---
# System prepended metadata

title: AAA Tokenomics by LTF

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# AAA Tokenomics by LTF

## AAAims

AAA strives to be a decentralized network that connects festival promoters to fans in an integrated social-fi economy. At the very heart of AAA, we want to solve financing issues that independant promoters face by providing them access to affordable capital, so they curate and reserve their best "money-can't-buy" experiences for the AAA fan community.

**Key Objectives:**
* Provide Creators with access to affordable capital
* Reduce the risk of capital allocation through: 
    * A verified user network 
    * Decentralised credit rating system
    * Incentivising community engagement in fundraising
    * Escrowing Creator revenue until full loan repayment
    * Leveraging future yield in open finance vehicles
* Use generative NFTickets to innovate the ticketing industry while increasing the lifetime value of fans
* Provide host of digital campaign tools for promoters to market, mobilize and scale their efforts
* POS for onsite fan purchases i.e. F&B, merchandise, etc.

## The StrAAAtegy

Innovating and disrupting the creator economy requires us to tackle the industry in a simultaneous top-down/bottom-up approach. We achieve this by being the on-stop-shop for funding and generative ticketing, as well as a host of tools to prolong fan engagement and expand promoter reach. 

Providing affordable capital allows AAA to build long term relationships with promoters, encouraging them to invest and govern the AAA ecosystem, while providing fans with even better experiences. 

In order to achieve our dream of supplying the creator community with a sustainable, healthy and profitable ecosystem worth participating in we have analysed the best and most battle-tested decentralised protocols, ecosystems and tokenomics currently in existence. 

We needed a token ecosystem to be so engaging to rally around, incentivise and reward all participants while irrevocably binding them into the overall success of the community - that any outside entity would eventually be faced with the choice to join or risk becoming obsolete. 

And thus, $AAA was born. 

## The RESERVE ASSET for the experience economy 

The **All-Access-Anonymous** system is taking inspiration from [OlympusDAO](https://www.olympusdao.finance/), [Frax](https://frax.finance/) and [Alchemix](https://alchemix.fi/) that have shown that the following 3 ideas work in Defi. 

1. Frax has shown that fractional algorithmic algorithmic stablecoins can work and are successful at maintaining the peg.
2. OlympusDAO & KlimaDAO showcase the benefits of bonding and protocol-owned assets, yet lack crypto independent revenue streams. 
3. Alchemix introduced us to non-liquidatable and self-repaying loans. 

What if we could take the foundations of Olympus to create liquidity, backed by a reserve asset, leading the way on how a community can utilize a DAO?   

What if this protocol also had a in-house borrowing and lending protocol based on its own stablecoin collateralized to the protocol's very own native asset, to fund vendors and proprietors in the concert venue space? 

What if we utilise Terra Luna's weighting system, controlled in part by a PID controller to create a decentralised credit rating system to reduce the risk of decentralised and undercollaterized lending & borrowing?  

What if AAA had a trailblazing new methodology on inverse bonds, creating a pegged stablecoin for its protocol that can be used by anyone?  

What if all of this had two complementary parts: On the backend, the BAAANK - a reserve asset protocol, plus a frontend NFT platform using that liquidity-backed hybrid stablecoin for mints and tokenomics?  

We envision all of these things for All Access Anonymous(AAA).  AAA is a new way for concert promoters to enable new experiences for concertgoers, using blockchain technology.  This is not just another Olympus fork.  This is completely its own kind of protocol.  This protocol redefines its native token as a reserve asset, not just a currency.   

## Which Ohm to Fork or Spork?? Ghostly intentions..

With all the amount of forking that went on around Olympus it's hard to know  what actually was really worth it or what was just trying to cash in!?

However, one protocol in particular did emerge with some very new features and components to make it stand out.  

[FantOhm](https://fantohm.gitbook.io/documentation/ecosystem/equations)

By bringing in new concepts like Proof of Burn and FHUD which is now being phased out and redeemed for USDB the proprietary stable coin for the protocol, FantOhm has ushered in a new type of protocol better able to manage their idle stables inside its treasury.  

