Decentralized Foundation Docs

Decentralized Foundation

Welcome to DEFO. Sustainability & Philanthropy in DeFi

In this GitBook documentation, you can find everything related to DEFO and how the project works.

The current version is v1.2.14.

It was last updated on March 20th 2022.

Introduction
DEFO

What's DEFO?
Decentralized Foundation (DEFO) is a DeFi-As-A-Service protocol on the AVAX network that aims to
leverage the world of DeFi to generate revenue while also helping the most in need through our charity
donations.

We focus on long-term sustainability, opting for a viable business model with more modest returns rather
than typical protocols promising higher returns but inevitably collapsing.

We also distinguish ourselves by our transparency, both in how DEFO is run and our donation operations.

Disclaimer

Whitepaper
This whitepaper is our general vision for the project. It is meant to show how we intend the system to
operate. All the information here can change.

Funds
Investing in DeFi is inherently risky. Your funds can be partially or completely lost.
Please invest responsibly. Do not put more money than you're willing to lose, and diversify your portfolio
across several protocols and different types of crypto investments.

DeFi as a Service

DeFi
Decentralized Finance (DeFi) is a new protocol that allows financial instruments to be available to anyone
without the oversight of an authority like a broker or bank. As the name implies, it is completely
decentralized relying on smart contracts on the blockchain.

It allows trading cryptocurrencies, earning interest by depositing funds, using leverage against assets, and
other financial actions that were previously not available except to a minority of the population and always
provided by a centralized platform.

This is a very new field that is still blooming. DeFi has only gotten popular in the last 1-2 years and it's
constantly evolving. However, it’s still unknown by the world at large and inaccessible to everyday people.
In late 2021, the value of DeFi assets was estimated to be $100 billion.

DaaS (DeFi as a Service)

The concept of DaaS is using funds to invest directly into DeFi projects. Due to its extreme innovation, DeFi
is a unique opportunity for investments, given that projects can grow very quickly due to the utility provided
for the community. Such investments can provide very high returns, and hence the existence of DaaS which
has proven very successful.

The appeal of such a service is that it simplifies investing. One does not require to handle dozens of different
protocols across many chains and constantly worry about when to buy, sell, or change investments.

About us
Trust

DeFi due to its decentralized nature and running on the blockchain where funds cannot be recovered is
particularly vulnerable to scams.

Several projects have turned out to be frauds, leaving investors with lost funds and the criminals cannot be
found or punished since they were anonymous.

This leaves the industry extremely skeptical of new DeFi projects, making new projects like ours harder to
start. We want to create a new standard of trust and professionalism.
We have several factors that together will make our project unique and considered extremely trustworthy
within the DeFi space.

Team

Most node projects are anonymous. People don’t like to have their identity known. First of all due to privacy,
but second due to the large amounts of money involved in these types of projects.

This standard has been shifting, and investors have been increasingly demanding KYC (Know Your
Customer). This means that team members are required to expose their identities to a KYC company, but not
to the public.

That company will keep their identity private unless there is a criminal activity, in which case they have the
right and obligation to pass all the information gathered (name, ID, address, etc) to the local authorities. This
reduces the chance of scams, and we will be doing this KYC service with Assure, which is highly reputable.

We will go even further by doing what is called doxing, meaning that our identities will be fully public upfront.
This brings a very high degree of confidence for the investors.

Tiago (@Dazai) - Founder

Passionate about learning and innovation. A big believer in the effective altruism movement which inspired
the creation of DeFo. Over 8 years of experience in community management.

Filipe - Founder
Entrepreneur and crypto enthusiast, leading teams for over 10 years and currently focusing on bringing the
world a bit closer together through inclusion.

Paulo - CTO
Software engineer with almost 10 years of experience, developing products from scratch in the most diverse
markets. Experience in leading teams and projects from paper to production.

Jabari - Smart Contract Developer

Passionate builder and problem solver - has built complex systems and will continue to build more.
Currently pursuing college degrees in Computer Science and Information Systems.
Doğuş - Smart Contract Developer
A nerd with a lifelong dream of understanding the internet. Experienced in booping cloud servers, petting
smart contracts, and calming security vulnerabilities.

