Thread by @GoolagCrypto

🧵On @templedao for my fellow Templars as well as friends @scribeDAO

TL:DR; TempleDAO is creating the middle ground between insanely speculative tokens and stablecoins by providing a safe haven that reduces volatility, but still provides significant yield on your assets

As always this is NOT FINANCIAL ADVICE, but rather my OWN OPINIONS on TempleDAO and the brilliance of what they're trying to achieve.

I recommend all to DYOR by following their twitter @templedao, joining their discord, and reading their medium posts etc.

🅰️Problem statement

You can broadly sort crypto assets into two buckets

Protocol tokens and stablecoins (e.g. TOKE and USDC)

These two extremes represent for the former an extremely volatile asset and the latter an asset that, pegged to USD, loses real value every year

🅰️cont

Common sense would suggest that the risk profile from a basket of just those two types of assets is probably not optimal and not what's right for all crypto market participants

Thereby there is a need for a variety of possibilities between those extremes

🅱️Current solutions

You could use stablecoins (lose value) or derivatives

We already discussed stablecoins, but leveraging derivatives is out of reach for most retail investors as they are priced out from high gas cost and low liquidity in derivative markets

1⃣ Creating the Temple

The goal of TempleDAO is to curate a range of unique investment pools between those extremes to manage risk profiles

Consider it being like an LP at a fund, so investments are managed for you based on desired risk/return profile

2⃣ Discovering faith

Let's consider $TEMPLE, a reflection of the Temple ecosystem and their first token, as a case study on how TempleDAO will provide sophisticated risk strategies by reducing volatility and rewarding long-term stakeholders

3⃣ Understanding faith

$TEMPLE is designed with 3 guiding principles

1. Ecosystem growth benefits holders

2. Protocol reduces volatility and rewards long term holders

3. Intrinsic value always increases and is not diluted (no excessive inflation)

3⃣ cont

To achieve these guiding principles in the token design, there are four mechanisms which $TEMPLE utilizes to create a top-tier risk-management strategy for holders

I. Safe Harvest & intrinsic value
II. Safe premium
III. Bonus offers
IV. Unstake queue & price defend

3⃣ I. Safe Harvest & Intrinsic Value

IV is defined as total reserves / total supply

Safe Harvest is the a mechanism that ensures the IV of $Temple is not diluted

Conceptually, the protocol incentivizes purchase of $TEMPLE from TempleDAO OTC by providing a fixed price

3⃣ I. cont

Purchasing OTC, at a multiple to IV, gives those funds to the DAO thereby increasing reserves

Remembering principle 3, we cannot dilute the IV of $TEMPLE and thus the DAO only mints tokens (increase supply) in proportion to reserves to manage inflation/dilution

3⃣ I. cont

Minting the entire increase in reserves would leave IV flat, and so the entire "harvest" is not given out to maintain increases in IV

With "Safe Harvest" IV continually increases avoiding sell pressure/dilution/volatility from hyperissuance fulfilling all principles

3⃣ II. Safe Premium

Safe premium is a price ceiling on $TEMPLE

As mentioned before, $TEMPLE can be purchased from the DAO at a multiple to IV which will be 3-6x, and so why purchase from an AMM unless it was somehow below that multiple?

This is how the price ceiling is made

3⃣ II. cont

How does the price ceiling fulfill the guiding principles?

This again reinforces OTC, rather than AMM, purchasing increasing reserves to grow the ecosystem, increasing IV sustainably, and managing volatility

3⃣ III. Bonus offers

Bonus offers are simply a mechanism where if Safe Harvest rewards are in excess than additional rewards are offered for some time

This promotes principle 1 by transferring excess growth in the ecosystem to $TEMPLE holders

3⃣ IV. Unstake Queue and Temple Defend

For a given block only a certain amount of $TEMPLE can be unstaked based on a priority queue

Thus Unstake Queue reduces volatilty and excessive runs up or down in price by limiting capital flight from $TEMPLE

3⃣ IV. cont

Temple Defend is a mechanism where if AMM pushes $TEMPLE price too low holders are given a right to buy on an AMM and sell it to TempleDAO at a price near IV

Or you could hold your cheaper $TEMPLE and let it compound

This sets a price floor on $TEMPLE at IV

3⃣ IV cont

Like with the other mechanisms Temple Defend and Unstake Queue ensure that IV never decreases, there is stability in the protocol, and growth is transferred to holders through means of compounding rewards to long-term holders

4⃣ Benefits of prayer

Remember the motto of TempleDAO is sustainable levels of high yield with reduced volatilty

All four mechanisms above ensure that volatility of $TEMPLE is minimized and grows continually at a sustainable pace

This provides the middle ground of risk/return

4⃣ cont.

This is great, but lets spell out why we would want to buy and hold $TEMPLE

1. Underlying price appreciation through continual IV increase/management

2. Reduced volatility through mechanisms

3. Compounded value through staking rewards

4. Access to future products

5⃣ Interpreting faith

Lets answer some glaring questions we may have and consider ancillary benefits that membership to TempleDAO has beyond the risk/reward management value that the initial $TEMPLE toke develops

5⃣ Community

Join the discord in a few minutes your brain will melt from all the trolling. Everyone is engaged in the community and it's very tight knit with great memes

If you can't handle people having some fun at your expense don't join, but I love it

5⃣ Team and values

If you feel like TempleDAO has a very "by the people for the people" vibe you'd be write. The DAO exhibits the ethos of crypto with their attempt to create wealth for the masses

A team of individuals brought together on their own with NO VC funding

Fantastic

5⃣ Why would I want a price ceiling?

Understandably you'd ask the value of a price ceiling on an asset you want to appreciate

Well the price ceiling increases reserves, but also prevent runaway growth/inflation which is what makes TempleDAO a sustainable growth protocol

6⃣ Conclusion

TempleDAO is a community-led initiative providing sustainable risk-adjusted growth that will led to real wealth creation for participants

Learn more from @templedao and read templedao.medium.com to understand more about their whitelist process and roadmap