This is very exciting for collateral assets.  $AAAUSD is generated, backed, and kept stable through collateral assets that are deposited into $AAA treasury on the AAA Protocol. A collateral asset is a digital asset that DAAAO members have voted to accept into the Protocol.

## The All-Access-Anonymous <> Reserve Asset Love Story. 

Every economy requires a central bank and rather than binding the monetary medium of exchange to a fixed token supply as the majority of crypto economies have decided to do. We understand the need for an elastic supply which provides the DAAAO with a variety of monetary policy tools. 
The AAA token is a reserve asset, backed by a selection of stablecoins bonded or deposited into the treasury through revenue generating strategies. Further reserve assets may be voted in by the DAAAO and can include, liquidity pairs as well as more volatile asssets. 
The selection of stablecoins will provide the intrinsic and risk-free value that the protocol accrues over time and can be used to collaterise our in-house stablecoin ($AAAUSD) in times of volatility. Additional sources of income from the NFTicketing platform and loans handed out by the DAAAO will eventually flow towards the risk-free backing of the protocol, they will contribute more to the speculative and extrinsic value of the protocol. 
We envision a future where all participants of our community will collectively govern over the monetary policies of the DAAAO. A future in which $AAA will be the reserve currency of choice for the experience economy, adjusting to fit the needs and requirements of the community that best serve them. The reserve currency to power the next wave of human creativity. 

## Stable x All-Access = $AAAUSD

In order to monetise and activate the illiquid supply of AAA in the treasury, without selling $AAA or affecting the TVL of the protocol, AAA will introduce its own stablecoin to the economy. $AAAUSD will further allow us to utilise the collection of stablecoins that the treasury has accrued via bonding and profitable strategies, which would otherwise just sit and hold value and be non-productive. 

In order to mint $AAAUSD, AAA will use a novel proof-of-burn mechanism to issue its stable-coin pegged to the value of $1. Proof-of-burn is similar in fashion to Luna's Terra seignorage stablecoin, which is minted when Luna is burned and can be redeemed for Luna natively. The basic burn mechanism is very similar to Lunas, however being a reserve asset protocol we also benefit from being able to collaterise $AAAUSD with the risk-free value locked in the treasury as well as a native redemption mechanism for $AAA itself. We can mint $AAAUSD at $1 to every $1 dollar of AAA.  So if the price of AAA is $10 dollars and has 10 million $AAA in the treasury, then it can easily mint $10 million AAAUSD and only burn 1 million AAA, creating a receipt for the burn by minting the tokens.  Users can then use these on the secondary market to purchase new assets and offer new bonds back to the protocol.  The DAAAO must also approve specific, corresponding Risk Parameters for each accepted collateral (e.g., more stable assets might get more lenient Risk Parameters, while more risky assets could get stricter Risk Parameters). Detailed information on Risk Parameters is below. These and other decisions of The DAAAO are made through the AAA decentralized governance process.
 
These mechanisms combined with a fast paced adoption by both crypto yield seeking natives and our community will allow $AAAUSD to quickly gain confidence. To ensure ample liquidity, attractive bonds will be offered to encourage the bonding of $AAAUSD-Stablecoin luiquidity positions to our protocol. 

Beyond providing the DAAAO with a new monetary tool and a strong deflationary driver to $AAA, we will work towards introducing $AAAUSD to our community and incentivise payments within our ecosystem of promoters, vendors, fans & the NFT marketplace. 
Adoption of THE BAAANK and retaining value within our ecosystem can be incentivised by offering attractive yields for both long & short term bonding of reserve assets to the treasury. 

## A Reserve Currency vs A Reserve Asset

As a protocol AAA will function as a reserve asset, where the intrinsic value of the token is continually increased. Starting at $1 per token intrinsic value - over time that value should increase as the intrinsic value is used productivly. In this aspect it differs from reserve currencies, as they seek to maintain intrinisc value while inflating token supply to reach the necessary liquidity and stability to act as a reserve currency. 

