Treasury

Treasury and Liquidity Management

WOMO features an intelligent Treasury system that auto-manages liquidity and protocol-owned assets to ensure longevity and efficiency. The Treasury contract plays multiple roles: it holds reserves, manages liquidity positions, and deploys assets to generate yield, all while interfacing with external DeFi protocols.

Protocol-Owned Liquidity: Through the bonding mechanism described below, the WOMO Treasury accumulates LP tokens (such as $WM/$S and $WM/$USDC). A portion of the liquidity pool is owned and controlled by the protocol itself. The Treasury will always maintain at least 25% of total assets deployed as liquidity to ensure healthy trading conditions, minimize slippage, and guarantee exit liquidity even during periods of volatility. The remaining 75% of the assets will be actively allocated across various optimized strategies such as yield farming, liquidity provision on partner protocols, or other yield-generating opportunities, maximizing returns while maintaining the protocol's financial resilience.

Active Liquidity Management: The Treasury will be actively managed by the team or DAO-approved. Treasury managers will actively seek yield opportunities, optimize liquidity deployment, and ensure that $WM markets remain healthy and liquid.

Deploying Assets to Yield: Unlike a static treasury, the WOMO Treasury puts idle assets to work. For instance:

• If the Treasury holds a large amount of $S or $USDC (from bonding or fees), those assets can be deposited into yield-bearing protocols. They might supply $USDC to a lending protocol (earning interest), or deposit $S into staking or farming. The idea is to earn additional returns rather than letting assets sit idle.

• If the Treasury holds excess $WM tokens (though ideally most $WM in Treasury would be from buybacks or unallocated portions, and even those are subject to rebases), it could potentially use them in strategic ways like providing one-sided liquidity or seeding new pools.

Liquidity Partnerships: The documentation mentions partnering with DeFi protocols.

Yield Flow Back into the Protocol: The ultimate goal of the Treasury’s activities is to generate additional value that flows back to $WM stakeholders. The yields and profits earned (trading fees, interest from lending, farm rewards, etc.) accrue in the Treasury. These gains can be used in various ways:

• Treasury Growth: Simply growing the Treasury’s reserves increases the intrinsic value or backing of the $WM.

• Funding Rewards or Buybacks: The yield could be used to fund ongoing reward programs. For example, if the treasury earns a lot of $USDC, it could buy $WM and burn – this would further deflate supply and push price up, benefiting all holders. Or it could use earnings to continue paying out additional staking rewards.

• Future Initiatives: The treasury might invest in new opportunities or support governance-decided initiatives (marketing, development, etc., though those are more operational uses rather than directly affecting tokenholders).