Hayek <> Frax Partnership & Seed Round

Governance Proposals Token Swap / Seed funding
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We have already discussed with the Frax team about the possible collaboration and seed funding support from the Frax Team. We are here to propose collaboration in detail to the Frax community for further discussion and voting!

Introduction

The Hayek Protocol is named after the Austrian economist Friedrich Hayek who is best known for his defense of classical liberalism and won the 1974 Nobel Memorial Prize in Economics. Hayek’s stance makes him a godfather of the largest cryptocurrency. The European Central Bank even stated that “the roots of Bitcoin can be found in the Austrian school of economics,” of which he was a leading voice. Here in Hayek Tech, it is the world’s fractional-algorithmic stablecoin protocol. The governance token of Hayek, HAS participates in the process of stablecoin minting. And all of stablecoins corresponding to every country’s currency are able to be minted based on a common model.

Hayek is a new paradigm in global stablecoin protocol design. It brings together the implementation of Frax Fractional Stable Token design mechanisms into a protocol for all Hayek stablecoins:

Seven Pairs: Hayek stablecoins are the stablecoins aiming to peg seven different fiat currencies, including US dollar (USDH), European euro (EURH), Pound sterling/British pound (GBPH), Japanese yen (JPYH), Swiss Franc (CHFH), Korean won (KRWH), and Australian dollar (AUDH). Each pair follows the same protocol and algorithms and aims at being pegged to its corresponding fiat money.

Our goal is to build the financial infrastructure available for normal web2 users to migrate to Web3 and essentially provide them products like forex change to achieve more advanced and diverse financial activities.

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Proposal

Hayek invites FRAX to participate in the Hayek.Technology’s seed round as a protocol DAO. Hayek’s governance token HAS will list on the bellowing exchanges in May or later in 2022: MEXC, BitMart, LBank, Hoo, Hotcoin, AAX

By holding HAS, HAS will later be able to stake as veHas for Hayek governance voting and earn more HAS distributions.

Hayek would be willing to adopt the Frax stable token as its collateral for minting the Hayek Stable tokens. This would be an ideal use case for Frax stable token where more users would want to mint or swap for Frax token to use as collateral to mint our Hayek stable tokens. To be exact, this implementation will increase the amount of Frax tokens available in the market and also increase the demand of the token.

Hayek will also create a FRAX<>USDH, FRAX<>EURH, and other liquidity pairs and intend to apply for an FXS gauge in the future. We would love to spread the adoption of FRAX tokens in the Defi market instead of centralized tokens such as USDT or USDC to help bring more decentralization to the industry.

We are also interested in 4pool pair, which we will make another proposal later.

Minting/Liquidity Supporting

Minting Supporting($3.6M FRAX Requested+$400K HAS Requested)

  • Cap(FRAX+HAS)= $ 4M; Need around $3.6M FRAX+$400K HAS;
  • Cap(HAS)=$400K; Added HAS price $0.4. that is 1M HAS(get from investment);
  • USDH(Minted): $2.4M

EURH(Minted): $800K

Sum(GBPH+JPYH+CHFH+AUDH)=$800K

Liquidity Supporting($4M FRAX Requested)

  • USDH/FRAX: $2.4M: $2.4M
  • EURH/FRAX: $800K:$800K
  • (GBPH+JPYH+CHFH+AUDH)/FRAX: $800K:$800K

Total: 7.6M FRAX+$400K HAS

Seed Investment Terms

  • $1 M allocation for seed round investing to get 3.33 M HAS tokens;
  • Price: $0.3 /HAS, Total Supply: 200M; Fully Diluted Value: $60 M;
  • Vesing 30%, 1M HAS, when invest and 1 year lock; then 2-year vesting schedule with linearly quarterly release.
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Hey Hayek-tech

Raising at a $60mm FDV is very rich in this macro environment - especially considering the asks you are putting forward (from what I can divine) above. If Frax is to take the liquidity risk of $7.6mm and give you an extra $1mm only to end up with 1.6% of the token supply - it seems like a fairly bad deal. This seems similar in terms to the asks that Volt protocol are making of Fei/Rari - but in that case Fei/Rari are ending up with 30% of the protocol governance token and not 1.6% (see FIP-88: VOLT joins the TRIBE - Proposals - Tribe)

Could you also let us know what the vesting schedules are for the relevant groups discussed in the token distribution document? Hayek Token Matrix. There will be 200,000,000 HAS tokens… | by Hayek Technology | Apr, 2022 | Medium

Thanks

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so generally speaking you propose FRAX puts up

$7.6m FRAX for liquidity mining.
buys $400k HAS at ($0.40) and also uses this for liquidity mining.
allocates $1m FRAX for a seed round investment buying HAS at $0.30

total proposal value / risk to FRAX of $9m.
reward for FRAX = 3.33m HAS (about 1.2% of supply) with 1m HAS locked in a 2 year vesting.

have i got that right?

is there rewards for providing liquidity from the start or only after veHAS has been introduced?

if there is liquidity provider rewards will they be higher at the start to balance the risk / reward of early providers?

if 30% of our HAS is locked in vesting does that mean it cant be locked in veHAS when veHAS launches?

can you link your whitepaper and any websites ect please.

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Hey Mark11,

Thank you for the comment.

I think we should clarify that we are actually not on the seed funding stage, it is not very accurate to describe our current status.