Branislav - Mathematical Modelling

Graduating in Computational Mathematics with a focus on machine learning and automation. Has a strong
passion for decentralization and uplifting the living conditions of all people.

Space publishing
GitBook Documentation

Good to know! We're still documenting this version of GitBook. Some documentation links might
be out of date for now!

Security

Multi-Sig
Multi-signature dilutes the power a single person has over the protocol. It makes sure that no single person
can authorize a transaction. The supply of tokens in the treasury can only be moved if all the people
included in the Multi-Sig authorize it. This can include not only the entire team but also members of the
community or neutral 3rd parties.

We will have 2 phases for the Multi-Sig:

Phase 1: 3 core team members + 2 mods (requires 4 signatures)

Phase 2: 3 core team members + 3 mods + 2 influencers (requires 6 signatures)

Liquidity Lock
This means that the token liquidity pool is locked for a fixed period of time with a time-lock smart contract,
usually 60-90 days. This provides liquidity protection, and no one in the team can access the tokens.
We will lock our liquidity for 60 days, followed by a second lock of 90 days. A longer lock is not beneficial
because of Phase 2.
The other wallets (treasury, charity and reward pool) cannot be locked because tokens are coming in and
out constantly. However, the multi-sig will offer protection in that case.

Audit
This is a review of the smart contract to make sure that the code running the protocol is safe. Preventing both
exploits from the team and also 3rd party attacks. We will be conducting our audit first with Coinscope and
later with CertiK. The latter is fairly expensive so we need more funds coming in first.

Philanthropy
Our goal

Our aim is to use DeFi as a tool for effective philanthropy while also producing sustainable revenue for
every investor.

All the DaaS/NaaS are investment projects. People invest because they want to have a good return on
investment. However, our goal in creating DEFO is to donate as much money as possible. We want to use
the DeFi node system that has proved massively successful as a way of gathering funds and in the end
donating to charity.

Nevertheless, we still have to function as an investment project. Otherwise, there might be less incentive for
new investors. Beyond the slower reward rate and the charity vault, our project will function in a similar way
to its competitors and ensure maximum profitability to guarantee the continued success of the project.

Connecting the Digital

Web3 is here to stay. However, we feel it's still in an early stage of maturity and one of our major objectives
to improve is the bridge between web3 and the physical world. With that in mind and given the philanthropy
scope of our project, we truly believe that in order to raise awareness and have a bigger impact there’s a
need to bring people closer together.

When people decide to donate to an institution, most times there is no reference or real understanding on
what and who that money helped precisely. With DEFO we will implement a system where it will be known
with full detail where the donations are going to, who has benefitted from them, and how you changed their
lives for the better. Charity and Web3 desperately need a link, and we will provide that bridge.

Later on, we will build a fully interactive metaverse where you’ll be able to live the life-changing stories of
the lives you helped, get inside tours of how our charity partners work and so many other important things
we don’t think about often because it’s too far from our daily lives.
Charity NFTs

We will have digital content which will be saved as NFTs for our contributors, it’ll be your unwavering proof
of how much good you’re doing in this world.

There will be several types of tiers for the NFTs, depending on how much you have donated.

Empath NFT: Over $5,000 donated

Altruistic NFT: Over $25,000 donated

Philanthropist NFT: Over $50,000 donated

Each NFT will say precisely how your money was used and include digital content related to donations. For
example, a real-life video showing the institutions and the people that were helped.

Depending on the type of NFT you may have special perks inside the protocol.

Process

The donations will be made monthly from all the money gathered in the donation vault. In the beginning,
charities will be locked on a pre-vetted list, based on what we consider solid real-world projects.

Each month the community can vote on the charity to donate from the approved list. There is an approved
list because picking good charities is more difficult than one might assume.

Many charities

Do not make their decisions and use of funds public

Are incredibly ineffective (the good done per dollar is very low)

Are not science-based on what they support

Are borderline corrupt, with CEOs often making hundreds of thousands of dollars as their personal
salary.

