Hi everyone!
Here is some info about Gaia, let us know if you have any enquiries:
Gaia
Decentralised application incentivising and coordinating private capital flow toward impact investments.
Vision
We strive towards a regenerative financial system where planet preservation is financially rewarding.
People’s lives and Earth’s ecosystems are at an increasing risk of catastrophe if nations fail to reduce carbon emissions in the upcoming years. We believe social and environmental impact should be at the forefront of investors’ minds. There is a rising trend in sustainability and impact investing in traditional finance, but a lack of such opportunities in decentralized finance.
Problem
According to the World Economic Forum (WEF), the climate crisis is the consequence of a global coordination problem. The main failures come from the inefficiency to coordinate policies and capital investment into the commitments necessary to address the most pressing threat to humanity.
Accelerated action is needed to avoid more significant loss of life, livelihood, and biodiversity.
Solution
The following quotes are from an article published by the WEF: How Web3 could help tackle climate change using regenerative finance - or ‘ReFi’, Sep 21, 2022.
“Web3 climate tools and services share values inherent to ReFi and are foundational to the scale of global coordination needed to tackle climate change.”
“As greater interest and research, as well as robust policy, is invested into the ReFi space, the more effective the incentive for individuals and businesses to take care of the planet.”
“The emergence of Web3 technology, values and ideas inherent to the ReFi movement can mobilize capital to fund the climate crisis solutions […] within the time and at the scale required to fulfil the Paris Climate Accord’s global commitments.”
Gaia incentivizes and coordinates capital flow toward impact investments that address the most pressing threats to humanity while providing returns to token holders.
The main cornerstone of Gaia is the Treasury, a sustainable fund dedicated to generating both returns and positive externalities for our planet. The Treasury is built through users depositing assets in exchange for our token, $GAIA, as well as benefiting from the performance of its own investments.
Gaia makes impact investing opportunities more attractive in two main ways:
-
Partially dissociating the value of the impact fund with the value users hold. This allows for greater potential returns for holders.
-
Limiting the downside risk for holders by backing each token with the Treasury assets. This is achieved thanks to the Backing Price which implies a minimum price per $GAIA token.
Product Overview
There are 2 options available to users:
- Deposit using Gaia’s Decentralized Application (DApp)
→ Grow Gaia’s Treasury by exchanging your crypto assets for $GAIA tokens at a discount on the current spot price.
Although depositing grants you a discount, you can only redeem your discounted $GAIA tokens periodically over a period of five days.
Example:
- Directly after depositing, you will not be able to claim any $GAIA.
- 2 days after your deposit, 40% of your $GAIA tokens will be claimable.
- 4 days after your deposit, 80% of your $GAIA tokens will be claimable.
- At the end of the 5-day period, you will have been able to claim 100% of your $GAIA tokens.
Deposits are pooled together and form the treasury which allows $GAIA tokens to have a backing price.
The ability to deposit may be limited when the $GAIA token’s price approaches the backing price (this mechanism is explained in the “Tokenomics” section).
Where to start?
On the Gaia DApp, you can view the different crypto assets you can deposit under the “Deposit” section.
Step-by-step Depositing Tutorial:
- Make sure you have the crypto you wish to deposit in your wallet
- Connect your wallet to the App
- Go to the “Deposit” section
- Select the crypto asset you wish to deposit
- If it is the first time you are depositing this crypto, you will need to approve the deposit
- Once approved, enter the amount you wish to deposit
- Click on the “Deposit Now” button
- Confirm the transaction on your wallet
- Reconnect to the DApp to claim your $GAIA tokens as they are distributed over the 5-day vesting period
Where can I see my Deposit’s Return On Investment (ROI)?
The ROI is shown under the price at which you purchase the discounted $GAIA tokens. You can also see the discounted price you are exchanging your assets for and compare this to the current market price.
Advantages:
- Receive $GAIA tokens at a discount
- Scale the protocol’s ability to make impact investments and decrease the downside risk for all holders
Disadvantage:
Having to wait for your $GAIA tokens to be fully distributed over the 5-day vesting period in order to sell. This exposes users to the risk of market price volatility.
