> For the complete documentation index, see [llms.txt](https://docs.oldmoney.io/mfer/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.oldmoney.io/mfer/mfer-dao/funding.md).

# Funding

All the revenue generated from the Fuckery Protocol comes in the form of $ADA and is allocated to 2 different funds that drive value in the network.

<figure><img src="/files/ZGixpSdJaXLfj7nxr3TL" alt=""><figcaption></figcaption></figure>

The Treasury is a fund that drives the value creation in the network via a continuous allocation of funds using the Proposal process. The Treasury fund is also responsible for keeping the DAO functioning by covering operating expenses and maintenance costs.

Every quarter, a % of the Treasury is put up for all Organizations to utilize and focus on their specific goals using the Proposal Process.&#x20;

The % of the Treasury isn't divided among the Organizations, but rather they all share in the ability to contribute value in exchange for the funding to do so.

The $ADA rationed by the Treasury each quarter doesn't have to be allocated during that quarter. Instead, it's an ongoing pool of funding that continues to grow if the $ADA isn't used. The Proposal process is open-ended, so as long as you contribute to the protocol, you can apply for the funds.

A % of the quarterly allocation is also divided among the Organization Leaders for their services.&#x20;

<figure><img src="/files/J7klSIt3TADHpd6lL1xS" alt=""><figcaption><p>Diagram of Treasury Funding cycle that happens each Quarter with Leader payouts</p></figcaption></figure>

The Treasury funds usage outside of the quarterly allocations may be any of the following:

* Operating expenses of existing and new tech, hosting, and SaaS products
* Legal fees for the DAO
* CPA fees for the DAO
* Stake Pool Maintenance

Estimated quarterly expenses are subtracted from the Treasury before the % allocation for the quarter is determined.

All of the Treasury funds can't be held in $ADA since we have recurring USD expenses and debt. We will maintain a % of the Treasury as a stablecoin (ex: $DJED) to protect this downside. The balance is only maintained via incoming revenue in the form of $ADA that can be converted to the stablecoin. Stablecoin funds that exist in the Treasury never are used to buy $ADA to bring the % back to the desired level.

The Reserve is a fund that backs the value in the network and is a mechanism to protect the long-term stability of the Fuckery Protocol.&#x20;

The $ADA in the Reserve is controlled by smart contract functions owned by the DAO with incentive mechanisms to allow network participants to control the supply.

There is a Reserve Target set by the Governance Options that control the collateral health when it comes to burning $MFER.

Full transparency between the Reserve and Treseasry exists on-chain and is summarized for consumption via the MFER Dapp.

<figure><img src="/files/9AlSmQnTNlT0n13rQf8n" alt=""><figcaption></figcaption></figure>

The $ADA held by the Treasury and the Reserve is also allocated to the Stake Pool. $MFER generated by the Stake Pool because of this allocation is automatically burned.

Management of the Treasury and Reserve is handled via multi-sig wallets that the Organization Leaders possess.

All Funding configurations are controlled by Governance Options.

## AFTER INITIAL REVIEW

* [ ] Add details on the multi-sig wallet process
* [ ] Add details on how Treasury funds are distributed for Proposals and operating expenses
* [ ] Add details on stablecoin balance and conversion responsibilities
* [ ] Add the formula to Treasury split each Quarter
* [ ] Add the formula to calculate the Reserve Target