We have researched extensively what charities are worthwhile, avoiding these common pitfalls.

Decentralization

The internal vetting process is only temporary. Our long-term goal is to have the process of choosing
charities completely decentralized. This will avoid any individual bias from our team and put everything into
the hands of the DAO.

We will have an educational course about charity and the logic that goes behind our decision making in
picking good charities. Once that’s completed, we will transition from a semi-centralized model to a fully
decentralized one.

Charity list

These are the charities that will be available in the beginning, vetted by the factors we previously
mentioned.

Malaria Consortium
www.malariaconsortium.org

Malaria kills over 400,000 people annually, mostly children under 5 in sub-Saharan Africa. Costs about $7 to
protect a child from malaria with preventive medicine.

Helen Keller International

www.hki.org

Vitamin A deficiency leaves children vulnerable to infections and can lead to death. Over 200,000 children
die because of vitamin A deficiency each year.Costs about $1 to deliver a vitamin A supplement.

Givedirectly
www.givedirectly.org

The majority of people in the world live in extreme poverty. This charity gives cash directly to poor families in
developing countries. Over 80% (very high) goes directly to the people in need of basic supplies like food,
water and education.

Charity in DeFi

We are not the only ones using DeFi for charity. Many projects have a charity portion, however, they often
have a “Give” section on their website.

However, this relies on a few precious souls to have the effort of doing the donation. We believe that a
project with its primary goal as a charity will be more successful, rather than having charity as an "add-on".

Charity is considered noble by everyone, and yet few people actually donate, despite affording to do so
(even a small amount helps). This is why we strongly believe that any donation process needs to be
automated, and simply having a donation function is not sufficient. This is why any charity organization tries

We want to make the donation process as easy as possible in order to gather as much funding as possible.

Tokenomics
Introduction

This refers to the economy of the token and how the project is organized. All information provided here is a
general idea of what we want to achieve. None of it is fixed, and everything will be constantly revised with
our mathematician in order to ensure the protocol is sustainable and maximized.

Node creation

Node Tiers
There is likely going to be a cap on the number of nodes, but the number and date aren’t yet decided. To
create a node, it will require our native token DEFO. We will have 3 node tiers:

Sapphire node: X DEFO + 25 DAI

Ruby node: X DEFO + 100 DAI

Diamond node: X DEFO + 400 DAI

DEFO's price is still TBA, but we are aiming to make the baseline node cost, including DEFO and DAI,
about $50, $200 and $800 respectively. As DEFO increases in price, the total node cost will increase
accordingly.

The largest the node, the greater the reward percentage in relation to the amount invested. To create the
node also requires an additional amount of DAI - a stable coin. In the beginning, this will correspond to half
the value of the overall node cost.

This ensures that our treasury grows not only with our token but also that we have funds that can be
deployed as needed without having to sell the token, negatively affecting the price.

For now, the DAI component will be fixed. However, in the future, this may adjust so that we're able to get a
higher percentage towards the treasury as the token increases in price.

Node NFTs

The nodes will be NFTs, but they won’t be tradable in the beginning. Projects that have done this have faced
difficulties.
People can get the node NFTs for cheaper in market places and they are bought with AVAX. This reduces
buy-pressure for our DEFO token and devalues the coin over time.

Our solution will be to implement on our marketplace that requires DEFO for all transactions. However, this
will take some time to implement.

Rewards

Many projects offer very high rewards, often with 2-3% per day and occasionally as high as 5% per day.
However, this is completely unsustainable. We want to make sure our project lasts, and therefore our
tokenomics and rewards were made with sustainability in mind.

While the norm for node projects is for the rewards to be taken daily, or even hourly, rewards in DeFo will be
taken weekly. This encourages long-term thinking, which is essential for this project to succeed.

Because of our high-tax system, we will show the rewards for both pre and post-tax which differ significantly.
However what matters is the post-tax rewards, the pre-tax is only shown here for explanation purposes and
it's what you will see being rewarded in the dApp.

