BonqDAO is a technology-focused web3 non-profit decentralized autonomous organization (DAO) that develops and governs the Bonq platform. The platform allows web3 projects and protocols to create deep, protocol liquidity for their native tokens. Additionally, it provides low-risk, sustainable yields to its end users.
In the future, as DeFi eats all real-world assets, Bonq will support all tokenized real-world assets collateral, including invoices, real estate, and shares of private companies, thanks to its formalized, data-driven business model.
This document will present our business plan assumptions and discuss BNQ token cashbacks, allocation, and release schedule.
The content of this document is for informational and educational purposes only. Its sole purpose is to explain the business model of BonqDAO and show the difference between the revenues of the DAO and the fees collected by the protocol itself and redistributed to the users. All data in this document is based on assumptions about the adoption of the protocol, which will most probably be inaccurate and will continuously change as Bonq grows and evolves.
Bonq is a blockchain-native project, with its own utility token called BNQ. The token is used to align incentives in the Bonq ecosystem, allow users to customize the usage of the platform, distribute the platform fees back to BNQ holders as cashback and facilitate governance processes.
BonqDAO is a non-profit entity that builds the Bonq platform and focuses on bootstrapping the ecosystem, facilitating adoption and more use cases for the platform. A good framework is to think about BNQ as the native token that fuels the Bonq platform and think about BonqDAO as the first of many entities that will build decentralized applications on this platform.
Bonq DAO will generate revenues by:
Charging listing fees for whitelisting native tokens.
Charging membership fees from the protocols whitelisting their native tokens.
We’re estimating that in total these fees will grow from $500k in 2023 to over $31 million in 2028. This will ensure that BonqDAO is a sustainable organization and can continue developing the Bonq platform.
All projections are available as a google spreadsheet here.
The key utility of BNQ is the perpetual cashbacks it generates for its holders who stake it (deposit in a smart contract). Bonq platform will collect fees from its users and redistribute these fees back to users who stake BNQ. It is important to note that only users who use the platform and pay fees will be able to receive these rewards. Therefore, they are cashback and not dividends. Users who don’t use the platform and don’t pay fees will not receive any rewards, so no passive income will be paid to BNQ stakers or BNQ holders who are not staking.
Bonq fees include:
Lending protocol fees - the protocol charges between 0.5% and 5% loan origination fee every time users lock up their collateral and borrow BEUR (the protocol-native, over-collateralized stablecoin). This is a one-off fee since the protocol doesn’t charge recurring interest. Additionally, the protocol charges redemption fees, but the fees are designed to strengthen the BEUR:EUR peg and are not expected to be a significant source of revenue for the protocol, so they are omitted from the projections.
Fees for premium services - BonqDAO offers additional premium services to its users, including SMS notifications, trove optimization bots, and yield bots. These services are not required for the functioning of the protocol, but rather automate many processes and make them more efficient and convenient for end users.
Arbitrage bots fees - Bonq offers anyone the opportunity to use the protocol’s arbitrage boots. These bots will execute arbitrage trades on the assets supported by the protocol: collateral tokens and BEUR. Users who deposit their assets will share a part of their arbitrage profits with the protocol.
We assume that by 2028 Bonq will have 15 million end-users. Given the very strong value proposition of the platform and the existing number of people holding cryptocurrency is higher than 220 million
[“The number of global crypto users reached 221 million in June 2021” (crypto.com Measuring Global Crypto Users. A Study to Measure Market Size Using On-Chain Metrics, July 2021)], we think this is ambitious but achievable.
Users will create on average between 1,000 (in 2023) and 2,500 (in 2028) BEUR per account, per year. We also expect 20% of all users to opt-in for premium services, paying between $100 and $250 per year, as the platform develops.
Finally, the arbitrage bots will generate between $500k (2023) and $380 million (2028) for the protocol. As mentioned above, these fees will be channeled back to BNQ stakes.
Given the above assumptions, the cash flow to the BNQ staking pool will grow from $1.7 million in 2022 to over $5.3 billion in 2027.
BNQ will have a total supply of 1 billion and will be allocated to
Early investors 10%
Impact grants and investments 5%
Community rewards and incentives 50%
Operating budget and investors 23%
Tokens for founders and early investors will be released gradually, over 3 years.
BNQ release schedule for Founders and Early investors is contractually agreed and will not change.
Other items may change subject to BonqDAO governance decisions.
Crypto projects and protocols that want to whitelist their tokens as collateral will have to stake BNQ. We aim at around 5% of circulating BNQ being staked for whitelisting. Therefore, 95% of BNQ in circulation will be available for cashback staking.
Between 2023 and 2028 we expect the cashback per BNQ to increase from $0.009 to $2.232, as the economic activity on the platform increases.
v4.2 January 2023