The Connect Financial Governance Model

We have two primary operating bodies: The decentralized autonomous organization (DAO) and the Treasury.

What is the DAO?

The DAO ensures that rules are maintained on the blockchain and handles all DeFi aspects of Connect Financial. The DAO is responsible for setting Treasury Policies for such things as:

  • Control of distribution or release of new tokens

  • Approving the increase in circulating supply as maybe necessitated by the card program

  • Approving the allotment of tokens for staking rewards or other future programs

  • Setting the value of any epoch for pCNFI tokens after the end of a period based on the performance of the Protocols and revenue in the treasury pool

  • Controlling the interest rates and performance fees.

Platform changes may be introduced due to product performance, market shifts, government regulations, and other external factors, just as in any other financial organization. In many cases, changes will not affect legacy users. For example, if the DAO decides to increase the staking requirements for the silver tier, this may not apply to current silver tier users. However, penalties for unstaking may apply to everyone.

Proposals and voting will be located on snapshot.org

What is the Treasury?

The Treasury is the public-facing accounting of the tokenomics for Connect Financial. The primary accounting is for the distribution and allocation of all CNFI tokens.

The Treasury covers all physical and traditional products, such as credit cards, and interest on assets under custody. The Treasury also maintains the token supply ledger and the allocation of tokens for certain activities, such as the staking rewards.

Both of these teams work together to introduce new initiatives, support users and provide complete transparency. Consider this example:

  1. The community wants to offer an annual charitable grant of 10,000 CNFI.

  2. The DAO votes on proposals.

  3. If passed by the weighted vote of DAO holders, the proposal is carried out via smart contract.

  4. The DAO informs the Treasury that they need 10,000 CNFI annually for the grant.


DAO and Treasury rewards

Participating in the DAO requires users to hold CNFD tokens. CNFD are released at certain milestones and the supply and release of CNFD is, in itself a function of the DAO.

When you stake CNFI, you become eligible to earn pCNFI(n). pCNFI is a quarterly issued treasury token that passively accrues and can be redeemed at the end of each quarter and can either be restaked or redeemed for face value. This is in addition to the daily rewards issued to the staking pool from the treasury.

Currently, pCNFI is earned by staking CNFI and by holding and participating in the DAO by holding CNFD tokens. Delegating your CNFD tokens to another user still rewards you with pCNFI as long as your delegate is active. pCNFI is broken into Epochs, or periods of time, and will increment at the end of each Epoch, i.e. the first epoch you would receive pCNFI(1), then the subsequent epoch would generate pCNFI(2).

Learn more about staking CNFI.


How is the value of pCNFI determined?

The performance of the Connect Protocols are mainly tied into the Credit Pools that serve our Card members; the interest paid on these lines is charged a performance fee by the Protocol firstly, then paid out to the individual pool contributors. The performance fee or other revenue is then applied to our Credit Pools or other Vault Strategies to further enhance the value of the Treasury.

At the end of an Epoch (currently set to be monthly) the DAO will assign a total performance value to that Epochs pCNFI which will then be redeemable by the pCNFI holders for either face value, or can be kept in the Treasury to compound on itself as its base value is left in the pool to earn more overtime.

Each pCNFI is given a share value at the end of its Epoch based on the pool's performance; this share value will increase over time if it is kept in the pool. pCNFI is tradeable, assignable or sellable much like any other ERC-20 token.


How can I earn CNFD?

In Q2 2021, a governance snapshot was taken for users that met staking criteria. Although a date has not been released as yet, participating members will be air-dropped CNFD at a later date.

Follow our Discord for announcements regarding the CNFD airdrop.

At this stage, no further CNFD events are scheduled.

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