![](https://i.imgur.com/ByeyxJ5.png)

Introducing an asset with native and productive intrinsic value, we can use this to partially collaterise our stable-coin while also increasing revenue the protocol generates by utilising its intrinsic value. 

Inverse bonds allow us to set parameters, based on the PID controller to define the optimum circumstances when inverse bonds should be unlocked to allow the redemtion of $AAAUSD for intrinsic value rather than $AAA itself. This security measure will only come into effect, if and when a seignorage model of redemtion, i.e. $AAAUSD to $AAA has been exhausted or threatens the entire system. 

Issuing $AAAUSD, allows the protocol to grow the intrinisc and extrinsic value of $AAA, while using it's native stablecoin to fullfil all the requirements of a currency in the system. 


### Using game theory and control theory to address investor security

Introducing the mechanisms above, while benefitting from external revenue backed by real world brands, is how All-Access-Anonymous will distinguish itself from other reserve currency systems. 

It is to be noted that the unfortunate reality of Olympus is: most people that use the protocol don’t actually understand how it works.  This is not the fault of Olympus, but the result of lack of education on the protocol and blockchain space itself.  This space moves very fast, and people need time to adapt. As speculators and retail FOMO, it is hard to actually take the time to understand what is the  mechanism to how these systems work.  

Three problems that AAA will look to address using game theory with it’s reserve asset approach are as follows:


**Problem 1. Offer Insurance: guarantee minimum payments**

Those who will use the protocol will understand that AAA shouldn’t drop below the risk-free-value (of stable coins). 

**Problem 2. Explicit guarantees**

(“Buy $AAA and purchase insurance that guarantees price at purchase), while simple in design, could also improve perception among the general population. The premiums could be written by the protocol itself; or AAA could allow enterprising individuals to offer such services for a more efficient market mechanism.


**Problem 3. Subordinate risks via tiering of investor groups**

In the traditional finance world, debt holders have the priority claim over equity holders. Such explicit mechanisms allow investors with varied risk appetite to become providers of capital to enterprises.

A simple way of achieving such a mechanism is this: have different tiers of APY (i.e. yield) based on lock-up periods. Those wanting to have flexibility to sell should be prepared to sacrifice APY for having a chance to exit before a larger group of investors. Could the awareness that you could sell before a large group of investors lessen sell-pressure and minimize herd mentality?

**Bonus Problem. Investor Education: on-chain analytics**

Allow investment into AAAOhm after analysis of the risk. Those who are ignorant could be made aware of the risks beforehand, much like how risk profiling works in the real world. This is an attractive proposition, and it remains one of the best options for minimizing volatility and any resentment arising from lack of awareness.  It also is very important that we work together to further educate the community on how these systems work and why.  


## How AAA can apply the Terra Weight Formula to help mitigate the borrow and lending

In the [Terra whitepaper](https://assets.website-files.com/611153e7af981472d8da199c/618b02d13e938ae1f8ad1e45_Terra_White_paper.pdf) the following equation is proposed for adjusting the weight on a dApp (used to calculate the funding and a approval score that the dApp receives
at time $t$:

$$w_t = (1-\lambda)TV_t^* + \lambda\displaystyle\frac{\Delta TV_t^*}{F_{t-1}^*}$$

In this equation we have 

* The $*$ operator indicates a moving average over some time period (our choice)
* $t$ represents the current time
* $TV$ is **transaction volume**
* $F$ is **funding amount**
* $\lambda$ represents a weight (which is up to us)

We can understand this equation by breaking it up into two parts:

* **Current Economic Activity**. This is the $TV_t^*$ term, averaging the transaction value over our agreed-upon time period. This represents capital intake of the investor. This gives the **current position** of the project.

* **Trend of Capital Efficiency**. This is the $\displaystyle\frac{\Delta TV_t^*}{F_{t-1}^*}$ term. It gives the change in (moving average of) economic activity between this timestep and the previous timestep, divided by the average value of the funding into the project. It gives a **trend** for the project it's changing relative to the funds that have been invested in it; we can think of it as analogous to **velocity**.

* **Weight** The $\lambda$ parameter gives **our value** of how much we care about **current position** vs. **trend**. 

