Fund Structure
Starts with a $10M principal. Each year, only 10% is allocated for investing in projects, ensuring most capital remains invested for long-term growth.
This means we will have $1M for the first year, approx $250k per quarter available for grants and loans.
The $10M is a long term goal. We can start with small amounts and start testing the system.
Immutable Extraction Rule
Immutable on-chain rule extracting 10% per year. Designed to prevent system gaming and depletion of the principal, ensuring sustainability.
This means that we are always funding projects with the Fund’s yield, protecting the principal.
Investment Strategy & Yield
Expert panel manages the fund strategies and targets a 15% annual yield through diversified crypto investments. Active management and automated rebalancing help balance aggressive growth with risk control.
Note that the target yield has to be bigger than the “extraction rule” so that we defend the principal from being depleted.
Project Funding & Milestones
Projects (investment recipients) receive funding in $3K increments per milestone. They must meet milestones to keep receiving funding.
Projects split Revenue with the Infinite Fountain
Projects also have to create a split contract to automatically return 10-20% of their profits to the fund. (The percentage will be defined by the Fund managers).
Crowdfunding Campaigns to further replenish the Infinite Fountain
- After every 4 milestones, each project’s 5th milestone will be about launching a Crowdfunding Campaign to replenish the Infinite Fountain.
They will get full support from the whole Allo-Dao community so that our joint efforts secure more funding. 50% of the funds generated during this crowdfunding campaign will go to the project, and 50% to the Infinite Fountain.
ETF Structure & External Investment
Optional: In the future, the fund could get tokenized, allowing external investors to buy ETF-like tokens representing a share.
Governance
A combination of community voting (50% of the weight) and a rotating expert panel (50% voting weight) ensures balanced, democratic decision-making and accountability in fund management.
I am seeing amazing governance methodologies from other contestants, so this Infinite Fountain could also be governed by the method the Dao chooses after the contest.