- Buying $GAIA on the spot market
→ You are free to buy and sell $GAIA tokens on exchanges.
This enables you to benefit from the price action of the token without it affecting the Treasury’s investments (except for selling at the backing price, which would force the Treasury to buy back $GAIA until it reaches the backing price again).
Advantage:
- Trading opportunities for both the short and long term.
Disadvantage:
- You purchase $GAIA at the spot price and therefore do not benefit from depositing discounts.
The Treasury
What is the Treasury’s role?
The Treasury is the driving force behind the appreciation of $GAIA tokens as it ensures the backing price. It is also the originator of all positive externalities Gaia delivers. The Treasury is a pool of capital invested strategically to maximize impact and revenues, intrinsically increasing the value of GAIA tokens through time.
The value of the Treasury accrues in 2 ways:
- Its investments
- Deposits from App users
How will the Treasury be invested?
Gaia will be investing treasury funds into assets and projects that have a positive impact on our planet. We are continuously looking for investment opportunities that provide an attractive risk-adjusted return while actively contributing to the well-being of our planet
These are the four main sectors Gaia will invest in:
Gaia will not simply follow an ESG investing strategy but rather a thematic impact investing approach focused on supporting maximum-impact solutions.
In the initial phases, the Treasury will consist mostly of cryptocurrencies until the total asset under management is significant enough to make impact investments. The Treasury will have made its first impact investment before it reaches $200,000.
Example of an off-chain Treasury investment:
One of our first potential ventures is to invest in carbon offset projects through the Sequestr platform. Through Sequestr, we will connect with landowners, farmers, project developers, & offset buyers to fund and launch carbon sequestration projects. Our treasury would then be composed of structured products as well as crypto assets. Our investments will be both off-chain and on-chain. This would help us dissociate from crypto market price movements and thus, bear markets.
Gaia would buy a set number of carbon credits, representing a percentage of the projected offsets of a chosen carbon offset project. If the offsets generated are below projections, we will still get the number of credits we purchased no matter what. However, if the offsets exceed projections, we will get the % of the project we own.
For example:
- A project is estimated to generate 1,000T of offsets over 20 years for a total of 20,000 offsets. We purchase 10,000T offsets upfront representing 500 annually or 50% of the project.
- In year 1, the project generates 800 offsets, which is under projections so we get the floor of 500 offsets
- In year 2, the project generates 1200 offsets, which is above projections so we get 50% which is 600 offsets
- In year 3, the project only generates 400 offsets, we get all 400 offsets and are owed 100 offsets from the next year
Gaia will therefore be paid in carbon credits and start generating revenue from real-world assets. We would also benefit from the price appreciation of these carbon credits throughout time. Additionally, to further increase protocol revenue and help raise the price of carbon credits we could eventually deposit these credits into the Klima protocol.
Tokenomics
Backing Price
The $GAIA token has a free-floating value with an intrinsic backing price that its community can always fall back on. This intrinsic backing price will increase over time thanks to the Deposit mechanism and the proliferation of treasury investments.
Backing Price Calculation: Total Value in $ of the Treasury$GAIA Supply
$GAIA Supply: The number of $GAIA tokens that are publicly available and circulating in the market.
This backing price is guaranteed through treasury buybacks. The buyback process deploys assets from the Treasury to buy $GAIA tokens on the spot market and then immediately burns them. This mechanism is initiated whenever $GAIA’s market price falls below the backing price. These buybacks will inevitably make the price go back up, and will continue to do so until it has returned to the backing price. The downside risk is therefore limited.
In another scenario, let’s imagine the market price is at the backing price and the Treasury increases in size through deposits or the proliferation of its investments. Even if there are no buyers on exchanges, the price of $GAIA would still increase thanks to the Treasury’s buybacks.