Pre-tax rewards:
Sapphire node: X DEFO / week (9% per week)

Ruby node: X DEFO / week (9.5% per week)

Diamond node: X DEFO / week (10% per week)

These rewards are before the sell tax (50%), we explain the tax in the fee section.

Post-tax rewards:
Sapphire node: X DEFO / week (4.5% per week)

Ruby node: X DEFO / week (4.75% per week)

Diamond node: X DEFO / week (5% per week)

These rewards are after the sell tax (50%).

Reward tapering

The problem
The major problem with node projects is sustainability. If an investor decides to compound their rewards,
their rewards will increase exponentially. While great for the investor, in the long-term this presents a great
challenge for the protocol, because it will drain the reward pool very heavily.

STRONG example
One of the oldest node protocols is STRONG. It requires 10 tokens to create a node and rewards 0.1 tokens
per day. If someone got 1 STRONG node on January 1st 2021, it would have cost $250 ($25 per STRONG).
If they compounded for 272 days, they would now have 10 nodes. Their reward rate would be 1 STRONG
per day.

Even if STRONG's price is $100, that means they could cash out $3000 per month with a $250 investment
in less than 1 year. And this example isn’t that drastic. Some people got way more than 1 node, and some
got it for even cheaper than $25.

This is a problem that every protocol deals with. The fact that so much profit can be made is precisely why
the interest in node projects is so high. And the fact that interest is high is why it’s so easy to accumulate a
very large treasury in a very short period of time. However, in the long-term, people who got in early will
drain the protocol very heavily, threatening the suitability of the protocol.

We are fans of the STRONG team and this isn't an attack on protocol, we are simply illustrating a common
problem that these projects have encountered.

Our solution
Our solution is that the rewards taper over time. This is the only way to prevent this problem from occurring.
Such a mechanism needs to be carefully crafted since it still needs to be an appealing investment. While we
present our plan here for the specifics of the reward tapering, this may be changed before launch.

After receiving your 1x ROI in the number of tokens invested - whether profit has been taken or not, the
rewards will taper by 20%.

Then the rewards will taper each time ROI is achieved.

Below is an example of how it looks in practice. Let's assume the node cost was 100 DEFO and it was
producing 5 DEFO per week.

100 DEFO received: 20% taper (4.0 DEFO)

200 DEFO received: 20% taper (3.2 DEFO)
300 DEFO received: 20% taper (2.6 DEFO)

400 DEFO received: 20% taper (2.0 DEFO)

Etc

Each taper is based on your latest reward rate and not the original. This tapering applies individually to each
node. As such, if you compound or purchase a new node, each new node will not have a taper until they hit
their respective ROI.
This system prevents the exponential growth that compromises the protocol, but it does so in a gradual
manner and only after ensuring the investor has gotten good returns. These calculations only apply to the
native token.

Distribution

For every node created, it will have the following distribution:

DEFO:

Reward pool 90%

Liquidity 5%

Marketing 1.5%

Team 3.5%

DAI:

Treasury 80%
Buyback 10%

Liquidity 5%
Marketing 1.5%

Team 3.5%

Rewards pool: The tokens that will get redistributed back to the investors in a weekly manner.

Treasury: The amount of money we will invest as part of our DaaS/NaaS protocol. As you can see our
treasury allocation is very high in order to for us to be able to invest that money and become sustainable.
Most protocols only have a 10-30% treasury allocation, which makes it difficult to gather enough funding and
the protocol gets stuck in requiring new node creation.

Liquidity: To make sure there is an ample supply of the DEFO token in the market and ensure good price
stability.

Buyback: Because of our charity element, we need to sell 10% of DEFO rewards. This ensures that this sell
pressure is mitigated to help price action. This will unlikely be active in the beginning since the price is likely
to increase regardless.

Marketing: To ensure we have funds to make the project known. This will be used in many different forms
depending on the strategy used. Initially, this will be done by our core team but later on, this will be allocated
to a full marketing team.

