The Standard Economy Ecosystem
Standard DAO is a decentralized multi-economy ecosystem.
The Standard Economy Ecosystem creates a circular economy that benefits both non-equity holders and equity holders that interact with the protocol and the economy it powers. We do this by launching Economies in each of our core verticals of operation that benefit our partnering organizations, customers interacting with the products, and SDA token holders.
Standard’s protocol delivers passive returns to investors from this ecosystem. Investors benefit from the activity across this Standard Ecosystem through revenue share and asset backing. This means that we work to add to the overall value of the assets in the Standard treasury which are backing the SDA token and build revenue streams that add to the SDA token’s potential market value.
This Ecosystem approach is built on the following key tenets:
- 1.Non-dilutive token mechanics Diversity, sustainability, and exponential growth of revenue sources
- 2.A separation of voting & Non-voting tokens on the Standard Protocol
- 3.Ensuring a 1 person / 1 vote governance system around Protocol Governance
- 4.Ensuring delegation of Treasury Assets is weighted by SDA holdings
- 5.New DAO/Sub-DAO creation with ownership weighted towards network supporters
Standard distributes proportional shares of the revenue gained from commercial activities within the three product verticals of the ecosystem to SDA holders. 3% of profits from all ecosystem revenues go directly to Investors. The proportional shares to each investor will vary based on the holders' staking time and length within the Standard protocol to incentivize a stable ecosystem. Standard actively incubates new community-led DAOs centered around a particular product or mandate, which provides non-dilutive, yet exponential growth of the Ecosystem.
The Standard Ecosystem creates a circular benefit for all stakeholders through an optimized ecosystem centering around the following 5 components:
- 1.Standard Treasury (The center of the Standard Economy Ecosystem);
- 2.Economies (e.g. The Securing Web 3 Economy);
- 3.Equity Token Holders (Protocol beneficiaries and voters);
- 4.Product Purchasers (Non-Equity Network Utility Token (NUT) Holders);
- 5.Engaged Social Networks (Growth & Adoption - non-equity)
The core of the Standard Economy Ecosystem is the Standard Treasury. This treasury gives Standard the collective power and capacity to create economic opportunity for the ecosystem and scale our impact on society and the public good.
The Standard Treasury is the first diversified, community-driven, decentralized treasury serving a mandate towards community impact. Assets held in the Standard treasury are Standard Assets, built on the fundamental principles of the Standard Digital Asset framework.
A key differentiator of the Standard approach is that Treasury assets are put to work in unique ways that serve the fundamental growth and development of the Standard Ecosystem to generate revenue-producing activity for token holders and the broader blockchain ecosystem.
Assets held in the Standard treasury are Standard Assets, built on the fundamental principles of the Standard Digital Asset
Standard Digital Assets are backed by a diversified treasury of assets that have proven to maintain their value in both bear and bull cycles. Through a unique swap mechanism, Standard Assets are brought into the protocol treasury and never leave providing backing for the Standard Digital Asset. These mechanics drive value creation as backing for the token increases. Each holder of a Standard Digital Asset maintains certainty that the value of each token will not decrease below the amount backed by the treasury, while also holding voting rights for the direction of the protocol. As the treasury grows in value and revenue, the backing for token holders also grows, providing stability for the protocol and the ecosystem.
The management of the treasury and the Standard Digital Assets added to the treasury will be managed by a business unit of experts within Standard. This will lead the expansion and exploration of the definition of “a Standard Asset” over time to reflect macroeconomic conditions. Standard’s treasury management arm will also be responsible for research and recommendations to the DAO core team regarding the acquisition and management of the DAO treasury of new and existing Standard Assets to be held by the protocol.
The treasury will engage expertise externally, and within the Standard network including for research, technology and analytics to stimulate growth and development of the ecosystem . Being crypto and Web3 maxis ourselves, we think building a strong fundamental understanding of a protocol or sector is important, but also pretty darn fun. The treasury will implement cutting edge tools to mitigate downside risk and ensure a diversified, balanced portfolio optimizing towards capital efficiency which will be assessed in partnership with the technology team. This team will also oversee operational security and QA to ensure the long-term and short-term safety of our asset acquisition and storage. 4.2. Minting the Treasury - Creating a Store of Value Standard aims for the SDA token to act as a long-term stable, growth-optimized store of value. A treasury is only as good as the assets it holds, and the quality of those assets is determined by their proven ability to not only hold their value, but to also increase in value over time. The assets we are choosing are what we would call “recession proof assets”, as well as acting as a public good by supporting positive ecological, social, and decentralized governance impacts. We have deliberately designed the Standard treasury to include a diverse pool of assets across multiple asset classes. This limits volatility by ensuring the maximum potential for growth is tapped and provides downside security.
