A51 Finance
  • ⚡A51 Yield Supercharger
  • ⭐A51 Liquidity Automation Engine
  • Overview
    • The A51 Finance Thesis
    • Protocol Architecture
    • 🌎A51 Ecosystem
    • Legacy as Unipilot (v2)
  • Protocol Features
    • Market Modes
    • Advanced Modes
    • Rebalancing Mechanisms
    • Single-Asset Deposit
    • Zap In
    • Boosted Positions
    • Strategies Marketplace
    • A51 Managed Vaults
  • Liquidity Automations
    • Market Modes
    • Advanced Modes
  • Example Strategies
    • Volatility-Hedged Yield Maximization Strategy
  • Tokenomics
    • FOO Tokenomics
      • 📃Background
      • 🗳️Become a Voter
      • 🪙What is $oA51?
      • 🪜Voting Mechanism
      • 💰Earn Revenue in $ETH
      • 📈Maximize Your Rewards
    • $A51 Token
    • Revenue Model & LPs
    • A51 Utility
    • Governance
    • Incentives
    • Token Distribution & Vesting
  • AMMs Support
    • Uniswap v3 and other AMMs
    • Uniswap v4
  • V2 Docs
Powered by GitBook
On this page
  • Overview
  • Conversion Process
  • Benefits of $oA51
  1. Tokenomics
  2. FOO Tokenomics

What is $oA51?

Overview

$oA51 is an options token within the FOO tokenomics system. It allows holders to purchase $A51 tokens at a discounted price, aligning the interests of farmers and token holders, ensuring more sustainable liquidity provision.

Conversion Process

Users can convert their $oA51 tokens to $A51 at a discounted price by purchasing with $WETH. Initially, the discount starts at 50%, but this is something that $A51 holders would be able to vote to change in the future.

Benefits of $oA51

Offering $oA51 as a reward ensures:

  • Reduced likelihood of farmers dumping $A51 rewards.

  • Increased ownership for liquidity providers.

  • Optimized protocol ownership over time.

Example of $oA51 Conversion

Suppose the price of $A51 is $100, and there is an option token, $oA51, that gives its holder the perpetual right to buy $A51 at 50% of the market price. The protocol issues 1 $oA51 to a farmer, Alice, who immediately exercises the option to buy 1 $A51 for $50 and sell it on a DEX for $100. The resulting gains and losses are as follows:

  • The Protocol: -1 $A51, +$50

  • The Farmer Alice: +$50

  • The DEX LPs: +1 $A51, -$100

Compare this to regular liquidity mining where the farmer doesn’t pay anything to the protocol:

  • The Protocol: -1 $A51

  • The Farmer Alice: +$100

  • The DEX LPs: +1 $A51, -$100

When option reward tokens are used in FOO, where the farmers are also the token LPs, the tally becomes:

  • The Protocol: -1 $A51, +$50

  • The Farmer-LP: +1 $A51, -$50

This means that as the farmers receive $oA51 rewards, they get the right to buy tokens from the protocol at a discount and increase their ownership. Over time, protocol ownership will shift away from holders who aren’t providing liquidity to those who are, optimizing protocol ownership.

PreviousBecome a VoterNextVoting Mechanism

Last updated 9 months ago

🪙