your desire "Slippage". By default, the Slippage is set to 0.5% ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2F3HpVXPTrNJ6eR7PSXhMM%2Fimage.png?alt=media\&token=26405067-c3eb-4875-91f0-068068654035) {% hint style="info" %} In a period of high market volatility, you may need to set higher slippage for the transaction to be complete. Any failed transaction will cause you a gas fee (charged by the miners). {% endhint %} * Click on "Bond" and approve the transaction on your wallet. * Wait for the transaction to complete. * Once you have Bond successfully, your Bonds will appear on the Bond Page. ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2F1lHGTAZKkS4KGfDhLW7d%2Fimage.png?alt=media\&token=9a0b2da5-c849-489e-9da2-b773973a1034) {% hint style="warning" %} Please take note that Bond Purchases will have a Vesting Period of 5 days. {% endhint %} * Your "Claimable" will slowly increase until it reaches the Fully Vested period. * You can choose to Claim your "Claimable" by clicking on the "Claim" button. # LOVE If you want to buy LOVE on other DEX, do make sure that the token address of the token you purchase matches the one shown below. Never buy any LOVE token from other websites that do not allow you to verify the token address. Further, knowing the LOVE token address you can see the list of holders and available exchanges providing liquidity for LOVE on BSCscan. #### Contract Address: 0x9505dbD77DaCD1F6C89F101b98522D4b871d88C5 # KISS You will receive KISS when you stake LOVE at a 1:1 ratio. Adding this address to your wallet allows you to track your KISS balance which increases with every rebase. V2 KISS Token will be used in our new HYPER STAKING Vault. {% hint style="danger" %} **Previous Staking Vault that uses the V1 KISS token will no longer generate rebase rewards.** **Users are strongly encouraged to migrate their V1 KISS tokens by unstaking from the previous staking vault and restake to the HYPER STAKING Vault.** {% endhint %} #### V1 Contract Address: 0x9F12CAd130D40d40541CaE8e3c295228769ad111 #### V2 Contract Address: 0x67e248F9810D4D121ab2237Eb33D21f646011720 # HUG HUG is performance vested using the Fibonacci Sequence. Users will be able to redeem HUGs for LOVE at a 1:1 ratio in the [Hyper Staking](/basics/staking/hyper-staking) Vault. You may refer to the chapter on [Kinetic Bonding](/basics/bonding/kinetic-bonding) for more information. #### Contract Address: 0x153629b8ce84f5e6dd6044af779aa37adb431393 # Bonds
Bond TypeContract Address
LOVE-BUSD LP0x9e8ae3a26536582823ef82c155b69637a4a753f8
BUSD0xe9e7cea3dedca5984780bafc599bd69add087d56
BNB0xbb4CdB9CBd36B01bD1cBaEBF2De08d9173bc095c
HUNNY0x565b72163f17849832a692a3c5928cc502f46d69
# Kinetic Bonds
Bond TypeContract Address
BUSD0x5b669D9cCb3208eD9c7CbDD09f88357C1cB90Efb
# The Game Theory ### What is Game Theory Game Theory is a study of strategies that could lead to multiple different outcomes depending on the decision made by the competing players. The focus of the game theory is the game itself, which serves as a model of a situation for the players who participated in the game. ### The Model A game model usually consists of the following components: #### Players They make choices based on information they hold about themselves, the other players and the structure of the game. #### Strategy The full set of choices a player makes in a game. #### Payoffs A payoff is the reward to each player, dependent on the outcome of the interaction. We decide payoffs by considering each player's preferences within the game. #### Payoff Matrix A table that lists all the available strategies and their respective payoffs. By analysing the game model, a game theory could allow players to determine the most desirable strategy which results in the best outcome for every player involved. # The Payoff Matrix In HunnyDAO, to achieve the most desirable outcome where every player stands to get the most gain, players need to cooperate with each other. Currently, there are 3 actions a player can take: * Staking (+2) * Bonding (+1) * Selling (-2) Staking and bonding are considered beneficial to HunnyDAO, while selling is considered detrimental. Staking and selling will also cause a price move, while bonding does not (we consider buying LOVE from the market as a pre-requisite of staking, thus causing a price movement). If both actions are beneficial, the actor who moves price also gets half of the benefit (+1). If both actions are contradictory, the bad actor who moves price gets half of the benefit (+1), while the good actor who moves price gets half of the downside (-1). If both actions are detrimental, which implies both actors are selling, they both get half of the downside (-1). Thus, given two actors, all scenarios of what they could do and the effect on the protocol are shown here: ![](https://2508860041-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F0aHK7zkvp4U6Px32mrYS%2Fuploads%2Fec2sMPVGZ23unuCPA450%2FHunnyDAO-Table.jpg?alt=media\&token=6d13537e-9bb2-4d58-8158-1ea0d7860683) ### Situation: 1. If we both stake (3, 3), it is the best thing for both of us and to HunnyDAO (3 + 3 = 6). 2. If one of us stakes and the other one bonds, it is also great because staking takes LOVE token off the market and put it into HunnyDAO, while bonding provides liquidity and BUSD for the treasury (3 + 1 = 4). 3. When one of us sells, it diminishes the effort of the other one who stakes or bonds (1 - 1 = 0). 