* When $\lambda$ is close to 1, we will give more funds to projects which are showing rapid growth in their relative returns, even if they are small.

* When $\lambda$ is close to 0, we will give more funds to projects that are have high transaction volume, even if they aren't showing much growth.

## Possibilities for AAA

At the moment this system uses two signals (Transaction Volume and Funding) and one parameter $\lambda$ to calculate the weights. While the system discussed above works well for its intended purpose, there are many ways we could modify the system to take advantage of other signals.

1. Make the parameter $\lambda$ adjustable. If the constant parameter $\lambda$ becomes $\lambda_t$ that changes in response to information, this could adjust the performance of the system. Which would give *AAA* a real time ability to adjust to the markets and vendor needs.  

2. We can apply any increasing convex the second term to adapt to unit mismatch.  This would apply to a CDP (collaterlized debt position) where over collateralization is needed.  

3. Add more signals as new data is applied to the system.  This is effectively a PID controller for AAA.  It will allow them to operate on very proven system of control to facilitate Vendor lending and borrowing.  A "credit score" can be applied just as Terra ranks its dAPPS for approval from the DAAAO. 

In addition to using ideas from Control Theory to adapt weights for funding decisions based on capital efficiency throughout a project's history, we can also incorporate a logistic model to account for the other attrbutes of a project.

## Logistic Regression for AAA


![](https://i.imgur.com/mb6MvTB.png)

Logistic Regression models are classification models; specifically binary classification models (they can only be used to distinguish between 2 different categories — like if the price of $AAA is above it's backing or below, or if a NFT ticket sales are over margin or under). **This means that our data has two kinds of observations** (Category 1 and Category 2 observations) like we can observe in the figure. However, the logic of a logistic function can also be adapted to place projects into **any number** of classes that increase in value.

**Note:** *This is a very simple example of Logistic Regression, in practice much harder problems can be solved using these models, using a wide range of features and not just a single one.*

**Secondly**, as we can see, the Y-axis goes from 0 to 1. This is because the sigmoid function always takes as maximum and minimum these two values, and this fits very well our goal of classifying samples in two different categories. By computing the sigmoid function of X (that is a weighted sum of the input features, just like in Linear Regression), we get a probability (between 0 and 1 obviously) of an observation belonging to one of the two categories.

The formula for the sigmoid function is the following:

![](https://i.imgur.com/NMHC1qp.gif)



If we wanted to predict the increase of price of $AAA but not given the current price, we would first compute a weighted sum of the previous prices  and then input this into the sigmoid function:

**1) Calculate weighted sum of inputs**

 $x = \Theta \cdot \text{price} + b$

*So probability of price increase would be* 

$y=a\cdot\left(\frac{x\ -b}{\sqrt{c+\left(x\ -\ b\right)^{2}}}\ +\ 1\right)$

### Example of inflated price increase
<iframe src="https://www.desmos.com/calculator/ayleuuugzk?embed" width="500" height="500" style="border: 1px solid #ccc" frameborder=0></iframe>



The model above represents a multi sigmoid bonding curve comparing two different price points. 

The top curve is the inflated price supply of the token.  The bottom is the reserve ratio or actual liquidity in the supply to the overall total supply on X axis.  The Y axis represents price.  The beauty of sigmoid curves is they have the best approach to time when bonding curves themselves don't actually apply to time as a measurement. **AAA** will be modelling its protocol to adjust its inflation and minting [pAAA](https://olympusdao.medium.com/what-is-poh-16b2c38a6cd6) based off of it's rise in marketcap of $AAA over the time of the protocol itself.  This way it can better manage the reserve of AAA itself and offer investors a percentage of pAAA it minted to be allocated back into the protocol. This also is important to LAAABS and the team itself. Controlling inflation is key.  

This is yet another major difference and improvement on the Olympus standard. It is also possible to use other available data about the project (e.g. Twitter followers) as input "I'm in a logistic model."


