True Freeze is DeFi patience primitive. It’s made for HODLers, allowing them a baseline rate of return for locking their assets out of circulation. HODLers are able to withdraw their assets before the maturity date but are required to pay a small fee, that acts as ROI for the rest of the locked HODLers. Due to relatively simple smart contracts and no systemic risks, it aims to establish itself as the new category and address the huge market of currently not utilized ETH.
Partnership & Community Development
True Freeze is seeking to allocate a larger 20% of the initial supply of FRZ to DAOs, Protocols, and communities who can steward the protocol as part of their ongoing work in building web3. This allocation will function as a grant, there will be no governance or admin oversight on this FRZ. Any groups accepting the grant and failing to support the public goodwill see their percentage of the network rapidly fall (again, by design) unless they actively use True Freeze.
The largest percentage of the initial FRZ supply (42%) will go to the community of users via an airdrop with an emphasis on builders and active participants in the DeFi community.
While the economic theory supports a free-market approach to pricing frETH and FRZ, the practical reality is that people will earn FRZ in the airdrop and not want it, and people will mint frETH but not want to burn it. As such, it is critical that the True Freeze ecosystem be modular and easy to enter and exit at different points. So 20% of the FRZ initial supply will go to a liquidity incentives program not managed by Deep Freeze LLC. Decentralized Exchange partners are being identified to run liquidity incentives autonomously.
Decentralizing Funding Sources
The hope is that by spreading the FRZ revenue token ownership widely, multiple different groups will form that have different ideas on how to build on top of or integrate True Freeze into other protocols. Individuals who see the century+ vision of True Freeze can self-organize (or join partner DAOs) to volunteer their FRZ to initiatives they want to see (e.g., automated strategies).
Do we find True Freeze idea exciting? Why?
Do we want to as a community participate in the airdrop and contribute? If yes at what level (bronze, silver, or gold)?
Any concrete ideas for our deeper involvement and bringing value to True Freeze?
Why I’m excited?
I personally feel like there is a huge unaddressed market of people that are not comfortable with staking their ETH, due to smart contracts or systemic risks. Primitive like True Freeze might be able to serve this huge market.
Where are my doubts?
I think this frETH combined with FRZ and NFTs is an extremely overcomplicated approach for something that is supposed to be simple and straightforward. I’d be more excited about the product without frETH.
Where to contribute?
I see the potential for “Gold” or “Silver” partnership. I am not sure if utilizing treasury ETH in this is a good idea for our needs, but I do see the potential for contributing to product development and adoption.
Okay, so we are using fees from withdrawals to give yields to those who don’t. Which means that our returns would be very variable and cannot be set at the time of locking.
Of course if many people decide to withdraw then fees go up and returns go up and vise versa if no one is withdrawing then fees go down and rates too and incentives go up.
What I would like to see is a formula coupling these two together so that we have a better picture if this works out algebrically.
And some practice test examples to see what ideal numbers would be, so that we can see how much demand there would be.
As high demand for low yield and high lockup times might not be all that high. And withdrawing right away comes at a high cost so it would be risk for people who lockup their ETH.
I don’t think you can formalize the market forces that will dictate the returns on frozen eth, esp because deep pockets can game these things.
The institutional angle for being able to purchase eth in an OTC way on chain makes sense to me, I just find it hard to figure out how wallets that have not even touched their eth (if those are even self custodial wallets) will lock it without some initial incentive.
TBH all the DAO’s with treasuries seems like the target audience for this (they want DAO"s like us to put funds in), and honestly i wouldn’t mind if we had our treasury in it if we were able to hedge the amount of eth locked with long dated otm options. Would be better than the random tokens the DAO treasury has allocated funds into in the past (if we hedged).
Besides we can also hedge the return too if there was a oracle feed for frz eth (a la interest rate swaps).
Why I’m excited:
Product is good, and the airdrop stuff makes it kinda lucrative, but being an alpha hunter I’m more excited about establishing partnerships with new DeFi protocols through True Freeze. They really have a good set of names who’ve shown interest in them, and us being added to that list would definitely help creating a network in the near future.
Where to contribute:
Gold, eyes closed.
P.S.: Agree with @cinquemb on the OTM ETH puts hedging idea!