Profit sharing

An example

The profits are shared equally between NFT holders.

Any address that holds a Stacks NFT will be able to access a contract that allows for the profit distribution. This contract will then calculate what's the share that the NFT can access and allow the address to withdraw that.

If an address holds more than one NFT then they'll be able to withdraw the amount corresponding to the total share of the NFTs they hold.

The share of the profit the NFT can access will be calculated with basis on how many NFTs were minted up until that point (if the NFT is a recent mint) and the number of NFTs that existed when the last batch of profit was added to the contract. To make it fare on all holders, someone that minted a NFT today can't access profits from 3 months ago.

Depending on when the NFT is minted that'll determine what profit share batch you can access. Profit is added to the contract monthly, so when the next profit batch comes after you mint, you'll be able to access it.

If you plan on selling your NFT make sure you drain your profits before the sale goes through.

As an example let's say that in a given month the investments from the treasury generated a return of 100,000 USDC (investments are diversified, but all profits are converted to USDC). These 100,000 USDC will be added to the smart contract that allows each NFT holder to access their share.

If there are 1,000 Stacks NFTs minted (at the time of adding the profit), then the contract will only allow for 1/1000 withdrawal per NFT holder for these NFTs. Like said above, a user can hold more than one NFT and then that address has access to a proportional percentage of the profits.

Supply and demand

As you can observe, the more Stacks NFTs in existence, the smaller the slice of the pie each holder has access to.

At first glance this seems negative, but the truth is that each NFT minted comes as another contribution to the treasury. So the more NFTs minted, the bigger the investment principal and the bigger the returns.

This also means that a fat treasury will make the Stacks appreciate, as people will want to pay to access that monthly recurring revenue.