Berezka dao что это

What is the Berezka DAO?

B erezka DAO is an asset management gateway, managed via Aragon interface in a DAO (decentralised autonomous organisation) format, helping to allocate crypto assets across top audited DeFi protocols bundled in convenient investment products.

Why DeFi?

If you are not familiar with DeFi ecosystem we highly recommend you to read the “How to deFi” paper from Coingeko, following the link here

Briefly, DeFi, or decentralised finance is a descriptive name of various projects primarily built over Ethereum blockchain in a form of sets of automated smart contracts to automate a list of primitive financial products, e.g. lending, deposits, insurance, and the like.

The 2 largest markets in DeFi as of January 2021 are lending and decentralised exchanges (DEXes).

What the current DeFi lending protocols and DEXes are essentially doing — is simply competing with centralised crypto exchanges for the same users (mostly called traders).

Traditional average crypto exchange users, those who are not actively trading, still do convert their crypto assets to other crypto assets every now and then.

Professional crypto traders are more active, using various tools and services on such centralised crypto exchanges for years now, with one of the largest product for them being lending against their assets on balances of the exchange (practice used in most banks and brokerage firms in traditional markets for decades and is often called REPO deals).

With centralised crypto exchanges introducing stricter rules on KYC, limits on withdrawals, and sometimes performing voluntary internal flash crashes and other un-transparent activities which harm traders badly — all these factors motivate current clients to experiment with their 2 basic requests (exchange and lend-loan crypto) on decentralised platforms. All activities in DeFi are completely transparent, with no limits on volumes, and as fast as the Ethereum network allows it to be.

Everyone who has changed one crypto asset to another is technically called trader.

Every trader pays for any activity on centralised exchange — trade, conversion, loans, withdrawals and more.

The same applies to DeFi services — the same traders pay fees for the same services — trade, conversion, loans, deposit and withdrawals, etc.

DeFi protocols collect such fees from each trader activity and distributes a part of these fees to other users for needed services.

How the money is made in Berezka DAO?

There are many opportunities opening up for capital in DeFi.

There are literally hundreds of ways how various DeFi enthusiasts are trying to make money on this new and vibrant market — lending, getting leverage on current assets, yeild farming, staking, degen token farming, liquidity provision, arbitrage, liquidations, accumulating gas tokens and hash rates, building portfolios of token sets, participating in token presales or simple trading.

Each of such models has its own risk-return ration, with some of them being very conservative and others being extremely risky.

Berezka DAO performs 1 task to earn returns on capital in 3 different ways.

Berezka DAO supplies capital to top audited DeFi lending protocols and DEXes to:

Receive fees for supplying capital to such lending protocols (in essence Berezka DAO makes deposits to audited DeFi lending platforms against the collateral on such platforms)
Receive trading fees from DEXes for supplying capital to such DEXes in selected trading pairs to ensure manageable risk-return
Receive yield farming tokens from such platforms and DEXes as a bonus for supplying liquidity

What are Berezka DAO products?

Depending on the risk-return appetite of Berezka DAO participants there is a range of products.

Firstly, there are extreme, rather opposing interests:

On the one hand, there are those who are NOT willing to expose their capital to typical crypto volatility and would like to keep all their assets pegged to USD.

Berezka Deposit — is an ideal product for such users, as 100% of the capital is held in a mix of stable tokens pegged to USD, which is then allocated to lending protocols and DEXes to earn commissions, trading fees and framing tokens

On the other hand, there are hard crypto enthusiasts (eg. Bitcoin, Ethereum miners or holders, etc.), who are holding their crypto assets regardless of the market short and mid-term fluctuations, focusing on the long-term perspective.

Berezka BTC/ETH — is a similar product to Berezka Deposit, only when capital is received in a form of BTC or ETH from users, and then allocated to o lending protocols and DEXes to earn commissions, trading fees and framing tokens. Users always have the same amount of BTC and ETH on their accounts and can withdraw it at any time. All the price fluctuations on BTC or ETH are on the user, and Berezka DAO has nothing to do with it (meaning that even if the price of the supplied capital (BTC, ETH) doubles or falls, Berezka DAO does not take any fees or make compensations — and simply return the same amount of BTC, ETH initially supplied). Any earnings on top of the initially supplied amounts of BTC/ETH is considered additional earning and subject to Berezka DAO fees (see Fees section for details)

B etween these two extreme opposing requests there are two additional Berezka DAO products, mixing the previous two approaches

Berezka Flex — for those who still prefer to keep the majority of their assets pegged to USD, to avoid massive corrections on the market, but still partially participate in the crypto market growth, should this happen. Berezka FLEX being the most popular product so far, allows to keep over 80% of assets in a mix of stable tokens, pegged to USD at all time, with an option to allow exposure to Ethereum and a few farmed tokens up to 20% of the portfolio. Which means that up to 20% of the total portfolio may be kept in lending pools of trading pairs on DEXes from time to time, when the market shows signs of future growth. This strategy allows to not only profit from commissions, trading fees and farmed tokens, but also from the appreciation of the ETH price in a short perspective and bring higher returns than Berezka Deposit
Berezka Dynamic — for those who are betting to multiply their capital in the hopes that the whole crypto market is to grow in the short and mid-term. Extremely volatile product, that tends to outperform BTC and ETH during their growth stages, but also drops in price drastically together with the correcting crypto market. Berezka Dynamic is a token set built around 60/30/10 criteria where 60% of the portfolio is always kept in a mix of BTC/ETH, 30% is kept in a mix of tokens of top DeFi protocols (e.g. AAVE, YFI, UNI, COMP, BAL, 1INCH, SUSHI, etc.), and up to 10% my be used to participate in extremely short-term degen token trading.

