Frequently Asked Questions

What is 3A DAO?

3A DAO is a non-profit decentralized autonomous organization (DAO), building technology solutions for self-sovereign finance. Self-sovereign, in the context of finance, means that users don’t have to borrow capital from external 3rd parties, but can access the liquidity of their own assets instead. It means they don’t depend on any 3rd parties when it comes to capital availability, interest rates, custody, approvals, etc.

The 3A zero-interest lending protocol is the first solution launched by 3A DAO. It allows any token holders to use their digital assets as collateral to borrow interest-free EURO3, a decentralized, non-custodial payment coin pegged to EUR. Web3 protocols and projects can use the protocol to de-risk their treasuries and create deep, protocol-owned liquidity for their native tokens at zero interest. It also allows users to access sustainable, low-risk yield strategies.

Initially, 3A solutions will support whitelisted ERC20 tokens, however in the future 3A protocol will support tokenized real-world assets, including invoices, real estate, and shares of private companies.

The on-chain, non-custodial, and decentralized lending protocol issues its own over-collateralized, Euro-pegged native currency, EURO3. EURO3 loans need to maintain a minimum collateral ratio individually set for each whitelisted token by the risk model and are secured by the Stability Pool. In case the Stability Pool does not suffice, the vault’s assets and liabilities will be picked up by the community of vault owners.

Is the 3A platform truly secure?

3A DAO works with a number of cybersecurity experts and providers to make sure the protocol is secure:

• The smart contracts have been audited

• All on-chain activity is being monitored by AI and all potentially malicious activities are flagged. If this happens, safety protocols are automatically initiated

• The protocol has several safety features on the smart contract level that can prevent malicious transactions

• The protocol uses the best in class price oracles solutions

Does 3A DAO solve any real problems?

Traditionally, businesses and individuals had to rely on 3rd parties to access the liquidity of their assets. 3rd parties like banks give car loans and mortgages to individuals or provide trade finance for businesses. The asset owner has to apply for a bank loan, which can be granted or denied, and then pay recurring interest until the loan is paid back in full. This means that the asset owner is dependent on the lender, and the ability to access the liquidity of their assets is determined by the availability of the capital and its price (the recurring interest).

The recent decentralized finance (DeFi) projects and protocols developed a new way of providing loans based on blockchain protocols and tokens. However, the overwhelming majority of the DeFi projects and protocols still operate under the traditional finance paradigm of relying on a 3rd party lender providing capital and charging recurring interest.

Self-sovereign finance (SSF) is an approach that advocates the use of technologies like blockchain to conduct financial transactions without the need for relying on any 3rd party, including traditional banks or individual DeFi lenders. 3A protocols are a manifestation of SSF.

3A users don’t transact with any 3rd party. They transact with their own vault, a smart contract that only they can control. They can access the liquidity of their assets just by locking them up in their own vault, without any involvement of any 3rd party.

How 3A DAO provides self-sovereign finance?

• 3A is censorship-resistant. No one is needed to approve a loan, so no one can deny a loan.

• Loans created with 3A vaults are not limited by the availability of external capital.

• There is no recurring interest that needs to be paid. Users are accessing their own capital, they can “borrow from themselves”, so there’s no one who needs to charge recurring interest.

• The supply of the EURO3 is not limited by the ability and willingness of the borrowers to pay the recurring interest

What is EURO3?

EURO3 is a non-custodial, over-collagenized payment coin pegged 1:1 to Euro. In contrast with stablecoins, EURO3 is backed by a basket of on-chain digital assets that distributes the collateral risk and allows broader accessibility to DeFi protocols and real-world financial products.

What are the EURO3 use cases?

The backbone of the 3A platform is its non-custodial, over-collagenized payment coin pegged 1:1 to Euro (EURO3). In contrast with stablecoins, EURO3 is backed by a basket of on-chain digital assets that distributes the collateral risk and allows broader accessibility to DeFi protocols and real-world financial products.

Lending: 3A allows users to access the liquidity of their assets without selling them. Users may deposit their crypto-assets, (for example $ETH) as collateral to a smart contract called Vaults to mint and withdraw EURO3 stablecoin.

Stability Pool: The Stability Pool is the EURO3 liquidity of the protocol that acts as the first line of defense to maintain system solvency by paying off the debt of the liquidated Vaults. The Stability Pool is funded by EURO3 holders who deposit their stablecoins into the Stability Pool to make gains from liquidations, EURO3 arbitrage and earn 3ADAO rewards in A3A tokens

Debt Liquidations: Existing asset-based lending platforms use auctions or discounted sell-offs for liquidations, causing delays and suboptimal prices. In contrast, 3A platform automatically liquidates undercollateralized Vaults without the need for buyers or bidders. Liquidated borrowers retain EURO3, and collateral is distributed to the Stability Pool or other Vaults with the same collateral if Pool liquidity is insufficient.

