Answers to common questions about HOM DAO
What is HOM DAO?
HOM DAO is the creator of the HOM-NFT minting platform, the HOM token, the HOM Protocol, and HOM Vote-to-Earn Staking Program. The HOM-NFT minting platform empowers owners to make a utility-based NFT of their property and create a decentralized, blockchain-based land registry, seperate from government. The HOM protocol allows HOM-NFT owners to bond their property in exchange for HOM tokens, acquire a property with a crypto-backed loan, and rent out your property. The Protocol also enables HOM token owners to stake their tokens for compounded returns. You will also be able to use the Protocol to buy or refi the property of your dreams.
What is the point of HOM DAO?
Our community’s mission is to help provide access to safe, sustainable housing for everyone.
How do I participate in HOM DAO?
Presently, you can join the DAO. The minimum contribution to join the DAO is 100 USDC. In exchange you will receive pHOM tokens. You can also make larger contributions to receive more tokens. pHOM will convert to HOM on a 1:1 basis at the public launch of HOM. The public launch is estimated in Q2l 2022 with an initial offering price estimated at $3-$5 per HOM, although pricing and timing are subject to change at any time..
How can I benefit from HOM DAO?
The HOM Protocol will empower people to buy or refinance a property using the HOM Protocol through the HOM Equity Liquidity Pool (HELP). By leveraging the HOM protocol in a concurrent closing, the HELP program will empower people to buy and refinance their property without a credit check or downpayment. The HELP program’s goal is to make it possible for anyone anywhere to access safe, comfortable, sustainable housing.
The HOM Protocol will also make it possible for you to build wealth through staking activities which result in compounded returns which accrue over time. Beyond passive income, the value of HOM may also go up over time, helping accelerate your personal abundance.
Who runs HOM DAO?
HOM DAO is a Decentralized Autonomous Organization, so no single individual or group, rather the DAO operates as one collective body. HOM DAO is DAO-governed. Every decision is created by community members on the forum and made by token holders through Snapshot voting.
Why do we need HOM DAO? Currently there is a chasm between DeFi and real estate. HOM DAO exists to bridge that gap and provide tools for you to build wealth, buy property, and generate passive income. Our community’s mission is to help solve access to safe, comfortable, sustainable housing for everyone, everywhere.
Is HOM a stablecoin?
No, HOM is not a stablecoin; it is a governance token. Because the DAO treasury assets are based primarily on real estate, instead of crypto, HOM provides tangible benefits to owners. Additionally, as the value of the HOM token increases, more property is acquired by the DAO to support the higher valuations. The goal is for every HOM token to be backed up by at least 25% of its value in actual real estate assets. The Bonding and Staking periods in HOM are also different in that the minimum bonding periods are much longer (typically months or years, instead of ETH epochs) and the staking awards are greater for HOM owners who take their tokens for longer periods of time. The DAO’s goal with this is to reverse the short-term staking and flipping inherent to the first generation of bond-stake platforms.
What is a HOM-NFT?
A HOM-NFT is a NFT that contains meta-data for a specific property and a series of smart contracts that allow the property to be exchanged for HOM tokens over a period of time (bonding period).
Can anyone make a HOM-NFT?
Yes. Anyone can make a HOM-NFT as it is a permissionless platform. However, approval of a HOM-NFT requires validation by a third-party, including proof of title, or proof of purchase agreement, insurance, and many other elements.
What is Staking?
Staking is the primary value accrual strategy of HOM DAO. Stakers stake their HOM tokens on homdao.finance to earn rebase rewards. The rebase rewards come from the proceeds from bond sales, and can vary based on the number of HOM staked in the protocol and the reward rate set by monetary policy. Staking on the HOM protocol requires that HOM owners vote to receive any awards. So the terms staking and vote-to-earn as used collectively when describing the protocol.
Staking allows you to earn HOM through the act of voting and via auto-compounding. When staking your HOM,, you receive vHOM (staked HOM) in return at a 1:1 ratio. After that, your vHOM balance will increase automatically on every epoch (8 hours) based on the current APY.
vHOM is transferable and therefore composable with other DeFi protocols.
When you unstake, you burn vHOM and receive an equal amount of HOM tokens. Unstaking means the user will forfeit the upcoming rebase reward. Note that the forfeited reward is only applicable to the unstaked amount; the remaining staked HOM.
What is Vote-to-Earn?
HOM DAO has pioneered the concept of Vote-To-Earn Staking. In order to receive staking awards, DAO members have to vote at least monthly. There are other activities that the DAO may from time to time deem as beneficial to the community which can also apply in the vote-to-earn model.
What is Bonding?
