# π±Friddy Backing

## Friddy Backing

Assuming Friddy Backing equals the sum of LP deposits plus total LP profits plus (merchant volume - merchant settlement), and assuming that the LP buys Friddy for each deposit as it takes them 1% profit more we can calculate it using the following formula:

$FB = (\sum_{i=1}^{L} DP_i + \sum_{i=1}^{L} (DP_i \cdot 0.01 \cdot \frac{MT_i}{AT}) + (MV - MS))$

where:

$FB$ is Friddy Backing

$L$ is the number of LPs

$DPi$ is the deposit amount of the $

*i-th LP*$$MTi$ is the total transactions processed by the $

*i-th LP*$$AT$ is the average transaction of the merchant

$

*MV*$ is the merchant volume$

*MS*$ is the merchant settlement

Using the previous values, with 497 LPs and assuming each LP deposited an average of 3000 USD and made a profit of 1% on their transactions, we can calculate,

Friddy Backing is approximately $49,259,803.92 USD.

## Surplus of Friddy Coin Circulation

Friddy Coin Circulation = Friddy Backing - Merchant Volume

Substituting the given values, we get:

Friddy Coin Circulation = $49,259,803.92 USD - $40,000,000 USD = $9,259,803.92 USD

Therefore, the current surplus of Friddy Coin Circulation is approximately $9,259,803.92 USD.

This surplus comes from the LPs buying Friddy coins from the system to process the settlements for the merchants. And that is the same amount of Extra backing Friddy has, since the LP

## Reconciling the Model Numbers

Assuming that 497 LPs deposit the same $3000 and receive 1% of their total compounded profits for 30 days, we can reconcile the numbers. The total deposits would be around 59 million, but since we are assuming the LPs are cashing out the 1% profit, the total deposits would be around 49 million. This is the same 30% profit that LPs are making on their deposits. Therefore, the model is accurate.

## FriddyP Coin Circulation

To calculate the FriddyP Coin Circulation, we need to know the total profit made by all LPs on all transactions for the merchant. This can be calculated as follows:

$Total \ FriddyP \ Circulation = \sum_{i=1}^{L} (DP_i \cdot 0.01 \cdot \frac{MT_i}{AT})*2$

where:

$LL$ is the number of LPs

$DPi$ is the deposit amount of the

*i*β*thLP*$MTi$is the total transactions processed by the

*i*β*thLP*iβthLP

$AT$ is the average transaction of the merchant

Assuming the same values as before, with 497 LPs, an average deposit of 3000 USD per LP, and an average transaction of 170 USD, we get the total FriddyP Coin Circulation would be

$Total \ FriddyP \ Circulation = \sum_{i=1}^{497} (3000 \cdot 0.01 \cdot \frac{3000}{170})$

Therefore, the current FriddyP Coin Circulation is Approximately 529,411.76USD

Since FriddyP Coins are issued to LPs as their profit coin, this amount represents the value of all FriddyP Coins in circulation at a given moment in time. Please note this is the same number that comes from multiplying the total merchant volume by the compounded profit of each LP for depositing the same $3000 each day for 30 days.

## Burns Flow and Liquidity Flow

This is a comprehensive explanation of the circulation of Friddy coins and FriddyP profit coins in the system, along with the role of various parties involved. It also gives a detailed explanation of the flow involving the merchant, the buyer, and the liquidity provider (LP)

Friddy coin is Burned only when the merchant asks for the settlement in Crypto for our backing. This is how it impacts the token economy stability:

Assume that the merchant has decided to take their settlement from the backing, which triggers two calculations the first is the merchant gets the backing in USDC after deducting an average of 4% from the settlement amount, and the result is called Settlement from Backing and that burns the same amount of Friddy coins from the backing create a model in latex that calculates Settlement from Backing and the remaining Friddy Backing

To calculate the Settlement from Backing, we can use the following formula:

$Settlement from Backing=MSβ(MSβ 0.04)Settlement from Backing=MSβ(MSβ 0.04)$

Where:

$MS$is the Merchant Settlement

Assuming the same values as before, we have:

$Settlement from Backing=40,000,000β(40,000,000β 0.04)β38,400,000Settlement from Backing=40,000,000β(40,000,000β 0.04)β38,400,000$

Therefore, the Settlement from Backing is approximately $38,400,000 USD.

To calculate the remaining Friddy Backing after the burning of coins, we need to subtract the Settlement from Backing from the Friddy Backing:

$Remaining Friddy Backing=FBβSettlement from BackingRemaining Friddy Backing=FBβSettlement from Backing$

Substituting the given values, we get:

$Remaining Friddy Backing=49,259,803.92β38,400,000β10,859,803.92Remaining Friddy Backing=49,259,803.92β38,400,000β10,859,803.92$

Therefore, the remaining Friddy Backing after the burning of coins is approximately $10,859,803.92 USD.

The liquidity flow: How does the system guarantee liquidity, especially in scenarios of high demand or low supply? How are liquidity providers incentivized to maintain this flow, and what safety mechanisms are in place?

In the event of high demand and low supply in Friddy's ecosystem, merchants may send more transactions in certain areas and regions than Friddy has liquidity providers (LPs) to process those transactions. If there is enough liquidity in some areas, Friddy can scale the number of LPs for merchants in those regions. The needed LP formula tells us exactly how many LPs we need to scale further. This problem has no financial impact on the coin, but it could potentially result in a loss of business volume for Friddy.

The other problem is that if Friddy has high supply and low demand, it is actually a better problem to have. This means that we have more Liquidity Providers (LPs) in a region than we have merchants. However, this is a highly unlikely problem to have since we control our go-to-market (GTM) strategy and the number of LPs that are approved and onboarded. Therefore, we will always be able to control the supply to make sure that our current LPs are efficient. LPs would always be interested in joining Friddy because they will be able to make a significant margin on their initial investment, making the probability of having a high supply almost always the case.

There are two reasons for this. First, the supply of the merchant's demand is ever-incremental by adding more merchants, which promises fast cash-out for selling crypto assets, and that is the main goal of our LPs. Second, the compounded gain that LPs get using Friddy is another reason for high supply.

The rates for transactions: How are the rates for the burns and liquidity transactions determined? What factors influence these rates, and how are they adjusted to maintain system balance and incentivize participation

π‘ The following sections are the calculation Friddy would incentivize participation providing the understanding of how much profit can an LP minimally net, at what deposit price would that not make any money, and potentially how any transaction could they process with the same deposit

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