Technical Appendix

This appendix makes the PCA program fully evaluable from the docs. It explains the model inputs, allocation logic, yield math, revenue baselines, and how everything translates into buybacks, burns, unlocks, and potential supply outcomes. All figures are illustrative and subject to market conditions.

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Warning
Nothing here is investment advice. Backing allocations and rates are variable. Yields are not guaranteed.

A) Methodology & Assumptions

Objective. Estimate the annual dollars available to retire FT from (i) backing yield and (ii) protocol revenue & fees, then translate those dollars into FT retired under different average buyback prices. Also show Withdraw/Exit scenarios and their supply effects.

Allocation approach (illustrative, conservative, liquid, no leverage):

• Major stables (Aave v3 supply)
• stETH (ETH staking)
• jupSOL (SOL LST)
• AVAX staking
• sUSDe (for USDe)

Approximate mix: ~½ in stables, balance across staked ETH/SOL/AVAX and sUSDe exposure. Policy weights may evolve with liquidity, rates, and risk.

Cadence & accounting.

• Backing yield accrues continuously on‑chain.
• First, it funds the ecosystem development budget (salaries/marketing/infra/ops).
• Remainder flows to buyback‑and‑burn.
• Protocol revenue & fees from the product suite are routed to buybacks and also govern unlocks (see Section E).
• Redemptions (Exit) burn FT; Withdrawals invalidate PUTs and release backing for buybacks.

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B) Backtested Yield (12‑Month Illustrative; $1.0B PCA)

Estimated annual carry by component (USD):

Component	Annual carry (USD)
Aave v3 – USDC	$6.58m
Aave v3 – USDT	$6.04m
Aave v3 – USDS (proxy)	$4.38m
sUSDe	$9.43m
stETH	$9.00m
jupSOL	$6.70m
AVAX staking	$2.15m
Total	$44.27m

Yield → Burn Conversion

If annual backing‑carry surplus available for buybacks is $Y$ dollars and the average buyback price is $P$ dollars per FT, then:

$$FT_{retired\_from\_yield} \approx Y / P$$

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Note
The surplus $Y$ is after funding the ecosystem development budget $E$. With total carry $B$, we have $Y = \max(B − E, 0)$.

Sensitivity for $P = \$0.10$ (illustrative):

Ecosystem budget E	Surplus Y = max(44.27 − E, 0)	FT retired (Y / $0.10)
$0.00m	$44.27m	442.7m FT
$10.00m	$34.27m	342.7m FT
$20.00m	$24.27m	242.7m FT
$30.00m	$14.27m	142.7m FT
$40.00m	$4.27m	42.7m FT
≥$44.27m	$0.00m	0 FT

Other average prices (same $Y$):

• $P = \$0.05 \rightarrow FT \approx 2 × (Y / 0.10)$
• $P = \$0.20 \rightarrow FT \approx 0.5 × (Y / 0.10)$

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C) Protocol Revenue & Fee Capture (Illustrative Baselines)

These baselines allocate a conservative market‑share across product verticals near ~$1B TVL/activity.

Revenue Baseline (illustrative)

• Perps/CLOB analog: $57.00m
• Lending analog: $2.87m
• Delta‑neutral stable/hedging analog: $3.16m
• AMM fee‑switch analog: $18.38m

Total ≈ $81.41m → at P = $0.10, ~0.814b FT retired annually.

Fee Distribution (token‑first integration; alternative lens)

• Perps/CLOB analog: $58.00m
• Lending analog: $17.53m
• Delta‑neutral/hedging analog: $31.63m
• AMM fee‑switch analog: $18.38m

Total ≈ $125.54m → at P = $0.10, ~1.255b FT purchased annually.

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Depending on product mechanics, users can still receive the same yield %, with distributions delivered in FT while buybacks are executed in the background.

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D) Withdraw / Exit Scenarios: Supply Effects

• Withdraw (invalidate PUT; keep FT): releases backing equal to the original contribution for that portion. At average buyback price P:

$FT_{retired\_from\_withdrawals} \approx Released\_backing / P$

Illustrations at P = $0.10:

• $100m released → ~1.0b FT
• $250m released → ~2.5b FT
• $500m released → ~5.0b FT
• Exit (redeem at par; FT burned): reduces circulating and total supply directly by the redeemed FT amount. Redeemed backing is returned to the holder in the same asset and amount as contributed.

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E) Unlock Logic: Alignment

• Only revenue‑funded buybacks unlock Foundation/Team/Ecosystem/Incentives one‑for‑one, at 40:20:20:20.
• Backing‑yield‑funded buybacks do not trigger unlocks.
• There is no inflation beyond PCA minting; unlocks are releases from pre‑allocated buckets tied to real revenue performance.

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F) One‑Year Combined Illustration (for Intuition)

Assume a $1.0B PCA:

1. Backing carry total: $B \approx \$44.27m$. After funding ecosystem development $E$, suppose $Y = \max(B − E, 0)$ remains for buybacks → retires $Y/P$ FT at average price $P$.
2. Revenue baseline: ≈ $81.41m → ~0.814b FT retired at P = $0.10.
3. Withdrawals: if 25% of original capital is Withdrawn, ~$250m of backing is released → ~2.5b FT retired at P = $0.10.

These forces combine: yield surplus + revenue + withdrawals can retire a substantial share of supply in year one. Outcomes are path‑dependent and sensitive to prices, volumes, budgets, and adoption.

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G) Quick Reference: Key Formulas

PCA minting: $FT_{minted} = 10 \times USD_{equivalent\_contributed}$

Yield surplus after ecosystem budget: $Y = \max(B − E, 0)$

Yield → burn: $FT_{retired\_from\_yield} ≈ Y / P$

Withdrawals → burn: $FT_{retired\_from\_withdrawals} ≈ Released\_backing / P$

Revenue → burn: $FT\_{retired\_from\_revenue} ≈ Revenue\_allocated\_to\_buybacks / P$