4. When we both sell, it creates the worst outcome for both of us and to HunnyDAO (-3 - 3 = -6). # The Game Logics ### Staking $$ deposit = withdrawal $$ Swaps between LOVE and KISS during staking and unstaking are always 1:1. The amount of LOVE deposited into the staking contract will always result in the same amount of KISS. And the amount of KISS withdrawn from the staking contract will always result in the same amount of LOVE. $$ rebase = 1 - (LOVE\_{deposit} / KISS\_{outstanding}) $$ The treasury deposits LOVE into the distributor. The distributor then deposits LOVE into the staking contract, creating an imbalance between LOVE and KISS. KISS is then rebased to correct this imbalance between LOVE deposited and KISS outstanding. The rebase brings KISS outstanding back up to parity so that 1 KISS equals 1 staked LOVE. ### Bonding $$ bondPrice = 1 + premium $$ LOVE has an IV of 1 BUSD, which is roughly equivalent to 1 USD. In order to make a profit from bonding, HunnyDAO charges a premium for each bond. $$ premium = debtRatio \* BCV $$ The premium is derived from the debt ratio of the system and a scaling variable called BCV. BCV allows us to control the rate at which bond prices increase. The premium determines profit due to the protocol and in turn, stakers. This is because new LOVE is minted from the profit and subsequently distributed among all stakers. $$ debtRatio = bondOutstanding / LOVE\_{supply} $$ The debt ratio is the total of all LOVE promised to bonders divided by the total supply of LOVE. This allows us to measure the debt of the system. $$ bondPayout\_{reservebond} = marketValue\_{asset} / bondPrice $$ Bond payout determines the number of LOVE sold to a bonder. For reserve bonds, the market value of the assets supplied by the bonder is used to determine the bond payout. For example, if a user supplies 1000 BUSD and the bond price is 250 BUSD, the user will be entitled to 4 LOVE tokens. $$ bondPayout\_{lpBond} = marketValue\_{lpToken} / bondPrice $$ For liquidity bonds, the market value of the LP tokens supplied by the bonder is used to determine the bond payout. For example, if a user supplies 0.001 LOVE-BUSD LP token which is valued at 1000 BUSD at the time of bonding, and the bond price is 250 BUSD, the user will be entitled to 4 LOVE tokens. # LOVE Supply $$ LOVE\_{supplyGrowth} = LOVE\_{stakers} + LOVE\_{bonders} + LOVE\_{HunnyDAO} $$ LOVE token supply does not have a hard cap. Its supply increases when: * LOVE is minted and distributed to the stakers. * LOVE is minted for the bonder. This happens whenever someone purchases a bond. * LOVE is minted for the DAO. This happens whenever someone purchases a bond. The DAO gets the same number of LOVE as the bonder. $$ LOVE\_{stakers} = LOVE\_{totalSupply} \* rewardRate $$ At the end of each interlude, the treasury mints LOVE at a set reward rate. These LOVE will be distributed to all the stakers in HunnyDAO. You can track the latest reward rate on HunnyDAO dashboard. $$ LOVE\_{bonders} = bondPayout $$ Whenever someone purchases a bond, a pre-determined amount of LOVE will be minted. These LOVE will not be released to the bonder all at once - they are vested to the bonder linearly over time. The bond payout uses a different formula for different types of bonds. Check the bonding section above to see how it is calculated. $$ LOVE\_{HunnyDAO} = LOVE\_{bonders} $$ HunnyDAO received the same amount of LOVE as the bonder. This represents HunnyDAO Profit. # Glossary ### APR Annual Percentage Rate is the annualized interest rate without taking the effect of compounding into account. ### APY Annual Percentage Yield is the normalized representation of an interest rate, based on a compounding period over one year. Note that APYs provided are rather ballpark level indicators and not precise future results. ### BCV Bond Control Variable is the scaling factor at which bond prices change. A higher BCV means a lower discount for bonders and higher inflation by the protocol. A lower BCV means a higher discount for bonders and lower inflation by the protocol. ### DAO Decentralized Autonomous Organization is a governance mechanism for making decisions in a more trustless and collaborative way. Voting rights are often bound to a governance token. In HunnyDAO the governance token is KISS. ### DCV Deflation Control Variable is the scaling factor at which protocol defined buy pressure changes. A higher DCV means more buy pressure from the protocol, resulting in a higher deflation. A lower DCV means less buy pressure from the protocol, resulting in a lower deflation. ### HCV HUG Control Variable is the scaling factor at which HUG is redeemable to LOVE. ### Liquidity Bonds Liquidity bonds are LP token bonds. For example LOVE-BUSD LP bonds. ### PCV Protocol Controlled Value is the amount of funds the treasury owns and controls. The more PCV the better for the protocol and its users. ### POL Protocol Owned Liquidity is the amount of LP the treasury owns and controls. The more POL the better for the protocol and its users. ### PoR Proof of Reserve is the mechanism of strengthening the reserve of HunnyDAO treasury via the sales of bonds. Bonders provide liquidity to the treasury, thereby building its reserve. In return for their service, bonders get paid in LOVE tokens. ### Reserve Bonds Reserve bonds are single asset bonds. They are sometimes referred to as "naked" bonds. Examples are BUSD bonds and BNB bonds. ### Reward Rate Reward rate is the configured percentage of LOVE distributed to all stakers on each rebase relative to the total supply. The reward rate is precisely set by the policy team. ### **Reward Yield** Reward yield refers to the actual amount of LOVE received by each staker on each rebase. The reward yield is a rough target from a policy point of view. It can almost never be maintained precisely due to the fluctuating amounts of LOVE staked. ### TVL Total Value Locked is the dollar amount of all LOVE staked in the protocol. This metric is often used as a growth or health indicator in a DeFi project. ### TaaS Treasury as a Service is the business model of decentralized custody of partnership funds. HunnyDAO is designed for TaaS by selling bonds and absorbing partners' liquidity into its treasury as a result. ### Vesting Period The Vesting Period is a measure of the time required for a bond to be fully redeemed.