## Control System for AAA

The basic idea behind a [PID controller](https://en.wikipedia.org/wiki/PID_controller) is to read a sensor, then compute the desired actuator output by calculating proportional, integral, and derivative responses and summing those three components to compute the output. Before we start to define the parameters of a PID controller for AAA, we shall see what a closed loop system is and some of the terminologies associated with it.

![](https://i.imgur.com/nMDrx6R.png)

**Proportional Response**

The proportional component depends only on the difference between the set point and the process variable. This difference is referred to as the Error term. The proportional gain (Kc) determines the ratio of output response to the error signal. For instance, if the error term has a magnitude of 10, a proportional gain of 5 would produce a proportional response of 50. In general, increasing the proportional gain will increase the speed of the control system response. However, if the proportional gain is too large, the process variable will begin to oscillate. If Kc is increased further, the oscillations will become larger and the system will become unstable and may even oscillate out of control.

Think of it like this, 

Proportional Gain is inflation of the supply of AAA.

The set point is the price of AAA ( 1 AAA = 1 $ ) 
 The process variable is the rise of the price of AAA ( 1 AAA > 1$ )


**Integral Response**

The integral component sums the error term over time. The result is that even a small error term will cause the integral component to increase slowly. The integral response will continually increase over time unless the error is zero, so the effect is to drive the Steady-State error to zero. Steady-State error is the final difference between the process variable and set point. A phenomenon called integral windup results when integral action saturates a controller without the controller driving the error signal toward zero.

Again this can represent the epoch of the Rebase function when the reserve asset is called.  



**Derivative Response**

The derivative component causes the output to decrease if the process variable is increasing rapidly. The derivative response is proportional to the rate of change of the process variable. Increasing the derivative time (Td) parameter will cause the control system to react more strongly to changes in the error term and will increase the speed of the overall control system response. Most practical control systems use very small derivative time (Td), because the Derivative Response is highly sensitive to noise in the process variable signal. If the sensor feedback signal is noisy or if the control loop rate is too slow, the derivative response can make the control system unstable

This can be thought of as yield returns or impractical yield returns causing noise. 


## What AAA can do with a PID Controller

By truly understanding all of the inputs and outputs of its protocol and how they function inside a controlled system uitlizing a closed feedback loop, AAA can safely operate said system without the fears of it becoming unstable.  

This gives them a very stong edge in managing systemic risk.  Calculating potential outcomes and addressing needs on a priority basis with a far greater accuracy and time management.  

You get a much better, closer output from your system compared to running it open loop.

The proportional term gets you a fixed percentage closer to your setpoint from the beginning.

The integral term closes the gap from the proportional term over time.

The derivative term responds rapidly to changes.

As a result, PID controllers are widely used in industry to keep some process on target, accurately, under changing conditions, which make them perfect for Defi and Open finance.  

<iframe frameborder="0" width="100%" height="100%" src="https://my.machinations.io/d/AAA-PID-Controller/8a231d5caf7411ec8c2902f943517e50" style="background-color: transparent; border-style: none; border-width: 0px; overflow: hidden;"></iframe>

## Sigma Levels & AAA

### 3 benefits of attending to sigma level 

Sigma level is often used as a way to understand the current quality capabilities of a process, how this level matches up with user expectations, where possible areas of improvement may reside, and as verification that a process improvement project has had the intended effects.
### Understanding your current process quality capabilities versus user expectations 

Remember that value is determined by the user of the protocol. Some processes can afford to have a lower sigma level, as the level of quality required by the user is not the highest. The user may not always be willing to invest in a protocol with the highest quality standards. Other processes, such as those that can affect lives, must be capable of reaching a much higher sigma level. Measuring sigma level helps you understand the current quality capabilities of a process, but it also requires a protocol to ask if this level is set at the right level for what the user is willing to invest, and for the safety requirements of the process. 
### Demonstrate lost capacity over time 

Low sigma levels can be a great place to investigate lost capacity over time. Each time a defect occurs, it becomes a non-value added drain to the organization. Significant costs in mismanagement of funding pools and bug exploits  during defect correction can occur. When sigma levels baseline values are extremely low, it can be a major cost savings opportunity to address. 
### Verify improvements achieved by process improvement efforts
 
If a process improvement event addresses a key quality issue of a process, there should be an incremental improvement in the sigma level of the process. Measure the sigma level prior to and after improvement are in place to verify that the improvements are improving quality as intended.

