# YieldTree

A revenue-generating asset that requires an initial investment and rewards the holder with long term profits and bonuses.

## How it works

The supply of $FOREST is locked in the reward pool, and is only emitted by YieldTrees, therefore, YieldTrees are the only source of new $FOREST tokens.

### Cost

A YieldTree can be purchased after the <mark style="color:green;">$FOREST</mark> token has launched.

{% hint style="info" %}
1 YieldTree = 7.5 <mark style="color:green;">$FOREST</mark> tokens & 2.5 <mark style="color:green;">$FOREST</mark> worth in <mark style="color:red;">AVAX</mark>.
{% endhint %}

The investor has to lay in 7.5 <mark style="color:green;">$FOREST</mark> tokens, and a specific amount of <mark style="color:red;">AVAX</mark> that equals to 2.5 <mark style="color:green;">$FOREST</mark>. This exact amount of <mark style="color:red;">AVAX</mark> will be automatically calculcated and displayed.

The exact $USD price per <mark style="color:green;">YieldTree</mark> is calculated at the time of transaction, so this depends on the current price of <mark style="color:green;">$FOREST</mark>.

### Rewards

The YieldTree generates <mark style="color:green;">$FOREST</mark> tokens starting immediately after purchase. These tokens can be claimed or can be used to create a new <mark style="color:green;">YieldTree</mark> once enough tokens have been generated. This is called compounding.

The first 10 <mark style="color:green;">$FOREST</mark> tokens generate at a faster rate than usual to speed up the **return on investment** of the holder. Once this has completed, the daily rewards lower using a decay process until the base daily reward rate (0.06) has reached.

#### **Overview of the numbers**

Start ROI: 0.1 <mark style="color:green;">$FOREST</mark>\
Daily decay: -0.002 <mark style="color:green;">$FOREST</mark>\
Daily base rate: ~~0.04~~ <mark style="color:green;">$FOREST</mark> *0.06 for the first 365 days after public launch*

{% hint style="info" %}
Additional rewards can be added with [Core NFTs](https://forest-financial.gitbook.io/docs/nfts/core-nfts).
{% endhint %}

### Compounding

Unlike outright buying a new <mark style="color:green;">YieldTree</mark>, compounding does **not** require the investor to pay a certain amount with <mark style="color:red;">AVAX</mark>. 10 <mark style="color:green;">$FOREST</mark> tokens will be taken from the wallet instead.

## Allocation

View the diagram to see where our profits of an investor buying a YieldTree go to.

![](https://3488403461-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FhUaiEuA2mS42lhI5Yw2O%2Fuploads%2FYi3jTZhXOgkqQir1ZP4U%2FDiagram%20v2.png?alt=media\&token=88bb9cb9-428d-45d1-9432-85085135c807)

## Maximum YieldTree limit

As can be imagined, over time as more and more <mark style="color:green;">YieldTrees</mark> are created, the reward pool cannot sustain the outgoing <mark style="color:green;">$FOREST</mark>. This requires the treasury to help offset this expense, causing our investments to grind to a halt.

To remedy this, Forest Financial will have a maximum amount of <mark style="color:green;">YieldTrees</mark> that will be sold by the protocol. Once this limit has been met, no new <mark style="color:green;">YieldTrees</mark> are able to be bought from the protocol. This also allows us to calculate our daily expenditures and take them into account when designing the plans to grow our treasury.