FAQ

What is LIFE? 🧬

A new, category-defining asset class allowing smart investors to build their wealth by hedging. It is a decentralized treasury-backed currency on AVAX that maintains a value of at least 1$ USD. However, LIFE is not pegged to anything and therefore can have a value worth more than 1$ USD providing its holders with a potential for great upside.

Why does LIFE exist? 🔬

The world of cryptocurrencies is filled with speculation, market volatility and unpredictability. Investors are therefore exposed to extremes of skepticism (weak hands) and overestimation (diamond hands). LIFE is a new asset class that introduces the middle ground by allowing smart hands to hedge.

By having its own monetary policy and a cohort of new projects stabilizing the currency, it solves many of the problems inherent to fiat currencies that are flawed by their lack of underlying value, centralization & association with the interests of governments.

How does LIFE work? 🔮

It is a currency backed by multi-asset stablecoins. It is a currency of which the treasury and reserve are protocol controlled. It is a currency driven by a community-governed protocol.

At a high level, LIFE consists of its protocol managed treasury, protocol owned liquidity, bond mechanism, and high staking rewards that are designed to control supply expansion.

Bond generates profit for the protocol, and the treasury uses the profit to mint LIFE and distribute them to stakers. With LP bond, the protocol is able to accumulate liquidity to ensure the system stability.

How does LIFE differ? 🧩

LIFE allows investors to make money during bear markets as it is always backed, fully decentralized, provides stable yields and facilitates transactions at an unprecedented pace. LIFE differs by being an interest earning, community driven token with extensive liquidity and competitive incentives.

Is LIFE a stablecoin? 💵

No, LIFE is not a stable coin. Rather, LIFE aspires to become an algorithmic reserve currency backed by other decentralized assets. Similar to the idea of the gold standard, LIFE provides free-floating value its users can always fall back on, simply because of the fractional treasury reserves LIFE draws its intrinsic value from.

Is LIFE Pegged to the dollar? 💵

No. Each LIFE is backed by 1 USDT, not pegged to it. Because the treasury backs every LIFE with at least 1 USDT, the protocol would buy back and burn LIFE when it trades below 1 USDT. This has the effect of pushing LIFE price back up to 1 USDT. LIFE could always trade above 1 USDT because there is no upper limit imposed by the protocol. Think pegged == 1, while backed >= 1.

You might say that the LIFE floor price or intrinsic value is 1 USDT. We believe that the actual price will always be 1 USDT + premium, but in the end that is up to the market to decide.

Who controls the funds?

As the protocol controls the funds in its treasury, LIFE can only be minted or burned by the protocol. This also guarantees that the protocol can always back 1 LIFE with 1 USDT. You can easily define the risk of your investment because you can be confident that the protocol will indefinitely buy LIFE below 1 USDT with the treasury assets until no one is left to sell. You can't trust the FED but you can trust the code.

As the protocol accumulates more liquidity, more runway is guaranteed for the stakers. This means the stakers can be confident that the current staking APY can be sustained for a longer term because more funds are available in the treasury.

What is a rebase?

Rebase is a mechanism by which your staked LIFE (sLIFE) balance increases automatically. When new LIFE are minted by the protocol, a large portion of it goes to the stakers. Because stakers only see staked LIFE (sLIFE) balance instead of LIFE, the protocol utilizes the rebase mechanism to increase the staked LIFE (sLIFE) balance so that 1 staked LIFE (sLIFE) is always redeemable for 1 LIFE.

What is reward yield?

Reward yield is the percentage by which your staked LIFE (sLIFE) balance increases on the next epoch. It is also known as rebase rate.

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 LIFE, your staked LIFE (sLIFE) represents your principal, and the compound interest is added periodically on every epoch, 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 2%, if you start with a balance of 1 LIFE on day 1, after a year, your balance will grow to about 1377.

Why should I stake LIFE?

Your LIFE balance will grow exponentially over time thanks to the power of compounding. Let's say you buy a LIFE for $400 now and the market decides that in 1 year time, the intrinsic value of LIFE will be $2. Assuming a daily compound interest rate of 2%, your balance would grow to about 1377 LIFEs 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 LIFE now in exchange for a long-term benefit. Thus, you should have a long time horizon to allow your LIFE balance to grow exponentially and make this a worthwhile investment.

What will be LIFE's intrinsic value in the future?

There is no clear answer for this, but the intrinsic value can be determined by the treasury performance. For example, if the treasury could guarantee to back every LIFE with 100 USDT, the intrinsic value will be 100 USDT. It can also be decided by the DAO. For example, if the DAO decides to raise the price floor of LIFE, its intrinsic value will rise accordingly.

How does the protocol manage to maintain the high staking APY?

Let’s say the protocol targets an APY of 100,000%. This would translate to a rebase rate of about 0.6328%, or a daily growth of about 2%. If there are 100,000 of LIFE staked right now, the protocol would need to mint an additional 2000 LIFE to achieve this daily growth. This is achievable if the protocol can bring in at least 2000 USDT daily from bond sales. If the protocol fails to achieve this, the APY of 100,000% cannot be guaranteed.

Do I have to unstake and stake LIFE on every epoch to get my rebase rewards?

No. Once you have staked LIFE (sLIFE) with LIFE, your staked LIFE (sLIFE) balance will auto-compound on every epoch. That increase in balance represents your rebase rewards.

Audit

Life Dao is currently unaudited ! We are a fork of Olympus DAO on avalanche net work, audits will occur at a later stage. Stay Cautious !