❓FAQ
How does this all work?
At a high level, CoachAI Finance consists of its protocol managed treasury, protocol owned liquidity (POL), bond mechanism, and staking rewards that are designed to control supply expansion.
Donation Bond sales generate profit for the protocol, and the treasury uses the profit to mint CADT and distribute them to stakers. With liquidity bonds, the protocol is able to accumulate its own liquidity.
Under the CoachAI Ecosystem, we are developing several key subprojects which will bring in more profit. You can read more about these subprojects by visiting the "Features in development" section.
What is 4,4 and 3,3?
4,4 and 3,3 are some of the labels given to certain actions with regards to Game Theory. Game Theory is the study of mathematical models which can be used to determine the advantage or disadvantage of specific choices in a given scenario. In the case of CoachAI, we use it to describe the benefits and drawbacks of the various ways in which users can interact with the Protocol.
Below is the CoachAI Game Theory Matrix. It is a grid which you can use to determine the benefit of users taking actions within the Protocol. The columns indicate your actions whilst the rows indicate the actions of others. Each action is assigned a value which translates to outcome values on the table. For example, if both parties stake, the outcome value is 3 + 3 = 6. This is considered a highly positive outcome for the user and the Protocol. If one user stakes whilst another buys a 4,4 bond, the outcome value is 7 (3 + 4). This is also considered a highly positive outcome.
But if one user sells whilst the other stakes, this is an unfavorable outcome (-1 + 1 = 0). If both users sell, the combined downward price movement negatively affects them both. Therefore, an ideal scenario would be for all users to Stake and buy 4,4 Bonds. This allows the Protocol to build reserves and offer more attractive APYs whilst also allowing users to increase their stake and reduce their cost basis.
What is APY?
APY stands for annual percentage yield. It measures the real rate of return on your principal by taking into account the effect of compounding interest. In the case of CoachAI Finance, your staked CADT represents your principal, and the compound interest is added periodically on every epoch (28,200 Binance blocks, or around 8 hours) thanks to the rebase mechanism. One interesting fact about APY is that your balance will grow not linearly but exponentially over time! Assuming a daily compound interest of 2%, if you start with a balance of 1 CADT on day 1, after a year, your balance will grow to about 1377.
Are high APYs sustainable?
APY relies on the sale of Donation bonds in order to mint new CADT tokens. If sufficient bonds are sold, then high APY rates are sustainable. If the protocol aims for 10,000% APY, and 10,000 CADT tokens are staked, 200 CADT tokens need to be minted daily in order to achieve the APY; (Roughly 2% growth a day). If there are at least 200 CADT tokens brought into the protocol from bond sales, the APY is sustainable. The APY can be high due to compounding interest. Funds are auto staked everyday to generate exponential growth. Over time, APYs will decrease to allow for CADT to become deflationary. Rewards given to holders will change in form but will always exist.
Why is the market price of $CADT volatile?
It is extremely important to understand how early in development the CoachAI DAO protocol is. A large amount of discussion has centered around the current price and expected a stable value moving forward. The reality is that these characteristics are not yet determined. The network is currently tuned for expansion of CADT supply, which when paired with the staking, bonding, and yield mechanics of CoachAI Finance, results are a fair amount of volatility. CADT could trade at a very high price because the market is ready to pay a hefty premium to capture a percentage of the current market capitalization. However, the price of CADT could also drop to a large degree if the market sentiment turns bearish. We would expect significant price volatility, particularly during our growth phase so please do your own research as to whether this project suits your goals.
What is a rebase?
Rebases are the mechanism by which the Protocol rewards stakers. Approximately every 8 hours (every epoch on the Binance Smart Chain), the Protocol mints new tokens using bond profits and distributes them to stakers as a reward. Stakers are rewarded in sCADT, which is always redeemable for CADT at a 1:1 ratio from our Dashboard.
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