Team: This is to pay our employees. However, given the noble goal of our project, we as a core team want
to receive as little money as possible, just enough so that we can dedicate the amount of time needed for the
project. As the project grows, we plan to decrease this significantly and eventually replace a percentage
altogether and simply receive a fair wage.

Minting

These numbers may change, but this is our plan for the supply allocation.

The protocol will mint 1,000,000 $DEFO tokens.

600,000 DEFO for the reward pool

350,000 DEFO for the liquidity pool

20,000 DEFO for team expenses

20,000 DEFO for team core members

10,000 DEFO for marketing

We may use the reward pool allocation to increase our treasury (by selling DEFO for DAI), especially in the
beginning as the price is increasing.

Team expenses refers to helping pay salaries to staff, including developers, designers, mods, etc. The team
core members refers to the 2 founders and CTO, which helped bring the project into fruition with many
hundreds of hours of work. Both of these funds will be vested. Only 10% will be available at launch. The rest
of the tokens will be available over the course of 9 months, with each trimester unlocking 30% of the tokens.

Node modifiers

We will have two node modifiers, altering how the node behaves. A node can only go through one modifier
and the modification is permanent. It has no associated cost. These will likely not be implemented at launch
but added later on.

Fast-track modifier
The reward rate will increase by 100%. However, after achieving 1.5x ROI the node will stop producing
rewards. This will exclude you from Phase 2.

Once again the ROI is determined by the token only, so if the token has increased in price, in practice the
ROI will be higher (if it doubles, that would be 3x ROI).
Generosity modifier
This will make the cash-out charity fee increase by 10%, going from 15% to 25%. After achieving 1.5 ROI,
this will further increase by 10%, with the final amount being 35%. As the name implies, this will be for those
who feel generous and want to increase the impact they have from their node and help even more people.

This modifier will allow you to be listed in the “Generosity” table of the DeFo dashboard. The table will
consist of only generosity nodes, ranked by the total amount of DEFO that was donated from their node.
Those with Generosity nodes will be able to put their name and social media details that will appear in that
ranking. Generosity nodes don’t pay a maintenance fee. We are in the process of adding more utility to this
modifier to further incentivise its adoption.

Fees

There are several types of fees in our protocol to ensure that our vision is accomplished.

While this may look like a lot of fees, they were carefully crafted to ensure the protocol is successful while
still providing a great return.

A better way to conceptualize fees is thinking about the ROI (Return on Investment) period after all the taxes.

Sapphire node: 240 days

Ruby node: 224 days

Diamond node: 211 days

This includes the charity fee, the sell tax and the maintenance fee. It does not include the reward fee
because that fee is zero as long as you wait.

The ROI is longer than most protocols, but of course that's directly correlated with their sustainability. We
want something that lasts!

So many fees can be scary for investors, and we could have easily had minimal fees and just lowered the
rewards instead, giving the same return for investors but having a worse system. However, we are putting
trust that our investors will understand the underlying mechanisms. Hopefully the ROI will make it clear how
this plays out at the end.

Charity fee: 10%

This is a cash-out fee. It’s obviously the most important and without it, we can’t fulfil our philanthropy goal. If
we see that it doesn't compromise the sustainability of the protocol and DEFO stays an attractive investment,
we may increase this in the future.

This tax will be immediately transferred to the charity wallet.

Reward fee: 30% / 20% / 10% / 0%

This will be taxed when cashing out rewards. It has a tiered system based on how long the rewards have
been kept in the protocol
This tax will go 100% to the reward pool.

1st week: 30% tax

2nd week: 20% tax

3rd week: 10% tax

4th week: 0% tax

Sell tax: 50%

This is a fixed tax whenever the token is sold. While this is very high, this is accounted for by the post-tax
rewards in the reward section. We could easily just not have any sale tax and decrease the rewards by
50%. But doing so would make swing trading problematic. This will make it so that our token is only sold
within the context of using the protocol as intended.

This tax will go 100% to the reward pool.

Compound tax: 50%

This fee is simply compensating the sell tax. In practice, compounding is tax-fee.

This tax will go 100% to the reward pool.