## The Sigma level represents the quality and capability goals of AAA for the long term

Sigma level is an easy-to-use approach that factors in the statistical shift of specification limits to match capability expectations with user expectations. This value is understood across all industries, and it’s important to monitor it to be sure the protocol maintains quality over time.

### The Six Sigma of AAA

Six Sigma has been defined in three ways:

**A** metric 
**A** methodology 
**A** philosophy

### The metric

Sigma can be defined as the standard deviation of a set of continuous data. Six Sigma would then be six standard deviations. In the context of a normal distribution, it would be the width of a normal distribution consisting of the mean plus and minus three standard deviations, which would encompass 99.73% of the data.

![](https://i.imgur.com/xe4Cc0o.png)


Six Sigma is also frequently used when talking about process capability. In this situation, a six sigma process is defined as one where the closest specification is six standard deviations away from the mean. This can also be defined as a process having only 3.4 defects per million opportunities, or DPMO.

![](https://i.imgur.com/kT9tk0t.png)


### Six Sigma AAA methodology
You often hear of a company deploying a Six Sigma effort. That means they’re trying to improve their organizational processes to achieve a high level of quality and performance. 
The Six Sigma methodology was developed in 1986 by Bill Smith, an engineer at Motorola. Subsequently, the methodology and concepts were adopted by Honeywell, Allied Signal, and GE. Many of the world’s best-known companies have tried or are currently implementing some version of Six Sigma. More recently, Six Sigma was combined with the concept and tools of lean manufacturing to form the Lean Six Sigma (LSS) approach to organizational improvement. 
The foundation of the Six Sigma methodology is based on a five-step process referred to as DMAIC (Define-Measure-Analyze-Improve-Control). The deployment of Six Sigma can range from a simple problem-solving approach to an organization-wide transformation. 

### Six Sigma AAA philosophy
While we have already defined Six Sigma as a measurement (or metric) as well as a methodology, it also can be defined as a continuous improvement management philosophy. The philosophy is based on the principles that all work can be defined as a process, all processes can be improved, variation should be reduced, and decisions should be fact-based and data-driven.

## SigmAAA & the PID

### Measure of variation
The standard deviation is a measure of your process variation. Since your goal is to reduce the variation of your processes, you will need to understand the causes of variation and strive to mitigate or eliminate those so you can reduce your process variation.
This is where a PID controller can be implemented and used very effectively.  

### Process capability
Deploying a Six Sigma with the use of a PID controller in AAA's protocol will be a big challenge. The understanding of all the moving parts of a Six Sigma deployment will be critical to achieving successful outcomes.  All of the controls necessary to understand how the PID controller effects the protocol are crucial and being able to build out and continuously monitor that system is critical.  AAA is very capable of doing so with a rigorous approach to the highest standards needed.  

## Marketcap unlocks and pAAA

AAA will be utilizing pAAA for a Liquidity Bootstrap Event to help jumpstart the treasury.  The vesting period will be determined through an optimized parameter tuning approach with input from stakeholders.  AAA will pre-mint pAAA and unlock pAAA as the marketcap of $AAA grows over time.  

pAAA will be used to incentivise promoters and the community to participate in the ecosystem. pAAA once bonded to the platform will require pre-defined staking periods. The londer the staking period of the now burnt pAAA is, the cheaper it is to redeem pAAA to the platform. 

As the marketcap and overal success of $AAA grows pAAA will be minted in a 1:10 fashion.  Where if the marketcap grows 100 million USD every year for that 100 million, 10 million pAAA will be unlocked for the protocol to use.  

$y = 10m \text{ pAAAOhm } \cdot \left\lfloor \displaystyle\frac{x}{100m USD} \right\rfloor$ 


<iframe src="https://www.desmos.com/calculator/xk9fdujnmy?embed" width="500" height="500" style="border: 1px solid #ccc" frameborder=0></iframe>

## Bonding as a service

OlympusDAO bought us a bond market for open finance and ushered in DeFi 2.0. Bonds allowed investors and speculators innovative ways to support and arbitrage the protocol through bonding reserve assets and liquidity pairs as well as creating new income streams through assisting partner protocols.

