Creating Value
The information on this page and all other pages owned by, operated by, or related to Hector Finance is for educational purposes only and does not constitute any kind of advice.

The Treasury

The Treasury is the multisignature-protected safe in which we keep the majority of the stablecoins and volatile coins owned by the DAO. In December 2021, the risk-free treasury of Hector Finance passed $100,000,000 for the first time. The treasury is used for a few main purposes:

Inflows

Bonding

Bonding is one of the ways in which Hector Finance generates tokens. Users can use tokens like DAI to mint HEC tokens, which will then be vested for gradual release to the minting party.

Trading Fees

Certain features within the Hector Ecosystem like Hector DEX and Hector Bank generate trading fees from their use. These fees will in part go to the treasury.

Treasury Returns

From time to time, the community votes to spend parts of the treasury on projects on various networks. The returns from these tokens are owned by the treasury. More info about treasury allocations, as well as a complete list of allocations can be found here: TIP Proposals.​

Outflows

Allocations

Whilst allocations remain in the treasury, it's relevant to list them as a 'temporary outflow' since they are being converted from stablecoins (risk-free) to other coins (volatile).

LP Buybacks

From time to time treasury LP tokens are used to buy back and burn tokens. This mechanism is only used in periods of prolonged contraction. In this scenario, LP tokens are split into the components of HEC and a stablecoin (usually USDC or DAI). The HEC tokens are then burned, and the stablecoins are used to buy more HEC from the market which is also burned.

The DAO Wallet

The DAO Wallet can be considered as more of a "Warm Wallet" equivalent of the Treasury. Where the Treasury is meant for the long term storage of coins, the DAO Wallet is used for expenses like, Marketing Funds, Development Funds etc.

Inflows

Profits from subprojects

Subprojects are the name given to the usecases we are developing at Hector Finance. The profit from these subprojects will be stored in the DAO Wallet. A portion of the profit will be used to buy and burn tokens. Some profit may be sent back to the treasury. The subprojects are as follows:

Outflows

DAO Wallet outflows consist of:
  • Buyback and burn funds
  • Marketing funds
  • Development funds
  • Salary funds

Staking

Staking is an integral part of Hector Finance. Users will stake their HEC, locking it into the ecosystem and receiving compounding sHEC (which will always be exchangeable for HEC at a 1:1 ratio) generated by bonds.
Staking locks your HEC and gives you an equal balance of sHEC, which compounds automatically. To unstake, sHEC is burned for an equal balance of HEC.