The treasury will include some of the most prominent digital and real world assets in the class with demonstrated and provably high utility and networked value in society. As an example it will include assets like Ethereum and Chainlink due to the utility and ‘network effect’ they both provide as vital pieces of digital infrastructure in Web3. It may also include tokenized real estate, commodities, energy, carbon credits, or an equity stake in revenue-producing businesses as other examples.
Ethereum is widely recognized as the leading Smart contract platform - a utility that enables digital agreements to be built on top of blockchains enabling the development of a number of different applications and services (Dapps). Ethereum is now integrated in the network of crypto investors as a historically trusted and relatively stable asset. It is also integrated into real-world utility, including NFTs, tokenization and other smart contract applications in the real world. Oracles like Chainlink, meanwhile, enable smart contracts to bring in and utilize real world data in these smart contract enabled agreements and applications.
Both of these blockchain-based networks work synergistically to enable the building of secure tools and applications that benefit society. Both networks use the respective asset to pay for transaction fees and incentivize security, decentralization, and validator/node development. As these networks grow, this drives increased utility for the respective assets, shrinking circulating supply and eventually driving up the price in correlation with the value secured by the network. Utility is a nontrivial metric in the definition of Standard Assets, and we expect to bring in many more blockchain-based assets in other verticals over time once their respective niches mature and utility is proven.
Building a utility-focused treasury in this way not only provides security for the underlying token it is backing, but also provides stability for the entire network. 4.3. Treasury Revenue Streams Standard revenue models are built through developing pipelines of consistent value for others, thus generating value for the Standard Treasury and holders of SDA tokens. Revenues that come back to the treasury go to two places, the Validation Treasury (Used for the DDN) and the Standard Treasury (to be managed like a more traditional treasury). Revenues from products built on the treasury and assets performing inside the treasury go back to the Standard Treasury, increasing the value of the reserve backing of each token.
Sources of revenue from the first phase of the Standard Protocol include but are not limited to:
Royalties are earned from each primary sale of Standard Utility NFTs. 70% of revenue from direct sales will go to the treasury.
As holding these utility NFTs becomes more desirable, they will be traded on the secondary market, leading to further revenue that supports the DAO treasury. Partnerships with NFT projects, marketplaces and other DAOs are also formed which will provide a commission-based revenue to the Standard treasury within the range of 2.5% - 10% of sale price.
Blockchain validation will earn revenues at variable rates according to the amount of assets being used for validation. An indicative rate is between 3-10% APY on all Ethereum being used for this purpose. Other Potential Revenue Streams:
We explore and launch innovative lending, insurance, and yield-generating products.These will generate revenue via commissions and will be designed to be win-win so that members and others receive fair value by utilizing these products.
Standard DAO will generate revenue by capturing market value from the Standard Assets held by the DAO. This could include energy sales to the grid or other users from renewable energy infrastructure, rental income from real estate owned by the DAO, and fees from equity deals.
Standard will earn returns on investment from successful product incubation by identifying high growth, innovative early and later stage projects from within the Standard Economy Ecosystem. Standard’s treasury team will identify and assess risk-to-reward ratios to ensure Standard engages in sustainable and lucrative investments.
Each Standard Economy will be built on the same core of the Standard Treasury, the native SDA token and voting mechanics, the core Technology protocol, and deliberative governance structure.
The first Standard Economy is the Securing Web3 Economy, (focused on securing Ethereum at first) and powered by the DDN structure.
The Securing Web3 (Validator) economy receives assets from the Standard Treasury which enables it to increase revenue streams gained from securing the Ethereum network. The central basis of this economy is Blockchain Staking and validation. Standard aims to assist leading blockchain networks such as Ethereum with the important task of validating their blockchain network. We are doing this by designing our first product in this economy which is a more efficient and decentralized proprietary system for validation called the Distributed Delegation Network (DDN).
