SCATDAO will never accept any money from any dApp to audit their projects, the funding will be generated entirely by the investments that the treasury has made into various DeFi projects to generate a return. Initially, the plan is to provide liquidity to Decentralized Exchanges as the sole source of income. Liquidity providers are given a percentage of the fees the DEX generates through its trades. This will accomplish our need to generate income for operations while also creating sufficient liquidity for people who would like to trade our token. A big issue with new tokens that limits their ability to grow is a lack of liquidity. By providing liquidity internally, we will ensure that people can buy and sell the token without creating wild price swings.
We have 30% of all tokens reserved for the SCATDAO treasury. At the launch of SCATDAO, half of those tokens (15%) will be sold and converted into ADA. When providing liquidity, you need to do it in pairs, so half AUDIT and half ADA. The treasury will not be able to provide liquidity if it only holds AUDIT. Therefore a sale to the general public will be necessary to generate the ADA to create the trading pair. The income generated by these treasury investments will fund operations.
SCATDAO will be setting up a stake pool for three primary reasons. To assist and support Cardano’s decentralization, to create an additional source of revenue to fund audit operations, and to distribute our tokens for free to the community. The first two points are fairly straightforward but would like to make it clear that this stake pool is owned and operated by the DAO, not the Dev team. All revenue generated from it goes directly into the treasury to fund our audits. The last point is meant to be a way to distribute SCATDAO to people who support the project and get tokens into as many hands as possible. We do not want the DAO to be controlled by early investors with deep pockets who can afford to buy as much as possible and have a disproportionate say in our operations. We would like the entire Cardano community to be involved and have a say in what we do. Therefore, anyone who stakes to our stake pool will still receive their regular staking rewards in ADA, but will also receive a bonus of AUDIT tokens as well. This will not be the typical Stake Pool Offering where we keep the ADA and give you our token in return. We feel that the normal revenue we earn from operating the stake pool is enough reward and keeping all the ADA would be unfair to our supporters. Finally, we will limit ourselves to only a single stake pool to help encourage and promote decentralization within the Cardano ecosystem. If the pool becomes saturated, we will explore raising the fee or partnering with other single pool operators.