Bread $BREAD

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Breadchain is a decentralized cooperative that connects post-capitalist web3 projects through blockchain-powered mutual aid. Its flagship application, Bread Crowdstaking on Gnosis Chain, allows users to stake xDAI to earn yield and receive BREAD tokens. These tokens grant voting rights to allocate interest earnings to member initiatives, such as worker DAOs and community currency tools; a unique trait for a token akin to a stablecoin.

Stablecoin

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Bread token design description

TL;DRTL;DR Origins of ValueOoV Value Capturing MechanismsVCM Implementation DetailsVCIP

Origins of Value

[1] Value Transfer

[5] Representation

[3] Governance

[8] Conditional Action

1. REPRESENTATION (5)

Represents the value derived from the dependability gained through the exchange ratio facilitated by the mint-and-burn process.

[5] = F(\text{xDAIExchangeRate}, \text{MintBurnVolume}, \text{TotalBaked})

$\text{xDAIExchangeRate}$ : Represents the ratio between BREAD and xDAI.

$\text{MintBurnVolume}$ : Reflects the total volume of minting and burning activities.

$\text{TotalBaked}$ : Represents the total number of BREAD tokens minted.

2. VALUE TRANSFER (1)

Reflects the utility value derived from using BREAD as a currency in the BREAD Marketplace for purchasing goods and services.

[1] = F(\text{TransactionVolume}, \text{MarketplaceAdoption}, \text{ServiceAvailability})

$\text{TransactionVolume}$ : Indicates the total value of transactions using BREAD in the Marketplace.

$\text{MarketplaceAdoption}$ : Reflects the number of users and merchants accepting BREAD.

$\text{ServiceAvailability}$ : Represents the range of goods and services purchasable with BREAD.

3. CONDITIONAL ACTION (8)

Reflects the activity of voting to influence resource distribution in the governance process.

[8] = \text{Binary}

$\text{Binary}$ : Indicates whether a holder participates in voting (1) or does not (0), as the act itself triggers the event.

4. GOVERNANCE (3)

Represents the value derived from the power to direct interest earned from sDAI to the most impactful supported projects.

[3] = F(\text{sDAIMonthlyYield}, \text{ProjectAllocation}, \text{TreasuryAllocation})

$\text{sDAIMonthlyYield}$ : Reflects the monthly interest yield from sDAI, providing the resources holders can allocate.

$\text{ProjectAllocation}$ : Represents the proportion of funds directed to specific projects.

$\text{TreasuryAllocation}$ : Indicates the allocation of funds directed to Breadchain Core and the Breadchain Treasury.

Economic Summary

The BREAD token anchors the Breadchain ecosystem by tying its value directly to xDAI, a stablecoin on the Gnosis Chain, through a “bake-and-burn” process. This stable foundation allows BREAD holders to redeem their tokens for xDAI at any time. The underlying xDAI is deposited to sDAI and generates yield used for Breadchain cooperative activities.

Additionally, BREAD functions as a medium of exchange in the BREAD Marketplace, facilitating transactions for goods and services among a network of supporters. Beyond this, BREAD unlocks governance capabilities, enabling holders to vote on the allocation of yield generated from sDAI to projects within the network.

Bread captures value through two primary value capture mechanisms: Value transfer from Representation: BREAD is minted and burned at par with xDAI (Representation), via smart contracts such as 'Bread.sol'. This stable value allows BREAD to serve as a reliable medium of exchange (Value Transfer) in the BREAD Marketplace, enabling transactions for goods and services supported by partners like Giveth and Crypto Commons Association. Generalized Governance: Bread holders can vote (Conditional Action) on allocating yield generated from sDAI to various projects within the Breadchain ecosystem, directly influencing (Governance) resource distribution. This governance power, facilitated by contracts such as 'ButteredBread.sol' and 'YieldDistributor.sol', endows BREAD with utility value in its ability to allocate financial resources to the most impactful projects.

The above mentioned value capture mechanisms can be each formulaically described as:

\text{Value transfer from Representation} = [5][1]

\text{Generalized Governance} = [8][3]