Treasury Reserve

The Carrot Fndn’s Treasury will be funded initially from Ecosystem Fees and a built-in incentive mechanism that retains tokens in situations where recycling supply chains have not been fully tracked from from the Recycler all the way to the source (Waste Generator). In such scenarios the TRC value that would have been distributed in $CARROT to a Waste Generator and a Bin Custodian flows to the Carrot Fndn Treasury as well as a cut of the value that would flow to Haulers, Processors and Recyclers if they were using $CARROT technology to track waste source to the Generator. Because most Hauling operations today are not tracked to the Generator, the Carrot Fndn Treasury should be receiving sufficient fees to help fund its investment in growth. Once a recycling supply chain becomes fully digitized, the Carrot Fndn would not receive the added fees from the incentive mechanism as it would have done its part.

Treasury management and diversification are top concerns for the Carrot Fndn and Carrot DAO. A publication by Blockworks[87] demonstrates its importance and how DAOs have poorly managed their resources to date. While we believe in our ecosystem’s potential for growth and the value that can accrue to the protocol, a healthy level of diversification that can sustain external shocks (crypto winters or economic downturns) is required. The diversification amount will be a continuous matter of discussion for the Carrot Fndn and Carrot DAO, but $CARROT buy-backs to offset $CARROT distribution from TRC and TCC minting will likely not begin until a healthy diversification reserve has been established. Fortunately, Carrot Fndn Treasury management will come with some level of natural diversification, as TRC and TCC sales to corporations and organizations will likely be paid for in fiat or stablecoins.

87. Blockworks: DAOn Bad post