Total fees:

1 week: 90% tax (charity 10%, reward 30%, sell 50%)

2 weeks: 80% tax (charity 10%, reward 20%, sell 50%)

3 weeks: 70% tax (charity 10%, reward 10%, sell 50%)

4 weeks: 60% tax (charity 10%, reward 0%, sell 50%)

Maintenance fee: 1.5/6/24 DAI per month

Sapphire nodes pay a 1.5 DAI fee, Ruby nodes pay a 6 DAI fee, and Diamond nodes a pay 24 DAI fee.
They are based on the cost of the node, so they are proportional to the investment made and fair for every
node. These fees will adjust if the DEFO token changes significantly to maintain the same ratio of node-
value to maintenance fee (currently 3%). Since the token is likely to increase in value in the beginning, these
fees will increase accordingly.

The maintenance fees are important because it provides a consistent source of revenue to the protocol that
can be utilized without selling the DEFO token and affecting its price. It will be possible to pay this amount
up-front until 6 months.

Unlike other protocols with a similar structure, the node is never lost because the fee isn’t paid. However,
your node will become “inactive”. It will accumulate rewards as usual, but you won’t be able to either
compound or cash out until the fees are paid.
The maintenance fee will go 100% to the treasury.

Optimizers

This is what we call for several mechanisms that optimize the protocol in order to minimize or eliminate
some of the major problems current node projects have.

Daily Limit
There will be a maximum amount of node creation per day. Many protocols similar to ours ran into problems
when growing too fast since the rewards required to pay were outpacing the treasury.

We will ensure that we grow at a pace that is sustainable, while at the same time increasing the demand for
node creation as it becomes more difficult to get inside the protocol due to a limited supply.

While this number may change, we plan to have the following daily limits:

Sapphire node: 50 per day

Ruby node: 12 per day

Diamond node: 3 per day

This will also increase the demand for DEFO nodes. We will likely also introduce a total cap of nodes but it's
yet to be determined.

Whale Prevention
There is going to be a limit to how much DEFO can be bought and sold, likely a limit of 0.5% of the total
supply per 24h. However, we most certainly do not want to lock people’s funds.

We encourage investors that want to cash out high amounts to make an OTC (Over The Counter) deal
directly with us. This means that the transaction is done internally and avoids crashing the price.

This not only helps the protocol but helps large-scale investors as well since it avoids devaluing the token
price and therefore increases their returns in the long term.

Price stabilizer
When launching, it’s normal that the price will increase. Sometimes this creates massively spikes, which are
often followed by a crash. We want to avoid this and we want the price as stable as possible. The specific
numbers may change, but we will have a price stabilizer bot that ensures that the price stays between a
certain range. If the price is increasing significantly, then we sell DEFO, increasing our treasury and
avoiding a big spike. The details of the price stabilizer cannot be public because it would encourage people
to profit from trading by knowing the direction of the price.

Anti-micro-sales
It will not be possible to cash out rewards unless the amount is $50. This will prevent constant sell-pressure
from smaller nodes.

Plans
Utility

We want our token to have utility, which helps reduce sell pressure. The main utility of the token will be its
use for Phase 2. However we have some other ideas that we may implement in order to provide further
utility. These are long-term plans that might change in the future.

Staking lottery
Investors will be able to invest their DEFO into a staking pool, where the funds will be locked for a certain
period of time and used for liquidity. At the end of the lock period, the staking rewards will be given to 3
different people as an air-drop.

This will create an incentive to use DEFO in the lottery instead of selling, and some people will receive a
great payout. It’s especially attractive because, unlike most lotteries, it does not cost anything to enter. There
is no payment to participate, and you will get the exact same DEFO you put in after the locking period.

Crypto fund-raising
We plan to create a sister project that allows for crypto funding raising. It’s important that this website is
somewhat separate. One of the reasons we created DEFO was so that people can know that the money
they put in will go towards great causes and their money is being used efficiently. With the crypto fund-
raising, we can no longer guarantee that.

