Revised Dividend Strategy
It has been 2 months since we implemented our metrics-based dividend strategy and watched it play out.
Unfortunately, the market has been down since then and we didn’t hedge ourselves enough for that recent downtrend. But we are here to take responsibility and move forward.
We received many questions and proposals about our dividend strategy and decided to implement the following changes with clarifications:
There will be NO dividend pay-out unless the treasury increases above what it was during the previous dividend pay-out, in this case, $1.2m.
Don’t frown, keep reading!
Our treasury will be divided into the following four categories:
Stablecoin farms and rewards
Includes Stablecoins and generated yield
Includes liquid tokens held in the treasury with the aim to profit by price appreciation
Consists of illiquid tokens that are not tradable
An inventory of treasury-owned non-fungible tokens held for their appreciation, utility and staking
Weekly dividend calculations are different for each category:
1. Stablecoin farms and rewards
Returns are calculated weekly. Only realized profit is counted (e.g. selling the reward token)
2. Spot tokens
Every purchase price tracked and only realized gains counted for weekly dividends
3. Locked tokens
Excluded from all profit calculations. Included in overall treasury value.
Rewards sold as realized gains will be counted towards weekly dividends
Excluded from overall treasury value. Realized gains counts towards weekly dividends
What these changes resolve:
· Negative treasury loop. Treasury falls in one snapshot period. Market recovers in second snapshot period. The gain between both snapshots needs to be paid out regardless of whether the treasury has returned to pre pull back levels.
· Treasury growth no longer slowed significantly as long-term downtrends would not see treasury paying out dividends on each green week.
· Long spells of no returns for holders if treasury and market performance is negative week on week. (Stable yield always guarantees some level of return)
· Volatile tokens in the red do not have to be sold to pay out dividends.
· Tokens sold at a loss can be used to offset gains in category 2 and do not impact on stable coin dividends. (Creating a trading P&L)
The way back to previous levels
We changed the above just a little bit to reward our loyal community.
Given the market conditions we have revised the baseline threshold for dividend pay-outs. We will take yesterdays number of $543.194 as the new minimum value for the treasury to exceed to enable a dividend pay-out with the calculations explained above
This way $SCC holders (soon to be $WV holders) will be carried along on our way up to all time highs with a steady reward stream.
Additionally, the dividend pay-out threshold was lowered to from $25k to $15k.
The allocations are kept in the same ratio as illustrated in the graphic below, but might be adjusted in the coming weeks
We wish everyone a productive and successful week full of opportunity.