What Is Cult DAO (CULT)? | Use cases, Staking, and Details | Notum
Nov 08, 20225 min read
What Is Cult DAO?
Cult DAO is an Ethereum-based project that intends to become a driving force in the struggle for justice, decentralization, and financial freedom. As part of Cult DAO, anyone, including politicians, anarchists, and just community members, can submit proposals to the DAO and receive funding and community support. Financing is carried out with the help of Cult DAOs Treasury. The treasury of the project is replenished with transaction fees collected by the protocol. A fee of 0.4% on each transaction is sent to the treasury and accumulates a USD value corresponding to the market value of 15.5 ETH. Cult DAO automatically sends 13 ETH to fund the project if the proposal has been approved, while 2.5 ETH is burned. The proposal can promote any idea that concerns the struggle against central banks, outdated financial structures, and the tyranny of sovereign states. In general, the creators of the project divide all potentially eligible proposals into three categories (guidelines):
- Fight against centralization;
- Further, the cause of decentralization;
- Directly benefit a noble cause.
To submit proposals, refer to the Guardian of the Cult DAO or become one yourself. The Guardians are the top 50 CULT stakers with the largest token share. The Guardians are responsible for which proposals to bring to the Cult DAO for voting. All other CULT stakers belong to the “The Many” category. So, the Guardians can only bring proposals, but they do not have the right to vote on them. Many are stakers who directly participate in the voting on the approval of proposals. In addition to the fact that the submitted proposal must meet at least two of the three guidelines described above, it must also contain a description of the five structural elements of the investee project.
- The total supply of the investee token. The token cannot have minting capabilities, which should be subject to audit.
- The percentage of the total token supply would be equivalent to 13 ETH. Simply put, users need to calculate how many tokens equal the sum of 13 ETH.
- Tokenomics. It is necessary to provide detailed and transparent information about the distribution of tokens, the lockup period, and all other features of the token.
- The audit report of the investee token and any smart contracts built into the project.
- Burning and distribution plan. The token can be distributed daily, weekly, biweekly, and monthly. However, the token lockup period cannot last more than 18 months. In addition, it should be noted that the vesting of the investee token takes place according to the disbursement rate proposed by the protocol. The disbursement amount is used to convert to the CULT token. CULT tokens are then burned (50%) and distributed (50%) among The Many.
For example, the fictional COIN DAO protocol assumes that 1.2% of the $COIN token vests once a month for 12 months. Every month, the protocol converts 0.1% of its $COIN token supply into $CULT instead of just distributing them among investors. Next, 50% of $CULT is burned, and 50% is paid to $CULT stakeholders.
Cult DAO Staking
As already mentioned, there are two categories of token holders in the Cult DAO staking:
- Guardians are the top 50 largest token holders. They can bring and champion proposals but do not have voting power;
- The Many are other stakers that have voting power.
When adding CULT to the staking pool, users receive a dCULT token, which displays their share in the pool. While the CULT token is a utility token of the project and is used for transfers, payment of transaction fees, and staking, dCULT is a proof of stake token that displays the proportion of the CULT staked. dCULT token cannot be transferred between users’ wallets. Stakers can use dCULT to redeem the initial deposit amount of CULT tokens and all rewards received during the staking period at any time.
RVLT token was launched on the Polygon network. RVLT token serves to reward The Many. The project's founder wondered why not turn the maintenance, participation, and promotion of the Cult ecosystem into full-fledged work with the RVLT token as a “salary.” RVLT has a similar economic model to CULT. However, while CULT is a reward token for revolutionary proposals, RVLT is a reward token for individual revolts. To submit the revolt proposals, users are required to stake RVLT. After adding RVLT to the staking pool, users receive uRVLT tokens displaying their share. uRVLT holders receive 25% of each approved individual revolt proposal. Specially designed CULTmanders manage individual revolt proposals. CULTmanders is a group of 490 randomly selected RVLT stakers who vote on the approval of individual revolt actions. CULTmanders are selected once every 15 days and receive voting power and a 5% reward (equally distributed among all CULTmanders) for being active and participating in voting.
The distribution of RVLT rewards is as follows:
- 40% goes to finance individual revolts.
- 25% is distributed among the stakers based on their share in the pool.
- 25% is burned.
- 5% is sent to the multi-sig wallet for further purchase and immediate burning of CULT.
- 5% is equally distributed among CULTmanders.
Cult DAO Benefits
Cult DAO is a young but ambitious project that aims to contribute to the destruction of the current unfair economic and social foundations. This kind of decentralized venture capitalist sponsors revolutionaries, proponents of decentralization, and those with some ideas to solve the problems of financial inequality. The key features and benefits of the project include the following:
- Longevity and sustainability. The founders of Cult DAO have created a unique project that uses the purest form of the decentralized autonomous organization governance model. No party can interfere in the project’s life, whether it is the creators themselves, stakers, or regulators. Smart token contracts are immutable and cannot be edited. The creators do not have any privileges and hand over the reins to the DAO participants. The latter, in turn, may not even follow the project's original goal.
- Self-sustaining. The protocol has a treasury that is gradually filled by collecting transaction fees.
- Hyper deflationary. The project’s creators understand the importance of healthy price growth, so they have implemented a burning mechanism. Thanks to this, the total supply of CULT tokens gradually decreases, which creates buying pressure and a price increase. In addition, users who participate in CULT staking also remove tokens from the circulating supply, thereby increasing their price.
- Justice. In addition to the project’s creators completely handing over control to the DAO, they took care of a fair and honest financing arrangement. Thus, large token holders cannot participate in the voting, excluding sole influence and unfair voting.
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