While we will have an approval system to make sure that the fundraisers are relevant to our vision, this
website will function very autonomously. Anyone can create a project, and fundraise as little or as much as
they desire. The funds will be collected in DAI, and any fundraising will have a fixed fee. This fee will be
automatically used to buy DEFO. The remaining funds will go towards the fund-raising owner.
Charity store
We will have a shop that works exclusively with DEFO. You will be able to buy DEFO merch, such as
clothing, magnets, wall art, mugs, etc. The designs of the merch will be done by the people that we are
helping. For example, we will use the drawings of children helped by the Helen Keller International charity
and use them as the clothing design. All the DEFO used in the store will be immediately burned, reducing
sell pressure while making the token more deflationary. The store may later incorporate NFT sales as well,
by hiring artists to contribute towards a specific NFT limited collection in the name of charity. There can be a
new NFT collection each month, each being sold for the highest bid within a limited period.

DeFi course
DeFi is a very hard space for newcomers to understand. While DEFO as a protocol manages to use DeFi
and distribute the rewards in a way that’s very simple, nevertheless some users will have the desire to
understand how DeFi works. We want to create a low-cost educational course about DeFi that explains
everything from the very basics, but at the same time goes into the deepest and most technical aspects. This
will allow everyone to be able to understand how DeFi operates and take advantage of it. This educational
course can only be bought in DEFO. We may also produce other digital content in the future, either related
to DeFi or charity.

Launch

Whitelist
There will be no whitelist. It’s unfair for the community as a whole and it creates a very restricted group that
disproportionately profits from the protocol at the expense of everyone else.

Pre-sale
There will be a pre-sale that allows you to buy a node, although not yet active. This will allow us to gather
the funding needed to make the project completely ready. Usually, with pre-sales, you get access to the
token. However, this generally makes it so that many people buy the token simply to sell it again once the
price increases. By buying a node directly instead of a token, we avoid this problem.

The project isn’t live after the pre-sale, and no rewards are given until the project is running after the public
sale. The funds from the pre-sale will help us massively speed up development, but it’s still impossible for
us to predict how long it will take. We estimate 4-8 weeks, but it can take significantly longer.

By buying in the pre-sale, you’re accepting that the project may be delayed. We don’t want to rush the
launch to make sure everything goes smoothly. Until the project is launched the nodes will not accumulate
any rewards
We are likely going to have 2 pre-sales. The first will be used to cover past expenses, KYC, and finishing
the smart contract development. The second will be used to gather a large liquidity pool, pay for contract
audit, KYC, and marketing. The core team will receive no profit from either pre-sale. Everything will be used
to either cover expenses or used for the protocol.

The pre-sale will have a limit of nodes available:

480 Sapphire nodes (15 max per wallet)

120 Ruby nodes (10 max per wallet)

30 Diamond nodes (2 max per wallet)

Private mint:

2 Diamond nodes and 2 Ruby nodes will be minted for each member of the core team (3 people).
1 Sapphire node will be minted for each staff member (8 people).
30 Sapphire nodes and 8 Ruby nodes will be saved for marketing (Twitter and YouTube giveaways).

The pre-sale nodes will be paid in DAI with the following prices:

Sapphire node: 50 DAI

Ruby node: 200 DAI

Diamond node: 800 DAI

The first pre-sale will cover basic expenses, such as the writing of the smart contract. The details for the
second pre-sale are yet to be determined, and they will be used to fund the treasury and liquidity.

Phase 2

Sustainability
We’re proud to be transparent with every single detail of our protocol. We built our entire system with
sustainability in mind. However, we can't promise guaranteed pure sustainability. This is due to two reasons:

1. As a DeFi as a Service protocol, we’re inherently dependent on how the DeFi world evolves, which is
impossible to predict with certainty. In order to sustain our rewards, we will need to have investments
provide enough revenue. We built DEFO already in a conservative manner to make sure this is
possible, and our rewards are much lower than the traditional node projects. But even this might prove
to be unsustainable in the case of an extended bear market or some other scenario that compromises
investment returns.
2. Node protocols are new and somewhat experimental. It's possible that it may not work in the long term
 due to unforeseeable circumstances.