WARNING! Berezka Dynamic is a highly volatile product which grows only during the whole crypto market growing trend. Never allocate here more capital than you can completely lose due to market conditions. Use extreme caution!

How is Berezka DAO structured?

Berezka DAO uses a typical GP — LP (General Partners — Limited Partners) asset management logic.

Each Berezka product is formed as a separate DAO with a separate wallet.

There are also partnering DAOs build and managed by Berezka DAO and separate geographical or product partners (e.g. EmiFlex, SkyFlex, RumuFlex, etc.) Some partnering DAOs are open to market, others are used as closed shells for selected partners and users.

E very participant allocates capital to the selected DAO and receives LP tokens of such Berezka product (FLEX, DYNA, BDQ, etc.). The logic behind LP token prices is described in the Berezka DAO token prices section

All activities in all Berezka DAO products are governed by the Berezka DAO GP tokens (BEGO) via Aragon interface.

Governance is performed via a series of voting on all activities.

All data is on-chain 24/7 and is kept in history forever.

Assets of all DAOs within Berezka products are either on wallets of such DAOs or on DeFi platforms (I.e. smart contracts of such DeFi platforms) which means that all assets can be withdrawn in full at any point of time, only subject to the Ethereum network speed. No lockups.

Berezka DAO is experimenting with various yield farming models for BEGO (governance) tokens and my launch a version of such program at some point of time in the future.

We will issue a separate announcement once the decision is made and the appropriate model is selected, tested and accepted.

Fees & Expenses

A ) 2 types of expenses on “Ethereum gas”:

Following the overall practice on the DeFi market each participant accepts Ethereum gas costs for any transaction related to entering or leaving from Berezka DAO products. Such Ethereum gas costs are transparently seen in particiapnts’ personal wallets (Metamask, Frame, Ledger, etc.) before signing any transaction.
All activities within DAO are organised via Aragon voting on Ethereum network (token request approvals, capital conversion and allocation to various pools and trading pairs, rebalancing, back conversion and capital withdrawal to participants, etc.) Since all voting actives are performed on Ethereum blockchain, they incur additional gas expenses. Such expenses are deducted from the asset appreciation of each Berezka DAO product.

B ) Success fee — is the only fee taken within each Berezka DAO product and redistributed among holders of BEGO tokens

As of January 2021 Berezka DAO product are subject to the following success fees

20% success fee on Berezka Deposit, Flex, Dynamic, Skyflex, Emiflex
35% success fee on Berezka BTC/ETH

C ) Success fee mechanics

Success fee is calculated every 10 days on each Berezka DAO product.

The calculated amount is transferred from each wallet of each DAO to Berezka DAO vault and is kept there till end of each month

On the 30th of each month the success fee is recalculated again for the full month. Should there be some corrections due to market or other price fluctuations a portion or all fees from Berezka DAO vault are transferred back to each Berezka product to cover for the losses.

The remaining amount is distributed from Berezka DAO vault among BEGO holders.

(See “token price calculation — simplified example” for more details)

Berezka DAO token prices

Each Berezka DAO product has a representative token.

Berezka Deposit — BDQ
Berezka Flex — FLEX
Berezka Dynamic — DYNA
Berezka BTC/ETH — CBD (will be split in H1 2021)

Token prices are calculated using the classical mutual fund logic.

Token price calculation — simplified example:

Example 1

Suppose 3 participants allocated 1,000 USDT each and received 1,000 FLEX LP tokens each
That means that there are 3,000 FLEX LP tokens on the market, 3,000 USDT on Berezka FLEX wallet, with the FLEX LP price of 1 USDT per token
Suppose Berezka FLEX deposits these 3,000 USDT to various lending pools and trading pairs on DEXes and doubles this amount in 10 day. So now there is 6,000 USDT on Berezka FLEX wallet
On the 10th day of the month Berezka FLEX calculates its success fee of 20%, which is equal to 600 USDT (3,000 USDT initial capital, +3,000 USDT earning within 10 days x 20%). 600 USDT is transferred to Berezka FLEX vault, leaving 5,400 USDT of total assets in Berezka FLEX wallet.
FLEX price now is 1,8 USDT (5,400 USDT divided by 3,000 FLEX tokens in circulation)
One of the first participants decides to leave and take away the profits. So a withdrawal is made for 1,000 FLEX tokens at 1,8 USDT per FLEX for a total of 1,800 USDT
Now we have 2,000 FLEX tokens in circulation, 3,600 USDT in Berezka FLEX assets on the wallet with the FLEX token price at 1,8 USDT

Example 2

A new participant comes in with 5,400 USDT. Now with the FLEX price of 1,8 USDT, this new participant receives 3,000 FLEX tokens.
So now, there are 5,000 FLEX tokens in circulation (2 x 1,000 FLEX + 3,000 FLEX) and 9,000 USDT in Berezka FLEX assets on the wallet with the average FLEX price = 1,8 USDT

Example 3

Suppose we invest the assets from the new participant and rebalance the previous positions, but in another 20 days, right by the end of the month, the market is depressing and we are taking a short loss on our positions. So now out of the initial 9,000 USDT we only have 8,000 USDT in assets.
The FLEX price is now 1,6 USDT (8,000 USDT divided by 5,000 FLEX). This means that we need to recalculate the success fee. The following rules apply:

Since one of the 1st investors already left and withdrew his/her assets, then the success fee on such assets is kept as a final success fee for eventual distribution among BEGO holders. The deal is done, earning is made, commission is taken.

Since the previous success fee was taken before the last participant entered Berezka Flex, and there are no gains for this participant up to now, the last participant is excluded from the success fee calculation of this month.

Berezka DAO

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