The DDN is designed to capture sustainable revenue by deploying Standard’s treasury assets and liquid assets that are operated by non-equity token holders toward infrastructure that is fundamental to Web3 growth and adoption (e.g., validation, indexing, oracles, storage). A centralized pool of assets is controlled by a distributed pool of participants controlling the flow of assets to revenue-bearing functions prioritizing decentralization of the network and capital efficiency of Standard Treasury (i.e., maximizing revenue while minimizing the risk of loss by staking to the highest quality node operators).
In the Securing Web 3 Economy, the utility of the DDN is to ensure optimal deployment of assets, limiting security and staking risk, all while maintaining a diversified distribution of asset delegation. This provides vital resources to the blockchain networks we validate as well as returning a steady and reliable yield revenue stream for Standard and its equity token holders.
Any person can obtain SDA either through the token presale, by swapping assets for tokens through the treasury, or by purchasing SDA off the open market. SDA token holders may stake their SDA to gain voting equity over the entire Standard Treasury and a level of control over the delegation of Standard assets to each Economy within the ecosystem.
Non-equity holders purchase products created by Standard that offer particular commercial or consumer services and benefits. Product users do not need to hold SDA so therefore do not share in the value accruing to all SDA holders, however they are free to purchase SDA on the open market once they become more engaged in the ecosystem. This ensures that the SDA token is not diluted, while enabling Standard to innovate and incubate new decentralized products that benefit the ecosystem and holders as well as to onboard new customers and potential protocol users. These products are enabled by the Supercharging Digital Assets vertical and the Scaling Web 3 infrastructure vertical. The supercharged utility token technology enables products sold within the ecosystem to come with a Network Utility Token attached. The Network Utility Token is available at any time through the Standard Protocol if a user creates an account. The Scaling Web3 infrastructure vertical also enables the provision of stable yield as DeFi products that will be offered to participants in the Standard Ecosystem.
3.3 Equity token holders Any person can obtain SDA either through the token presale, by swapping assets for tokens through the treasury, or by purchasing SDA off the open market. SDA token holders may stake their SDA to gain voting equity over the entire Standard Treasury and a level of control over the delegation of Standard assets to each Economy within the ecosystem. 3.4. Engaged Social Networks (Growth & Adoption - non-equity)
The Standard Economy Ecosystem is designed to optimize for Adoption and Utility of the products we create, as well as for growth and onboarding of new users, including those who are not crypto/Web3 natives. The ‘Engaged Social Networks’ vertical enables users with no prior crypto knowledge to purchase products within the Standard ecosystem using traditional payment methods in addition to Cryptocurrency. By deliberately making entry into the product ecosystem low-barrier we encourage new participants to enter the Web3 space. However, we also utilize the incentives of free airdrops and demonstration of the benefits of community-led organizations to incentivize people to go deeper into the Standard ecosystem by participating in an engaged social network focused on the product they have purchased.
This model also extends to our provision of engaged social networks to partner organizations in the corporate or nonprofit sector. The adoption of this community engagement model and technology by our partners’ customers will serve to increase the revenue growth towards the Standard Protocol and Treasury.
Standard benefits from bonds of assets to the treasury and ecosystem development. The DAO will work to grow liquidity for $SDA and also build and incubate new applications and protocols on top of and in synergy with Standard. Equity token holders benefit by both increased backing of the Standard token as well as revenues received from the Standard Ecosystem. The more the ecosystem grows, the more revenue Standard and its equity token holders will receive. As the treasury grows, this also increases the backing for each SDA token, driving value for holders. Eventually, this ecosystem will grow to swallow up all the major Standard Assets across all major verticals, providing a robust foundation for the entire ecosystem.
There is potential for independent DAOs or sub-DAOs to be surfaced from within the Standard Economy Ecosystem itself. The flow for an idea to become an independent venture will be to move from an idea stage, to a working group formed by the people most committed to the idea, then through to venture would be as follows: Idea Phase → Working Group → Proto-Venture → Ventures An informal working group can be catalyzed by any Standard member on any topic or mandate within one of the approved Standard Economy verticals. If sufficient energy emerges from the network this group may apply to be evolved into a ‘proto-venture’ to explore potential to create a venture. If this sub-dao project appears to be successful and sustainable, it may decide to create its own legal wrapper as a separate venture within the Standard ecosystem. It can apply for Standard seed-funding to achieve this phase.