Can EURO3 be classified as an algorithmic stablecoin?

No, EURO3 is an over-collateralized, permissionless coin backed by on-chain collateral. The collateral assets are locked up in vaults by users who mint EURO3 loans.

The maximum value of EURO3 in circulation is always determined by the value of assets in vaults, not by an arbitrary algorithm.

Is it possible for EURO3 to deviate from its peg to EURO?

3A utilizes external collateral for EURO3, anchoring its value in independent assets with its own market value. The A3A utility token is not used as collateral.

Under normal market conditions, EURO3 will be always over-collateralized, which means there is always more than 1 EURO worth of collateral in the vaults for every 1 EURO3 in circulation.

This is why vault owners have incentives to buy EURO3 if its price is under 1 EURO to repay loans and mint more EURO3 to sell it if the price is over 1 EURO. Additionally, the protocol is designed to autonomously recover from cataclysmic market events. Even if all collateral in Vaults loses 99% of its value and EURO3 deviates from its peg, the redemption mechanism enables recovery.

What is A3A?

A3A is a native 3A DAO utility token that is used for community rewards and incentives, to accelerate adoption, tech development, stability pool staking, and providing liquidity mining rewards to EURO3 trading pairs. A3A stakers share all revenue the 3A DAO protocol generates.

A3A tokens are awarded to the Stability Providers and Liquidity Providers of the EURO3 liquidity pool. Additionally, the tokens are earned by users as referral rewards. A3A token holders can stake them to receive discounts on the past and future fees charged by the protocol and to repay their EURO3 loans.

This means that staking users can enjoy using the protocol for free or paying back their loans, but they can’t “cash out” the rewards, so they can’t use the rewards as passive income or dividends. There is no lock-up on the staked A3A tokens.

A3A holders can participate in the governance process of the DAO. They can approve Managing Members of the DAO and vote on major decisions about the protocol, like approving the risk model or token allocations and major technical updates and releases.

To summarize, the utility of the A3A token includes:

• Free or discounted usage of the platform and value-added services

• The ability to participate in governance

• EURO3 loan repayment

Does 3A DAO need a token?

EURO3 is obviously needed. Without an over-collateralized, non-custodial payment coin there is no 3A platform. Relying on external sources of liquidity and capital, for example using a fiat-backed stablecoin, would mean that the platform has to charge recurring interest and is dependent on 3rd parties who provide capital, so it’s not permissionless or non-custodial anymore. A3A is needed to provide customizable, permissionless access to the 3A platform for both end users and projects who want to whitelist their tokens and be a part of the 3A DAO. Additionally, A3A is used to facilitate adoption and orchestrate incentives in the ecosystem. Without A3A there can be no 3A DAO, that is operating not for profit. Instead, there would have to exist a for-profit web2-style corporate entity that would maximize value extraction from the platform and the ecosystem.

A3A Token Allocation token economics (tokenomics)

Community Allocation:

A3A in circulation: 95,105,392, 9.5% of the total supply

Stability Pool rewards: 100,000,000, 10.0%

Stability pool rewards will be released gradually, 50k tokens per day until the end of 2026, then the DAO can revise.

Community rewards and incentives (includes market making, liquidity mining, referrals, etc.): 200,000,000, 20.0%

Community rewards and incentives will be released gradually, initially 4.5 million per month, then 3m after June 2024, 1.5m after June 2025, until the end of 2026, then the DAO can revise. These rewards will be used to bootstrap EURO3 and A3A liquidity, facilitate market making and incentivise the adoption of the protocol (sharing tokens with our community for referrals, instead of selling the tokens and paying for advertising)

Community Fund (not to be sold): 100,000,000, 10.0%

The community fund will not be sold, but used to earn cashbacks. This way the DAO can use the cashbacks to pay the bills long term. The community will vote on what to do with any surplus (grants, donations etc).

Team allocation: 200,000,000, 20.0%

The internal team will vest tokens over 4 years lineary, with a 3 month cliff to incentivise long term commitment to the DAO

Early Supporters: 100,000,000, 10.0%

Subject to a 4 year vesting schedule.

DAO Treasury: 204,894,608, 20.5%

The distribution schedule until the end 2026 is as follows:

A3A Token Distribution (in millions)

After 2026 the DAO will decide how to distribute the remaining tokens.

What are premium services and what are the benefits in using them?

3A premium services are here to protect users of the protocol and help them maximize their return without the need from the user to monitor and act on circumstances daily.

The first service is the Vault Optimization Bot is designed to protect users from the liquidation of vaults. When Vault Health Factor (HF) is falling the bot can repay the debt part of the vault debt in order to keep to vault from liquidation and when HF is rising, the Bot borrows more EURO3 and puts them into the stability pool in order to maximize users returns.

More services are in the pipeline and will be introduced in the future.