Bonding is the secondary value accrual strategy of HOM DAO. When users bond HOM tokens, they are actually selling their assets in order to buy a bond from the protocol. Bonding Actions are a cross between a fixed income product, a futures contract, and an option. The protocol quotes the bonder with terms for a trade at a future date. These terms include a predefined amount of HOM the bonder will bond and the time when vesting is complete. The bond becomes redeemable as it vests. I.e. in a 5-day term, after 2 days into the term 40% of the rewards can be claimed.
Bonding is an active, short-term strategy. The price discovery mechanism of the secondary bond market renders bonds discounts more or less unpredictable. Therefore bonding is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking.
Allowing users to purchase bonds through bonding allows HOM DAO to accumulate its own liquidity. We call our own liquidity POL. More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders.
What are PCV, NAV, Multiple and why are they important?
PCV Protocol Controlled Value, is the amount of funds the treasury owns and controls. The more PCV the better for the protocol and its users. NAV Net Asset Value per token is the sum of an enterprise's total assets less any liabilities divided by the number of issued tokens. Any difference between the NAV token price and actual trading price is called market premium or can be quantified as a Multiple.
Positive delta also has a quantifiable basis in that the token price may contemplate the concept of a trading multiple. Since HOM DAO realizes revenue from HOM-NFT minting, software licensing, loan fees, and interest, and staking of treasury reserves to generate additional yield, a multiple of value above NAV may be incorporated to the token price to reflect revenue growth in addition to passive assets.
What happens if there is a “bank run” on HOM DAO?
There are several safeguards built into the HOM Protocol that were designed to prevent the kind of adverse spiral that have been observed in other bond-stake protocols. HOM DAO plans to include four specific defensive measures in the HOM Treasury that are unique to the protocol, including:
- 1.The bonding contracts for HOM are much longer (generally measured in years) than bonding contracts for most crypto projects which are measured in hours/days.
- 2.It is envisioned that the real estate treasury reserve requirements of HOM will be rebased every quarter to be no less than 25% of the token price. This is vastly higher than the $1 USD per token requirement of other OHM forks. With a vastly greater reserve requirement in place, there should be a greater defense against a “bank run” scenario against the HOM treasury in a sell off.
- 3.HOM is unique in that it provides Staking contracts that provide greater rewards to longer-term contracts. Early withdrawals can subject the staking awards to the equivalent of an early withdrawal penalty. The highest APY is paid for 12-month staking terms. Terms less than 12 months receive a baseline 20% APY, based on the return schedule approved by the DAO in May 2022. Additionally, staking awards are subject to vote-to-earn criteria.
- 4.When selling a HOM token, the smart contract is designed such that either 5% of the sales price will be retained by the HOM Treasury. So if the token owner sells their HOM token for 50 USDC, 2.50 USDC is collected by the treasury. This creates an additional buffer designed to stabilize the treasury in a sell-off scenario. It also provides additional funds for the treasury to bond and buy more property.
What is APY and why is it different from APR?
APY stands for annual percentage yield, versus APR, which is annual percentage rate. APY measures the real rate of return on your principal by taking into account the effect of compounding interest. In the case of HOM DAO Protocol, your staked HOM represents your principal, and the compound interest is added periodically on every epoch (24 hours) thanks to the rebase mechanism.
One interesting fact about APY is that your balance will grow not linearly but exponentially over time! Assuming a daily compound interest of 1%, if you start with a balance of 1 HOM on day 1, after a year, your balance will grow to 38 HOM in the course of a year (a 38X return!).
What is a rebase?
HOM Protocol uses the term rebase to describe two activities.
When used in terms of treasury management, rebase is the method through which the protocol rebases the treasury to ensure that there is 25% coverage in real estate or stablecoins versus the token price. The goal of HOM DAO is to have treasury rebasing conducted on a monthly basis, but for the first 24 months of the project, treasury rebasing may be done on a quarterly basis
When used in staking, rebase means the value at which HOM token balance increases. So if you compound your yield payments from staking each day, a reward yield rebase occurs the next day that includes any interest paid in the last 24 hours. That is added to your prior balance (rebased) and provides a new base value on which the next day’s yield payment will be calculated.
Of note here, due to the way the protocol works, when a HOM Token owner stakes their HOM, they actually receive a new type of token called vHOM. So they only vHOM balance instead of a HOM balance. But DAO members need not get confused. 1 vHOM is always equal to 1 HOM.
Do I have to unstake and stake HOM on every epoch to get my rebase rewards?
No. Once you have staked HOM with HOM Protocol, your staked HOM (vHOM) balance will auto-compound on every epoch. That increase in balance represents your rebase rewards. If you do not vote or conduct other activities as required by the DAO there is no award issued in this program.
Last modified 1yr ago