FaaS stands for Farming-as-a-Service. (Reality is that, most of ‘FaaS’ projects are not doing only farming, but they actively trade and invest as well. Since there are few income streams rather than just farming, it’s also called IaaS, which stands for ‘Investing-as-a-service’)
Call it whatever you want, but the core idea of any FaaS/IaaS is the same: holders get exposure to reflections and dividends of a certain project. What are reflections and dividends you might ask?
Depending of how project is structured, there might be differences in how holders are rewarded. In this particular thread, I will use $ABC (Alpha Brain Capital) as an example
With each purchase of $ABC tokens, buyers are taxed 10% on it. Those tokens are then spread among the holders, at the moment paid out in ETH. Claim reflections whenever you like - after few days, weeks or months. Let it grow and always consider gas fees!
Like the buyers buyers, sellers are also taxed 10% on their transaction, but in this case tax goes to project’s treasury. Currently it’s split between marketing budget and treasury (farming, investing, trading), so 5% each way. Holders are benefiting from both!
People buy → holders profit directly from 10% tax split amongst them.
People sell → 5% goes to treasury which is used to earn money for project’s holders, which is then distributed in form of ‘dividends’.
Dividends: Unlike reflections, dividends are not paid directly because that income doesn’t come from taxes. Depending of project’s philosophy, dividends can be paid out at certain milestones.
While income from reflections can be roughly estimated (based on buy volume/day), dividends are bit different. Project’s farmers/investors/traders are playing important role here and treasury growth depends on their performance.
Up until now, investing in any project, price action had direct impact on our investment; if green, we usually profit, if red… What if we could profit from ‘red days’ as well?
It’s to be expected that people sell part or all of their holdings at some point and take profits. Nobody can guarantee that project’s price is going to appreciate infinitely, but now we can all profit from sellers and stay calm during ‘red days’!
Considering that FaaS projects are still very fresh and ‘early’, there is high volatility and it might not be easy to watch. At the moment of writing this thread, $ABC has only ~1000 total holders and mcap of $8MM.
I think it’s very important that you fully understand the FaaS concept and how early FaaS is in general so volatility doesn’t mess with you. High conviction (diamond hands) and patience is required.
And most of all: Diversification is king! There are many similar projects out there ($refi, §roarund e.g.) it is difficult to bet on the right ones. From my point of view, it makes sense to make a pie out of it.
If you ever wanted to ‘be early’ in something, this is the perfect opportunity! What do you guys think?