📚FAQ
How does it work?
At a high level, Solbank consists of its protocol managed treasury, protocol owned liquidity, bond mechanism, and staking rewards that are designed to control supply expansion. Bonding generates profit for the protocol, and the treasury uses the profit to mint SB and distribute them to stakers. With LP bond, the protocol is able to accumulate liquidity to ensure the system stability.
Solbank from a Game Theory standpoint
What is the deal with (🏦, 🏦) and (💸, 💸)?
(🏦, 🏦) is the idea that, if everyone cooperated in Solbank, it would generate the greatest gain for everyone (from a game theory standpoint). Currently, there are three actions a user can take:
Staking
Bonding
Selling
Staking and bonding are considered beneficiary to the protocol, while selling is considered detrimental. Staking and selling will also cause a price move, while bonding does not (we consider buying SB from the market as a prerequisite of staking, thus causing a price move). If both actions are beneficiary, the actor who moves price also gets half of the benefit (+💸). If both actions are contradictory, the bad actor who moves price gets half of the benefit (+💸), while the good actor who moves price gets half of the downside (❌). If both actions are detrimental, which implies both actors are selling, they both get the worst possible outcome (❌)!
Thus, given two actors, all scenarios of what they could do and the effect on the protocol are shown here:
If we both stake (🏦, 🏦), it is the best thing for both of us and the protocol (both users gets the bank).
If one of us stakes and the other one bonds, it is also great because staking takes SB off the market and put it into the protocol, while bonding provides liquidity and SOL for the treasury!
When one of us sells, it diminishes effort of the other one who stakes or bonds.
When we both sell, it creates the worst outcome for both of us and the protocol (❌, ❌)
What is the deal with (3,3) and (1,1)?
If the prior explanation/visualisation did not sufficiently convey it to you, here is an additional version based on numbers.
(3,3) is the idea that, if everyone cooperated in Solbank, it would generate the greatest gain for everyone (from a game theory standpoint). Currently, there are three actions a user can take:
Staking (+2)
Bonding (+1)
Selling (-2)
Staking and bonding are considered beneficial to the protocol, while selling is considered detrimental. Staking and selling will also cause a price move, while bonding does not (we consider buying SB from the market as a prerequisite of staking, thus causing a price move). If both actions are beneficial, the actor who moves price also gets half of the benefit (+1). If both actions are contradictory, the bad actor who moves price gets half of the benefit (+1), while the good actor who moves price gets half of the downside (-1). If both actions are detrimental, which implies both actors are selling, they both get half of the downside (-1). Thus, given two actors, all scenarios of what they could do and the effect on the protocol are shown here:
If we both stake (3, 3), it is the best thing for both of us and the protocol (3 + 3 = 6).
If one of us stakes and the other one bonds, it is also great because staking takes SB off the market and put it into the protocol, while bonding provides liquidity and SOL for the treasury (3 + 1 = 4).
When one of us sells, it diminishes effort of the other one who stakes or bonds (1 - 1 = 0).
When we both sell, it creates the worst outcome for both of us and the protocol (-3 - 3 = -6).
Why is the market price of SB so volatile?
It is extremely important to understand how early in development the Solbank protocol is. A large amount of discussion has centered around the current price and expected a stable value moving forward. The reality is that these characteristics are not yet determined. The network is currently tuned for expansion of SB supply, which when paired with the staking, bonding, and yield mechanics of Solbank, result in a fair amount of volatility.
SB could trade at a very high price because the market is ready to pay a hefty premium to capture a percentage of the current market capitalization. However, the price of SB could also drop to a large degree if the market sentiment turns bearish. We would expect significant price volatility during our growth phase so please do your own research whether this project suits your goals.
What is reward yield?
Reward yield is the percentage by which your staked SB balance increases on the next epoch. You can find this number on the Solbank staking page.
What is APY?
APY stands for annual percentage yield. It measures the real rate of return on your principal by taking into account the effect of compounding interest. In the case of Solbank, your staked SB represents your principal, and the compound interest is added periodically every 8 hours thanks to the rebase mechanism.
One interesting fact about APY is that your balance will grow not linearly but exponentially over time! Example to illustrate the power of compounding: Assuming a daily compound interest of 2%, if you start with a balance of 1 SB on day 1, after a year, your balance will grow to about 1377.
Why does the price of SB become irrelevant in long term?
As illustrated above, your SB balance will grow exponentially over time thanks to the power of compounding. Let's say you buy a SB for $400 now and the market decides that in 1 year time, the intrinsic value of SB will be $2. Assuming a daily compound interest rate of 2%, your balance would grow to about 1377 SB by the end of the year, which is worth around $2754. That is a cool $2354 profit! By now, you should understand that you are paying a premium for SB now in exchange for a long-term benefit. Thus, you should have a long time horizon to allow your SB balance to grow exponentially and make this a worthwhile investment.
What will be SB's intrinsic value in the future?
There is no clear answer for this, but the intrinsic value will be determined by the treasury performance.
Do I have to unstake and stake SB on every epoch to get my rebase rewards?
No. Once you have staked SB with Solbank, your staked SB balance will auto-compound on every epoch. That increase in balance represents your rebase rewards.
How do I track my rebase rewards?
To follow your rebase rewards, navigate to the Solbank dApp, connect your Phantom or Solflare wallet, and select the Stake tab, followed by the Stake history sub-tab.
What is coin farming and how does it benefit meme coin communities with APY up to 115% and beyond rewards?
