💬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. This incentivizes users to contribute capital towards impactful startups, resulting in more positive externalities.

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 bonding, 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 bond.

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.

How does Gaia generate revenue and allocate its earnings?

The Gaia protocol generates revenue through various fees, including trading fees (4.75%), performance fees (8% on investment profits), and deposit fees (1.5%).

For the moment, revenue is reinvested into Gaia's operations, primarily used for marketing, future development, and team salaries. In the near future, a percentage of the revenue will go directly into the Treasury, supporting impact investments and directly benefiting token holders.