The problem of running out of rewards to give and/or negative price action is an issue that every single node
project faces, but we are part of the few that is extremely upfront about it. However, we have a key difference:
DEFO will survive, no matter market conditions.

How? For the system that we have described so far, we call that Phase 1. We will keep that for as long as it
works or we think it's productive. However, in case DEFO (and by extension all other node protocols)
become unsustainable, we will change our revenue model. We will then change to Phase 2.

Phase 2
This will be a complete change of our business model. It will differ from Phase 1 in the following:

Nodes will no longer pay a maintenance fee

Rewards will no longer be given in a predictable manner.

Charity contribution will be lowered from 10% to 5%

The rewards will be given monthly in DAI by splitting the revenue from our investments.

This ensures that our protocol is sustainable with whatever opportunities are available in the DeFi world.
While we understand that such a system is not as appealing, it’s the only true solution for guaranteed
sustainability. Furthermore, because our allocation to the treasury is so high compared to other node
protocols (which allocate mostly to the reward pool), this transition would still be able to continue providing
great returns to investors.

The treasury distribution will be based on the node each investor has plus the DEFO they have put into the
Phase 2 Vault (P2V). The P2V will act as a staking pool, and the greater the tokens you have in it when
transitioning to Phase 2, the more allocation you will have and receive more from the profit-sharing. These
funds can only be introduced directly from the rewards. You cannot buy the token and put it into the vault.
And if the rewards are cashed out, you cannot put them back into the P2V. Once locked, they can be
removed but with a 10% fee.

In Phase 2 people will still be able to get into the protocol, but no longer through nodes. Allocation will get
determined through NFTs. Phase 1 investors will be given P1 (Phase 1) NFTs, which has several tiers
depending on how many nodes they had and how many tokens they were able to accumulate in the P2V.
Once given to old investors, these types of NFTs will never be minted again. P1 NFTs will give a 5% boost to
the treasury profit allocation compared to P2 NFTs.

Alternatives
Instead of a treasury-sharing model, we may also adopt a new system entirely, for example by building a
DEFO ecosystem. If this happens, then a benefit will be had based on the tokens accumulated in the P2V.
These options will be discussed with the community if we are in this situation and we will decide the best
course of action.
Marketing

The success of any DeFi project relies heavily on marketing. However, it needs to be done correctly. First
and foremost we want the initial development to be fueled by organic growth. Word of mouth is invaluable
and all the highly successful DaaS/NaaS projects relied on it with paid marketing serving a minor role.

Nevertheless paid marketing does help, and we plan to use it in two separate phases. Phase 1 will be a
softer approach relying heavily on Twitter and YouTube, using influencers with large audiences to promote
our project. From our experience, giveaways are a very cost-effective marketing strategy in order to make
videos and Tweets go viral.

We already spoke with a few public personalities that have shown interest in our project and would be more
than willing to help promote it. The second phase will be marketing outside Twitter and YouTube and using
a fully dedicated marketing team in order to make the project as well known as possible.

Roadmap

The roadmap itself is just an early sketch, it will vary based on the funding received and how the project
develops. Setbacks are common in any project of this magnitude and complexity.

Late December: ✓ Rough conception of the project

January: ✓ Planning and team building

Early February: ✓ Complete team and first whitepaper draft

February 21st: ✓ Official team kick-off

March 18th: ✓ Whitepaper public release

March 21st: 1st NFT pre-sale + Doxxing + Investor Discord

March 22nd: KYC application

March 28th: First-wave marketing

April 3rd: First AMA

April 4th: 2nd NFT pre-sale + Public Discord

April 5th: Second-wave Marketing

April 15th: Second AMA

April 25th: Locked Liquidity

May 1st: Launch

Links

Website

DeFo | Sustainability and Philanthropy on DeFi

Social media

Twitter:
https://twitter.com/defoxyz

Security

Locked liquidity: TBA

Multisig: 0xAEf6Bd49e374C067672bABC554A7AEe36fb71267

KYC: TBA