The BuyBack Bonus ( BBB )
VERY Important information. Read it!!
“BuyBacks” mean different things to different people and ours is a little special of its own.
This is a big part of the answer to “why would anyone put money on a non-profit decentralization mission?” Other than agreeing with our dream, of course.
The BBB is a collective fund that automatically & continuously accrues and cold-stores a fixed amount (25%) of all platform generated (net) revenue throughout the self-decentralization process.
This is an extra revenue stream for token holders, accrued on top of all other claims, and meant to compensate for the value of their long term agreement with our mission of self-decentralization.
The value of this fund is what allows the mechanism taking tokens out of circulation, thus increasing scarcity and the relative worth of remaining token supply.
Only ARENA Security Token Holders have a claim on the funds accrued in the BuyBack Bonus. Funds are allocated pro rata among existing holders.
Deploying a competitive exchange is a massive task and requires a lot of money.
The BBB is key in rendering our proposal feasible by making it financially attractive to investors, while guaranteeing the delivery of our long term non-profit mission.
Holders can only claim their share of the BBB fund upon “Exit”, and is on top of the actual face value at the time of sale. "Exit" refers to special transaction that happens by clicking a dedicated button in the UI.
This will execute a market order, by which the Holder sells his/her ARENA Security Tokens to CryptoArena Foundation at the current market price. When this transaction is confirmed, automatically, you also "unlock" your share
Holders may, alternatively, also sell their Tokens to other qualifying Users through a dedicated OTC market, however, in such case, the claim on the BBB does not trigger, and transfers to the new Holder – thus, if you do intend to, you’d better ask for a premium !
Token Holders may exit their investment in the above-described methods at any time, at their leisure. Once self-decentralization is complete, when no Holders remain, the BBB ceases to exist and its Token weight (that fixed 25% I mentioned earlier) is allocated to general distributions, thus reaching 100%.
In practical terms, this means shares are worth 150% of their weight, thus, if you own 4% of total supply, your share will actually earn 6% of net profits, but you won’t be able to access the BBB portion (that extra 2%) unless / until you Exit.
Escalating scarcity & Price support
Even better, the extra weight portion increases permanently whenever another Holder exits.
Tokens repurchased through the BBB mechanism are automatically and permanently allocated to revenue distributions, which also means all future accruals within the fund will belong to a numerically smaller number of tokens, leading to greater and greater shares the more others exit.
ARENA Security Tokens are designed to reward endurance - those who hodl the longest will benefit most.
Simplifying, it works somewhat like the children’s game “musical chairs” - Whenever a “chair” is taken out of the game (tokens bought back), the remaining others become more valuable.
Also, increases to allocations other than your own individual share, also benefit you, both directly and indirectly. Unsold Tokens contribute to ongoing cash position, as long as they remain unsold.
1) Justifying the extra weight
Company has 100 shares makes 100€ in net revenue in previous period and distributes it.
There are 50 Holders with equal shares. Bob the ARENA Holder is one of them
Only ARENA Security Token Holders claim the buybacks, thus, in this example, there are 50 people with have an equal claim on the 25 € of the BuyBack.
This means that Bob earned € 1.50 in total from his 1% share, rather than € 1.
Now let's dive into the how the weight of your shares grows over time, while holding the same numerical amount of tokens. ARENA Security Tokens are designed to reward endurance. Those who hodl the longest, get most.
Token Holders may, at any time, decide to sell off their tokens through the BuyBack mechanism, this is an automated process that repurchases Tokens and allocates them to general public revenue distributions.
Setting aside the public distributions themselves, this means that the amount of outstanding tokens with a claim on the funds in the BuyBack decreases over time. There are now 45 people with an equal claim on the 25 € that was accrued by the buyback fund in this hypothetical period:
This means that now Bob earns € 1.55 from holding the same numerical amount of tokens, on all future accruals of funds in the BuyBack. The more others exit, the more this will increase.
Our Security Tokens are specifically designed to reward the endurance of investors. The Dividend component allows you to obtain a running passive income to either live on or reinvest, while the BBB's unique rewards accumulate incrementally in secure storage.
Our advise is simple: HODL it until you can.
p.s. founders tokens are locked all the way to the end to demonstrate commitment to our promises.
Last modified 1yr ago