❓FAQ

Is METF an Ohm fork?

No, METF is not an Ohm fork. The only similarities you see would be the User Interface (UI), as well as the bonding system. The reason for that is so the team can focus on the more important ticket items instead of UI. These will include items like value accrual strategies, onboarding more promising projects into MM ecosystem, all to bolster the price of the METF token.

METF is backed, not pegged.

Each METF is backed by 1 MMF, not pegged to it. Because the protocol AUM backs every METF with at least 1 MMF, the protocol would buy back and burn METF when it trades below 1 MMF. This has the effect of pushing METF price back up to 1 MMF. METF could always trade above 1 MMF because there is no upper limit imposed by the protocol. Think pegged == 1, while backed >= 1.

That said, as mentioned, the METF token adopts a rising price floor strategy. This means that the policies will be tweaked such that the METF token will require 2 MMF tokens to back each METF token in existence. This has the effect of drastically increasing token backing, and is generally bullish for the protocol overall. The reason: the METF Assets Under Management (AUM), are self-sufficient and are growing at a satisfactory pace such that the protocol can be less aggressive in receiving bonded assets.

So why 1 METF : 15 MMF backing price at the beginning? You might say that the METF floor price or intrinsic value is 1 MMF. We believe that the actual price will always be 1 MMF + premium. The premium is allotted as such due to the initial funds that will be pooled into AUM for the MM ETF. These includes Protocol Owned Liquidity (from trading fees) accumulated thus far on MMF and the amounts from the METF launchpad raise as well.

How does it work?

At a high level, MM ETF consists of its Assets Under Management (AUM), protocol owned liquidity, bond mechanism (minting), and managed staking rewards that are designed to control supply expansion.

Bonding in the "Mint" page generates profit for the protocol, and the protocol AUM uses the profit to mint METF and distribute them to stakers. With LP bond, the protocol is able to accumulate liquidity to ensure the system stability.

Why is PCV (Protocol Controlled Value) important?

As the protocol controls the funds in its AUM, METF can only be minted or burned by the protocol. This also guarantees that the protocol can always back 1 METF with 1 MMF. You can easily define the risk of your investment because you can be confident that the protocol will indefinitely buy METF below 1 MMF with the AUM assets until no one is left to sell. You can't trust the FED but you can trust the code.

As the protocol accumulates more PCV, more runway is guaranteed for the stakers. This means the stakers can be confident that the current staking APY can be sustained for a longer term because more funds are available in the AUM.

Why might the market price of METF be volatile?

The MM ETF protocol will be launched as a fairly new concept, whereby speculators will attempt to determine the fair value of the ETF, performing buys and sells. The reality is that because METF is launched as a cryptocurrency, low/lack of liquidity is what results in high volatility. At the beginning, it is more or less guaranteed for the protocol to have less than ideal liquidity, and this is why there is high likelihood of high volatility. As the protocol grows, we should see a more mature price action where primary value accrual for METF holders will be less on price action, but more on staking rewards. This is ultimately the most ideal as this means that the METF token now has high liquidity (which means low slippage when you sell), but also has a stable price action, which means investors now will be able to more fairly determine an investment value. At the core of it all, METF is supposed to be a long-term protocol that rewards the early holders.

What is the point of buying it now when METF trades at a very high premium?

2 main reasons you would do so:

1. You can buy and stake METF to earn more METF. Recall, METF is created only when protocol grows from adding more Assets Under Management (AUM), which seeks to apply a rising price floor to the token.

2. Rising price floor strategy will ensure that lesser METF tokens enter the circulating supply over time. This rewards early buyers and stakers who would have been able to accumulate more METF at the beginning.

What is APY?

APY stands for annual percentage yield. It measures the real rate of return on your principal by taking into account the effect of compounding interest.

One interesting fact about APY is that your balance will grow not linearly but exponentially over time! Assuming a daily compound interest of 2%, if you start with a balance of 1 METF on day 1, after a year, your balance will grow to about 1377.

Why does the price of METF become irrelevant in long term?

As illustrated above, your METF balance will grow exponentially over time thanks to the power of compounding. Let's say you buy a METF for $400 now and the market decides that in 1 year time, the intrinsic value of METF will be $2. Assuming a daily compound interest rate of 2%, your balance would grow to about 1377 METF by the end of the year, which is worth around $2754. That is a cool $2354 profit! By now, you should understand that you are paying a premium for METF now in exchange for a long-term benefit. Thus, you should have a long time horizon to allow your METF balance to grow exponentially and make this a worthwhile investment.

What will be METF intrinsic value in the future?

The METF policies will be tweaked over time to increase the price floor. This can be achieved when the AUM for the protocol grows over time.