Example: A user has $GAIA tokens in his wallet which are worth $10 and the backing price is currently at $10. The Treasury grows in size thanks to positive returns on its investments and the backing price is now $11. Buybacks will then immediately happen, so even if there is no buying pressure, his $GAIA tokens increased in value by 10% and are now worth 11$.
Even if every holder decides to sell their $GAIA tokens, similar to a bank run, the very last person to sell will still be able to redeem the backing price for his tokens.
This also creates a virtuous cycle since this removes almost all incentives to sell if the price is close to the backing price.
Potential for Price Discovery
On top of the downside risk being limited, GAIA has a free-floating value. Since the token value isn’t pegged to the Treasury, it allows for price discovery on the spot market.
This mechanism allows for greater potential returns than if the value was pegged to the treasury. For example, if the treasury’s assets increase by 10% over a period of time, $GAIA tokens could increase by much more than 10% if there is strong buying pressure on spot markets. On the flip side, even if there is substantial selling pressure on the $GAIA token, the price cannot go below the backing price.
Example: $GAIA is trading at $11 and the backing price is at $10. There is bearish news in the markets and a selloff takes place, normally reducing the token price by 30%. Thanks to the Treasury’s assets, the maximum downside of $GAIA tokens is 9.09%. Once $GAIA reaches the backing price, the only possible downside for holders is if the Treasury’s assets decrease in value thus reducing the backing price. The team will be carefully managing treasury assets with a high level of risk adversity to avoid negative returns.
Limiting Deposits:
When the $GAIA token approaches the backing price, it is more beneficial to incentivize token price appreciation rather than Treasury growth. This is because further selling pressure will result in $GAIA’s price reaching the backing price, and thus, Treasury funds being deployed to buy back tokens, inevitably reducing the Treasury’s size.
In order to avoid this additional selling pressure, the ability to deposit will be limited. This is done to stop extra $GAIA tokens from being created, which means users will not be able to deposit just to benefit from the discount and immediately sell their newly created tokens.
Protocol Owned Liquidity:
We call our own liquidity POL (Protocol Owned Liquidity). More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Through time, the protocol accrues more revenue from LP rewards, further increasing liquidity.
The Team
Our core team is currently anonymous, born from the DeFi Community.
We have shared personal details with AssureDeFi and Gaia has been KYC’d.
You can check out our KYC NFT on AssureDeFi’s website.
Core Team:
Chaos
Twitter: 1st_Protogenoi
Pontus
Twitter: God_Pontus
Aether
Twitter: Aether_ReFi
We also have a team of developers assisting in decision-making and further improving the protocol.
** FAQ**
Why have a free-floating value/price discovery, and not just be a regular fund?
In a16z’s (major VC fund) “2022 State of Crypto Report” (May 17, 2022), they explain why price discovery is essential in cryptocurrencies:
“Prices are a hook. The numbers drive interest, which drives ideas and activity, which in turn drives innovation. We call this feedback loop “the price-innovation cycle”, and it has been the engine that has propelled the industry through multiple distinct waves since Bitcoin’s inception in 2009”.
As previously stated, price discovery allows for greater potential returns for holders than if the value was pegged to the treasury.
Do holders receive more $GAIA tokens by simply holding them?
$GAIA holders do not receive more tokens by simply holding them. The only way more $GAIA tokens are created is through depositing, but this mechanism also increases the Treasury’s value. A “healthy”, balanced ratio of new supply to Treasury growth will be achieved by limiting the discount percentage and limiting the ability to deposit.
Are there $GAIA tokens in the Treasury?
No, there will never be $GAIA tokens in the Treasury. This would inflate the backing price with our own native token, causing unrealistic Treasury and backing price valuations.
Our Ask
We have bootstrapped all expenses so far. No VCs here.
We humbly ask for 8500 DAI split equally between bootstrapping liquidity and covering marketing costs to help us launch effectively to build up the momentum needed to be financially independent thanks to our fees.
Additional Links
Website (COMING SOON)
Github (REPOS GOING PUBLIC SOON)
Twitter
https://twitter.com/Gaia_ReFi
Discord