Proposal: Create a treasury and fund it using Service Fees on the AADA protocol

  • Approve
  • Disapprove

0 voters


The following thread aims to bootstrap the implementation of a service fee strategy on the Aada Finance protocol. The protocol will fund a treasury to support the project and incentivize the $AADA token holders by introducing a principal platform fee on collected loan repayments and liquidations.


Ensuring a high retention level for the $AADA token holders is of utmost importance for Aada Finance. In this regard, introducing a service fee will complement a fully-fledged buyback strategy for $AADA.
The collected ADA from platform fees will be used to:

  • Use 50% of the profit to buy $AADA on the open market;

  • Store all tokens in a DAO treasury to create scarcity;

  • Incentivize the community to hold onto their tokens and thus increase the demand for $AADA.

That way, the treasury would help maintain the security and growth of the dApp. Token holders will receive a portion of the collected fees and have a say in deciding what to do with the rest of the treasury - distribute it, fund the protocol development, marketing, or other. Ultimately, the strategy will promote the organic community growth of long-term supporters and create more use cases for $AADA.

Problem solution

  1. Introduce:
    a. 2% fee on collected interest from all repaid and liquidated loans.
    b. Plus a linear 1 ADA fee from the borrower when creating a request (to be refunded if the request is canceled)
    c. And a 1 ADA fee from the lender when withdrawing.

  2. Convert 50% of the collected ADA to AADA and deposit all tokens in a treasury.

  3. Airdrop the accumulated ADA to all AADA token holders on a monthly basis. The reward amounts should be determined by the percentage of tokens held based on the circulating token supply.

Note: Display the data from a specific user perspective. i.e., Show only relevant information.

Example: If a borrower is trying to take a 1000 ADA loan with a 7% interest. The lender should see a 1000 ADA loan with a 6.86% at the app’s Market page since he/she is making a decision based on the earned interest ( Total interest - fees). And show accumulated interest based on the 6.86% number on the lender’s Dashboard ( Since that’s what is relevant to the lender).
All details (including fees) should still be visible at the NFT bond check.

The team has to provide monthly statistics on the amount of ADA collected and burned, the amount of AADA bought (price, market, market fees, etc.), and stored and distributed tokens (if yes).


The community’s commitment to ensuring the protocol’s safety and growth is crucial for every DeFi platform. For this reason, it’s essential to implement a proper method for sustainable funding and increase the $AADA token’s utility. Besides, the buyback incentive will keep the circulating supply low and the demand high, attracting more users and investors.

Voting should be considered approved/disproved only if 10% of the circulating supply participates in the voting. The 10% of circulating supply is ~1.05M AADA.


Community members’ proposals (Alexander Legolas, Decaf & others) on implementing protocol fees and profit sharing.

Other References (Protocol Fees):
Swaps - 0.3% to the Liquidity Provider (LP) Fee + 2% Batcher Fee + Network Fee

Indigo Protocol
Withdraw from CDP - 2% + Network Fee
Stability Pool Account Adjustment/Rewards Withdrawal Fee - 1 ADA + Network Fee
Open New CDP - 2 ADA + Network Fee
Create Stability Pool Account - 5 ADA + Network Fee

Lending Pond
Borrowing/Lending - 1% Principal Fee with a minimum threshold of 4 ADA + Network Fee

Voting should be considered approved/disapproved only if 10% of the circulating supply is used in the voting. The 10% of circulating supply is ~1.05M AADA.

Proposal Reviewers and Contributors: Dado, Alexander Legolas, Mazen Khaddaj, neophyte, Decaf, Trainacomin


Thanks to everybody who gave an opinion and/or helped write the proposal. I just want to point out we need a more technical elaboration on the following steps to make everything even clearer:
Regarding point 2: Explain how the collected fees will be used to buy $AADA on the open market and store them in the treasury. Provide details about the specific process that will be used to convert the collected ADA to AADA, and specify the criteria that will be used to determine the amount of AADA that will be bought.
Regarding point 3: Describe the airdrop mechanism that will be used to distribute the accumulated ADA to $AADA token holders. Include information about how the reward amounts will be calculated and how often the airdrops will occur.


Regarding point 2: I suggest the following:

  • Create a smart contract to hold all collected service fees temporarily, and Lock them for a time period.
  • After the time period ends:
    • Do a snapshot of AADA holdings.
    • Do a snapshot of AADA/ADA price.
    • Check ADA/AADA distribution in the smart contract based on the snapshot price.
    • If NOT 50/50 then do a balancing:
      • If ADA > AADA → calculate how much ADA needed to be converted
      • If AADA > ADA → calculate how much AADA needed to be converted
      • Convert using a DEX
    • Now ADA/AADA is balanced 50/50 all conditions are met for the smart contract to release the funds
    • AADA is sent to a treasury
    • ADA will be airdropped to AADA holders based on the snapshot

Regarding the time period: I suggest starting with a 1-month period, and as dApp usage increases, lower it to 1 epoch. ­­


Regarding point 3
1- We can define amount of ADA level by DAO voting. i.e when collected fee amount reach 50.000 ADA
This maybe have side effects;
- Buy bulk may increase price much so others sell and got profit.
- We need to keep snapshots and calculate average of user holdings for period of time
2- We can make it in every epoch. This can make share easy regarding amount people are holding for each epoch in 1 snapshot

I also created new discussion/proposal topic regarding sharing the profits “AADA passive earning program”

AADA passive earning program

1 Like

So you want to distribute rewards based on the amount of AADA tokens + holding time?

Its suggestion. We can discuss. I am just thinking amount of aada staked long period is showing trust to platform and user can be paid based their dedication&loyality.

lets say every epoch is a payday.
User a, staked full epoch 1000 AADA so his points 5x1000 = 5000
User b, staked 2 days 2000 AADA so his points 2x2000 = 4000
User a, staked full epoch 200 AADA so his points 5x200 = 1000

User a receive %50 of total, user b %40, user c is %10

I think this can be programable and automatize it by coding. System will airdrop wallet shares automatically no need to make snapshots.
This will also reduce AADA amount on the market and support upper price action.

So we need to stake them. I prefer the tokens stay free so we can still use them for voting unless we can do both. I wish Mantas would comment on some technicalities, pros, cons, and limitations.

I had to vote no but if you add where the treasury have stablecoin, BTC, Ada and aada mixture then please so so that we can. Have a stable treasy


Although in my opinion this is a waste of fees to spread breadcrumbs I vote yes just to get something off the ground. I highly doubt we will get anything worth airdropping to holders in a cost efficient way ada wise on a monthly basis.

I also find it a little harsh to ontop of restricting yield and full liquidation rewards that you want the entire protocol fee to be lender only funded.

is the roadmap getting updated with the new proposal passes? :thinking:

Theyre implimenting the approved proposals and publishing timescales for that to happen on a proposal by proposal basis.