We have already very close to launch our product by the end of May, most of the prototyping is finished, and the testnet version will be soon out in a week. And if you check the proposal you mentioned, 30% allocation is not entirely for one protocol, its a total fund raising allocation. Regarding of that part we are also constantly in talk with other VCs as well as Exchanges for IEO. We have already secured Bitmart, BitMart, LBank, Hoo, and Hotcoin.

Regarding of the vesting schedule.
For the community, the release plan for now is with varieties of yeild farming products, we will gradually reward our users using veHAS gauge system in 3 years.
For Team is 36 months linear distribution.
Investors is all 1 year lock, and 2-year vesting schedule with linearly quartery release.

Cheers

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Hey Sparkes25,

Thank you for your question.

Actually we are asking Frax to invest $1M at $0.30 to purchase 3.33M HAS, and use a portion of the investment to mint our Hayek Stablecoins. We assume the price of the HAS token will be $0.40 dollars when minting, therefore the value we ask for minting is $3.6M Frax + $400K HAS, and the $400K HAS comes from the investment of HAS token from the $1M investment.

So to clarify, The Bold Italic values are what we are proposing to Frax for supporting:

  • Investment: $1M at $0.30 to purchase 3.33M HAS tokens
  • Minting:
    – extra $3.6M FRAX from Frax protocol, and $400K worth HAS tokens, taking out from the invested 3.33M HAS tokens.
    – This $4M worth minting will produce: $2.4M USDH, $800k EURH, $800K worth of GBPH, JPYH, CHFH, AUDH combined.
  • Liquidity Supporting: Using the minted Hayek Stable tokens, and additional $4M Frax to provide the liquidity of the minted Hayek Stablecoin trading pair.

Therefore, total proposal value: $1M for investment + $7.6M for minting & liquidity mining.
Reward for Frax = 3.33M HAS, 30% of the HAS which is 1M HAS will be used for Minting the tokens, which is mentioned in the above $400K part. We are assuming these 1M HAS token will worth $400K, and these tokens will be locked for 1 year. then the remaining 70% of the HAS tokens will be distributed to FRAX based on linearly quarterly release.

veHAS will be introduced at the launch of our project.

yes, the major strategy of develop a stablecoin protocol is composed of providing high incentives as well as various use case of the stablecoin.

this 30% is used to mint the Hayke Stablecoins in the minting part of the proposal mentioned.

Medium: Hayek Technology – Medium
Whitepaper: HAYEK TECH WHITEPAPER - Google Docs

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Thanks for the reply @hayek-tech - but this isn’t right

It’s right there in the first and second bullet points of the proposal giving 6% and 24% to the single entity “Tribe DAO”

image

Volt offers Tribe DAO 6% for prelaunch assistance and 24% at seed round prices for launch assistance. The seed round prices in that proposal are referring to the seed round which happened months ago led by Nascent with angels - the seed round was for 10% of supply at $20 FDV.

The type of support you are requesting is very similar in kind but Frax would end up with 1.6% not 24%. I am not suggesting that you should match what Volt is doing for Tribe DAO, but your offer is for us to take a massive risk with significant protocol funds for the “opportunity” to buy 1.6% of HAS at a $60mm FDV. That valuation is over the top in this current market. For example Fiat DAO who have a post launch working product are trading at $50mm FDV - MStable who have been developing their platform for years are at a $60mm FDV - Inverse Finance who have been operating a stablecoin for over a year have a partnership with Yearn and are trading at $20mm FDV.

There is a not insignificant chance that the HAS token will trade at less than $60mm FDV. In that circumstance we will have put material amounts of protocol funds at risk - be worse off than if we had just market bought HAS at launch and then be in a situation where we can’t even yield farm with our HAS token because the vast majority of it is locked up for over a year.

I think you really need to reconsider the FDV basis of the HAS token offer to Frax - as it seems to me we will be the entity taking most risk for the launch of this product with the worst terms and significant risk that we may lose money if the public sale does not exceed $60mm FDV (which in this market is a real risk).

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Thanks for the detailed reply @Mark11 , it has cleared out my misunderstandings of the volt protocol, and I believe you have a point.

In this case, would like to propose an adjusted terms:

Minting/Liquidity Supporting

Minting Supporting($1.7M FRAX Requested+$300K HAS Requested)

  • Cap(FRAX) = $1.7M Frax for Minting Support.
  • Cap(HAS) = $300K; considering HAS at $0.2, which is 1.5M HAS Tokens, the 30% of the tokens from the investment

From this minting support, we will get:

  • USDH(Minted): $1.4M
  • EURH(Minted): $300K
  • Sum(GBPH+JPYH+CHFH+AUDH)=$300K

Liquidity Supporting($2M FRAX Requested)

  • USDH/FRAX: $1.4M: $1.4M
  • EURH/FRAX: $300K:$300K
  • (GBPH+JPYH+CHFH+AUDH)/FRAX: $300K:$300K

Total: $3.7M FRAX + $300K HAS(which is the 30% of the investment)

Investment Terms

  • $1 M allocation for early investing to get 5M HAS tokens;
  • Price: $0.2 /HAS, Total Supply: 200M; Fully Diluted Value: $40 M;
  • Vesing 30%, 1.5 M HAS, when invest and 1 year lock; then 2-year vesting schedule with linearly quarterly release.

Let us know what you think,
Cheers