Token injection

Understanding the FRQTAL economy, the use of its resources, and the leverage that the protocol employed for its launch is fundamental for anyone interested in the platform. This includes the deals made with early investors who bet on the project, as well as the agreements reached with venture capital.

It is important to mention that gradual token injection in a protocol is a strategy used by many projects at the beginning of their value, or even later on, as is the case with Uniswap and Ethereum. The reason for this injection is to control the price to avoid abrupt fluctuations that may affect the market, such as sudden drops, whales devouring coins, unsustainable price increases, or drastic bullish movements, among others.

In FRQTAL, we employ a fund injection strategy during the first few months of the protocol's life to avoid a sudden increase in price, due to the initial amount injected into the liquidity pool. With this, we ensure two things: fulfilling the prices agreed with investors and maintaining a stable price during the first and second wave of institutional contracts with major brands and artists.

However, this strategy also implies risks for both early investors and the first 100 users of the protocol. Fortunately, these investors are aware of token injection movements and the first 100 users bet on the medium-term growth of the coin. It is important to mention that these movements are entirely public, and any user can find them.

On the other hand, this token injection is not permanent. After a massive launch of our app and protocol, this injection will come to an end with a stable market price, controlled by free supply and demand. Below is a table showing token injection, the expected market price, capital, and tokens placed in liquidity, as well as a risk line at each stage of the injections.

In the top graph, it can be observed how a misuse of injected coins can affect the price, but it also shows how coin injection can control the price at the time of launch, benefiting FRQ by achieving stability. It is important to note that the risk decreases completely in the seventh month after the liquidity pool's launch.