### Types of Bonds

- **Reserve Asset Bonds** Are paid for by creating token inflation and rewarding bonders in the native Protocol token, in Olympus’s case in $OHM in our case in $AAA.
    
    These bonds have the advantage of directly increasing treasury assets and rewarding stakers, as the protocol mints $OHM to pay the bonder in return for either liquidity positions or stable assets (MIM/DAI/UST to name a few) in return for increasing the protocol-owned-liquidity and risk-free holdings. 
    
    Stakers would receive a share of the tokens minted to reduce dilution of their pro-rata share of the protocol. A Win-Win one would think, however this only really works when there is a high demand for the native token and in the worst case would allow bonders to bond beneath market value, arbitrage and ultimately sell resulting in a cascading effect on the price of the token and discouraging other participants from bonding. 
    
    As $OHM is also a very speculative asset and in design should tend towards $1 in value, initial bond prices may quickly prove unprofitable in lieu of larger market movements and definitive sentiment changes. 
    
    As the protocol also always values $OHM at $1 DAI and bonds accordingly, it further reduced bond attractiveness, as the payout from staking (high APY’s on Olympus can be considered APY on its intrinsic value of $1 DAI rather than the backed value of the token). If enough people participate this may prove profitable, however for many and especially late entries this can be financially devastating. 
    
    However once a bonder has bonded stable assets or LP’s, these assets are put to work across the larger DeFi ecosystem generating additional yield and incremental income for the protocol and eliminating the need to pay high emissions to ‘yield farmers’ in return for mostly temporary liquidity. Owning its own liquidity allows the protocol to mostly guarantee its investors that they will always be able to cash out - a major factor in generating trust and confidence in early protocols. 
    
    Beyond these benefits, it also allows the protocol to deploy its assets and generate yield in the form of governance tokens of other protocols, resulting in the possibility to more actively participate and control the direction of these protocols. This simplifies governance and can result in more attractive yields in the future, providing and increasing protocol revenue. 
    
    *How do we seek to address the issues raised above and make the most out of the advantages?* 
    
    1. Bond at risk-free value of the protocol and allow the market to price in future income as well as value risk-on assets. Bonding at risk-free value will increase confidence that minimum financial guarantees are being met while reducing token inflation. 
        
        Bonding at risk free value reduces income generated by the protocol through bonds and subsequently yield to stakers, however this is subsidised by our main income streams (Loans & NFTicket Marketplace) which essentially bonders will be speculating on. 
        
    2. Minimum bond amounts
    3. Variable bonding yields for variable lock-up periods
        1. Governance can direct these - flywheel potential
    4. Variable bonding yields based on amount of $AAA staked incentivising participants to further support the project also allows protocols to build on top of AAA and acquire $AAA tokens - flywheel potential
    5. Convertible loan bonds - A bonder can decide to pay out part of the bond yield in stable interest and speculative interest. $AAA will be locked up for the duration, allowing us to burn $AAA to $AAAUSD and paying a hybrid bond. 
    6. Fees when bonding and flexible fee structure depending on $AAA staked. 
    
- **Launchpad Bonds** we reduce the risk of financing new events and creators by offering bonding-as-a-service to creators. Creators can decide to subsidise bonds with money-can’t-by experiences and exclusive NFT drops in addition to traditional yield. Launchpad bonds don’t inflate the overall supply of $AAA and dilute shareholders.
    - Creators can stake a part of their $wsAAA holdings to the bond to insure a minimum collateral in the case that the event is unsuccessful.
    - Users and fans can stake their $wsAAA to this event to further subsidise and provide insurance for this bond as well as receive money can’t buy experiences. (Similar in fashion to polkadots crowd-loan-offerings). Yield generated from the staking of $wsAAA will go towards financing the festival, the user receives ‘bribes’ from the promoters.
    - Launchpad bonds can take the form of Hybrid stable yields and speculative yields in the form of $AAA / $AAAUSD
    - Riskier investments can be counteracted by increasing protocol fees on the event promoter such as marketplace fees.
    - Escrow contracts to lock revenue of the promoters can be used as an insurance mechanism to control the funds until full loan repayment.
    - Upon governance vote, the DAAAO may subsidise loans with $wsAAA to additionally support early and new creators.

