Intro: Bronwyn Stable Growth Fund
Bronwyn Ecosystem: The Stable Growth protocol consists of 4 key components that each play a role in sustaining the ecosystem. We believe that it important to make this protocol as digestible as possible for our users. This article is a break down of the system (TLDR at the bottom).
I. The Smart Contract
The contract uses a Stable Growth Token protocol, but with adjustments to the traditional infrastructure. Here is an overview of how the smart contract works and how we’ve changed it:
Like other Stable Growth Token protocols, the Bronwyn smart contract only mints tokens when they are purchased, burns them when they are sold back to the contract, and increases the price of all minted tokens with each transaction.
- In order to buy tokens, you send ether to the smart contract, it mints the number of tokens according to the current buy price and sends them to your wallet. The only way a token can be minted is if it is purchased from the smart contract. At the same time, it calculates the new buy price for the next sale using a mathematical formula. Every new purchase of the token drives the token price up.
- In order to sell tokens, you send them back to the smart contract and it permanently burns the tokens received. It calculates the amount of Ethereum according to the current sell price and sends them to your wallet. At the same time, the smart contract re-calculates the total supply of the token and adjusts the sell price. Every new sell order also increases the price of the token.
- When you buy or sell a currency over an exchange (or bank for that matter), it charges the user a transaction and commission fee which is kept for profit. The Stable Growth Token protocol uses this same algorithm in the smart contract, but uses the fees charged differently: The difference between the token buy and sell price is redistributed to the token holders, thus increasing the price of all tokens. Additionally, the transaction fees paid to mint or burn are redistributed to token holders. Fees charged by the contract will vary based on how many tokens are minted and in user wallets. In this sense, the contract uses two sources to increase the price of all minted tokens.
This is a great idea, however, nearly all contracts using this method allow users to mint and burn an infinite supply. The Bronwyn Smart Contract has max amount of 100,000 tokens that can ever be minted. When a user wants to realize their investment in the form of Ethereum, they are forced to burn their tokens forever and reduce the overall supply.
II. The Token
The BRONWYN (BRON) token is the only way for users to take advantage of the Stable Growth offered by the contract. The maximum supply of BRON that can ever be minted is 100,000 tokens. Additionally, BRON will not be available on any exchanges upon its initial release and can only be acquired through interacting with the smart contract, as BRON is not yet meant to be traded peer to peer. Having the token on an exchange will make it vulnerable to price manipulation and will not be reflective of its redeemable value. This is subject to change with the maturation of the protocol and if the community votes to eventually list it.
For the first few weeks of operation, BRON can only be exchanged for Ethereum. We plan to add other major cryptocurrencies, such as wBTC and USDT (or other stable), in order to make the BRON token backed by a basket of different currencies depending on their weight in the contract. This will ensure that BRON’s value will not solely rely on Ethereum’s price movements.
The maximum amount of tokens that can be burnt or minted at one time is equivalent will be variable and according to the needs of the protocol. Although users are allowed to mint and burn as many tokens as they can afford, they may have to make multiple transactions to do so. This is a safety feature that can be changed or eliminated in the future.
III. The Capital Rebalance Treasury
We’ve seen other Stable Growth Tokens fail due to the lack of user interaction with the contract. We plan to circumvent this issue by adding a third component to the protocol: the Capital Rebalance Treasury.
The first transaction consists of the CRT purchasing 35% of the total possible supply (35,000). The Treasury is an integral part of the protocol, as it will incrementally burn the remaining tokens over time on a weekly basis. The burn rate adjusts according to the amount of users and transactions at the time of the burn event. This guarantees that BRON will not be heavily impacted by a deficit or surplus of contract users.
Additionally, The CRT will incentivize users to burn or mint tokens with Capital Rebalance Events that encourage contract interaction. The CRT essentially functions as a capital coordination tool to sustain interaction with the contract over time, therefore ensuring the Stable Growth mechanism is employed regularly.
IV. The Users
We like to think that participating in the BRONWYN Smart Contract is a conscious and active choice by the users. The Users play a key role in the future success of BRON. Without users, any protocol is doomed. Whether you intend on aping in or out of the protocol, dumping all of your tokens, buying/selling incremental pieces, we value your participation. Though we do not guarantee any results from participating in the protocol, this is a collaborative and experimental project that we hope everyone can benefit from.
We encourage users to burn their tokens from time to time, because this is the only way to realize their investment. BRON is only representative of the value in the contract, and therefore has no inherent value.
- The Smart Contract offers a Stable Growth Token protocol with some adjustments. Every time a token is bought or sold a special mathematical algorithm, integrated in the smart contract distributes the commission earned to all issued tokens, effectively increasing the price of the token with each transaction. Bronwyn adds an additional layer of value by making the max supply that can ever be minted 100,000.
- The BRON Token can only be acquired by interacting with the Smart Contract (this will up for vote in the future). The Token will initially only accept Ethereum, but will later accept other large cap cryptos (wBTC, USDT), making BRON a Stable Growth Token backed by a basket of different currencies depending on their weight in the contract.
- The Capital Rebalance Treasury will buy the first 35% of the total supply, leaving 60% left in the contract to be minted. The CRT will incrementally burn tokens over time (so the protocol will not be heavily impacted by too many or too few users). Additionally, the CRT will provide special incentives and Treasury Rebalance Events to encourage contract interaction- this will help sustain the protocol over time.
- The Users play a key role in our ecosystem, as any protocol is dead without users. Participating in this economic experiment is a conscious and active choice and we hope to build an ultimately community governed protocol that can adapt based on the supply/usage/etc. Users will also have the opportunity to stake their tokens in the future as supply gets more and more scarce.