Coin farming allows you to deposit your meme coins in our designated pools. In return, you'll earn additional meme coins as rewards based on your staked amount. APY (annual percentage yield) up to 115% and beyond is designed to incentivize participation, attract users, and increase liquidity, ultimately bolstering the entire meme coin ecosystem by stabilizing prices and fostering long-term holding.
Where are the 2% stake/unstake fees allocated, and how is the security of these tokens ensured?
All collected fees are directed to the Solbank Treasury, which is secured by a multi-signature (multi-sig) wallet, a robust security mechanism requiring multiple approvals for any transaction. The total revenue generated is transparently displayed on our dashboard.
How does Solbank intend to utilize the fees collected from meme coin staking?
Beyond covering operational costs and revenue sharing, we strategically reinvest collected fees to fuel platform growth, enhance stability, and maintain revenue retention. This includes gaining exposure to the potential upside of underlying meme coins acquired through fees.
Are the collected fees or farming rewards subject to any lockup periods?
No, both the fees collected and the rewards earned through farming and staking are immediately available for use or withdrawal. However, the minimum required amount of farming rewards to claim is 0.01 SB.
What can we do with the $SB tokens earned from yield?
The $SB tokens you earn are entirely yours to manage. You have the flexibility to hold them, trade them on exchanges, or stake them on Solbank to earn additional $SB at an attractive APY.
Could you elaborate on the mechanics of your farming model and its sustainability over time?
During our initial bootstrapping phase, we offer high APYs (up to 2036.41% and beyond for staking SB token and up to 115.16% and beyond APY for meme tokens farming) to attract early adopters and build liquidity. Once the SB supply reaches its cap, we'll transition to a sustainable model based on real yield and revenue sharing, ensuring the platform's long-term growth and stability.
How does Solbank plan to maintain and support the price of the $SB token?
We have implemented several strategies to support the $SB token price:
Desynchronized Rebase Concept (DRC): Reduces selling pressure on the market.
Smart Bond Issuance: Controls token supply and mitigates dilution risks.
Strategic APY Adjustments: Attracts investment and maintains healthy liquidity levels.
Capped Supply: Ensures a controlled expansion of the token supply.
Protocol Owned Liquidity (POL): Maintains consistent exit liquidity for token holders.
Treasury Investments: Utilizes profits and revenue-sharing streams to bolster the treasury.
Over-The-Counter (OTC) Trading: Facilitates large transactions with minimal market impact.
The advertised APY seems exceptionally high. Could you explain how this is achievable while ensuring sustainability?
The high APYs are strategically offered during our initial bootstrapping phase to incentivize early participation and rapidly build liquidity. As the platform matures and the $SB supply cap is reached, we'll transition to a more sustainable model based on real yield and revenue sharing.
What specific security measures are in place to safeguard the platform and user funds from potential exploits?
We employ multiple layers of security, including utilizing Squads treasury management for robust fund protection, active backend monitoring by our development team, and continuous feedback from our community to identify and address any potential vulnerabilities.
Have your smart contracts undergone any third-party audits? If so, by whom, and where can I find the audit reports?
While our contracts have not undergone formal third-party audits, Solbank is an entirely in-house developed product built from the ground up with meticulous attention to security best practices. Additionally, our dapp is whitelisted by Blowfish via Phantom, signifying a degree of trust and security within the ecosystem.
Is the SolBank team publically identified (doxxed)?
For personal and professional reasons, our team members choose to remain anonymous. However, our extensive experience in traditional finance and financial technologies ensures we prioritize compliance and adhere to regulatory frameworks while driving innovation in the DeFi space.
Could you provide more details about the team's past experience and qualifications?
Our team possesses a wealth of experience in traditional finance and cutting-edge financial technologies. This diverse background equips us with the knowledge and expertise necessary to build a robust, secure, and compliant DeFi platform.
Are there any fees associated with claiming or withdrawing earned $SB rewards?
No, there are no fees for staking, unstaking, or claiming $SB rewards. The only fees incurred are for depositing into or withdrawing from the farming pools.
How are staked tokens and the platform's $SB pool protected from potential hacks or unauthorized access?
We employ Squads treasury management to safeguard staked assets and the platform's $SB pool. While no system is entirely invulnerable, our development team is vigilant in monitoring for potential vulnerabilities and continuously updates the platform to maintain high security standards.
Who has control over the token supply and staked assets? Is it a single individual, or is there a multi-sig wallet in place?
All funds within the liquidity pools and the treasury are secured behind a multi-sig wallet, which requires the approval of 3 out of 5 designated signatories to authorize any transaction. This multi-sig structure prevents a single point of failure and ensures that no individual can act unilaterally.
Is there a lockup period or vesting schedule for $SB tokens before they can be sold, or can they be sold immediately upon earning them?
There are no lockup periods for $SB tokens earned through farming or staking. You have the freedom to sell them immediately if you choose. However, tokens acquired through bonding are subject to a linear vesting period of 5 days.
Does selling my earned $SB tokens immediately have any impact on my ability to participate in future staking opportunities?
No, selling your $SB tokens does not affect your ability to participate in future staking activities on the platform. You are free to stake and unstake your tokens as often as you like.
Are there any concerns regarding $SB wallet stability or regulatory compliance that users should be aware of?
We have taken proactive measures to ensure wallet stability and adhere to regulatory compliance standards. By following established best practices and maintaining anonymity, we minimize potential risks and prioritize the security of user funds.
What other meme coins are currently available for farming on Solbank?
We offer a variety of meme coins for farming. Please visit our platform to see the current selection and their respective APYs.
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