- **Loan reserve asset bonds -** Investors loan reserve assets over a given period of time. $AAA reinvests the assets into financing creators and by deploying them into open finance. Profits are shared with the treasury to increase backing and with investors. A reserve asset would also be $wsAAA which accrues value over time and can be borrowed against. Creating a self-repaying loan could provide the investors with a stable and predictable yield while providing additional income for the lending & borrowing module of $AAA. Loan bonds can provide flexible yield depending on the situation and could allow us to lock up additional value and potentially even create a flywheel mechanism for protocols to invest into $AAA to direct and control the yield generated. Basically double staking.
- **NFT bonds** - when a event / festival decides to drop a governance NFT that is independent of their NFTicketing they may utilise our bonding mechanism to reach the $AAA community while providing additional income to the protocol and benefitting from the SAAANDBOX & Creator Module.

## How does a Creator or a Vendor create a loan?

By applying to the protocol through an application process that will be configured off of the dynamics of the PID controller we stated earlier and uitlizing the innovation of Terra to define a scoring system and the funding to be delcared a Creator and/or Vendor can borrow against it's assets from AAA and promotes it's venue. 
![](https://i.imgur.com/8ZxkzFX.jpg)


## What about self paying loans for Vendors???

**AAA** plans to have **wsAAA** as the yield bearing asset.  So when Creators(Vendors) deposit **sAAA** as collateral into a vault, the loan can be considered a **self repaying loan**

![](https://i.imgur.com/7EQA25Z.jpg)


## Front End NFT Platform

**AAA** will be offering a seamless way for anyone to be involved in the experiance of concert going and blockchain by offering NFT tickets for concerts.  $AAAUSD will be the way all tickets are bought creating a demand for the protocols stablecoin and inherntly the need for more supply and furthing the dynamic of $AAA being the reserve asset for the entire protocol.  

Raving Rachel won't have to know or care how the mechanism works or what goes on in the background.  She will be able to purchase the tickets she wants to the venue of her choice and be able to take part in the reward systems that will be implemented.  

She will recieve her digital art ticket and or merchandise for the concert and get to take part in experiance.  A secondary market is going to be made availble on the platform that will allow Raving Rachel to sell her NFT to others who want to speculate on the art and generating fee's and royalities back to the creators, vendors, and the protocol itself.  


## Demand Drivers for $AAA

There are many reasons to gain from $AAA.  Many of them rely on staking and the benefits recieved from doing so and providing liquidity.  

The "credit approval rating" is greatly impacted by how much someone or an orgization is willing to stake and for how long.  

It will also allow them to incur lower MP, Lending and Borrowing fees as well as lower interest rates

You cannot participate in self paying loans without staking $AAA

You will be taking part in multiple reward systems by continously staking.  

You will be able to use $AAA to pay for transactions fees on the dedicated blockchain

The burn mechanism involving AAAUSD - $AAA has deflationary aspectss reducing supply and driving demand inherently

A mechanism involving additional token burns will be implemented where $AAA is burnt when combining NFTickets with additional traits

Stake a minimum amount of $AAA to be part of the verified network 

Tier based staking models which unlock additional value for Creators in the form of access to extended usability of the SAAANDBOX and Creator Modules

Stake $AAA to reduce dilution of $AAA tokens 

Participate in Governance of the $AAA ecosystem

Purchasing NFTickets on the marketplace will eventually only be possible with $AAAUSD, meaning that for each transaction $AAA will have to be burned and there will be an incentive to purchase and burn $AAA in return for $AAAUSD which can be bonded back into the protocol. 

Pay for transactions once the point-of-sale module is released.  










