Treasury#
The treasury is the foundation of the SLOHM protocol. It holds all reserve assets, generates yield through active deployment, and establishes the reserve floor that backs every SLOHM token in circulation. Every operation in the protocol ultimately flows through the treasury.
Role of the Treasury#
The treasury serves three core functions:
- Asset custody. All bonded assets (BTC, Moto, Pill) are held in the treasury smart contract on Bitcoin L1. These assets are fully on-chain and verifiable at any time.
- Yield generation. Treasury assets are deployed across reserve strategies to generate returns. This yield funds staking rewards and compounds into the reserve.
- Supply backing. The treasury's total value divided by the total SLOHM supply establishes the reserve floor, the minimum intrinsic value per token.
What the Treasury Holds#
Assets enter the treasury through two primary channels:
- Bonding deposits. When users bond BTC, Moto, or Pill tokens, those assets transfer directly into the treasury. Every bond increases the reserve.
- Yield returns. Revenue generated from deployed strategies flows back into the treasury, compounding the reserve over time.
The treasury does not hold speculative positions. Every asset is either a bonded reserve asset or yield generated from productive deployment.
The Reserve Floor#
The reserve floor is the minimum backing per SLOHM token:
Reserve Floor = Total Treasury Value / Total SLOHM Supply
This floor strengthens over time through two mechanisms:
- Bonding. The treasury receives the full market value of bonded assets while minting fewer SLOHM tokens than that value (due to the bond premium). Each bond improves backing per token.
- Yield. Treasury-deployed assets generate returns that compound into the reserve without any corresponding increase in token supply.
The reserve floor can only go up. It never decreases because the protocol only mints new tokens when backed by real value.
Treasury Transparency#
All treasury operations execute through smart contracts on Bitcoin L1:
- Fully on-chain. Every bond deposit, yield distribution, and strategy deployment is recorded as a Bitcoin transaction.
- Verifiable. Anyone can audit the treasury's holdings and operations at any time by reading the on-chain state.
- Contract-governed. Treasury management follows programmed logic. There are no discretionary withdrawals or off-chain decisions.
The treasury contract enforces that new SLOHM can only be minted when sufficient backing exists. This check includes all pending bond payouts, ensuring the reserve floor accounts for all outstanding obligations.
Treasury Parameters#
| Parameter | Value |
|---|---|
| Reserve depositor | BondDepository contract |
| Reward manager | Distributor contract |
| Accepted reserve tokens | BTC, Moto, Pill |
| Backing check | Includes pending bond payouts |
| Minting constraint | Only when treasury value exceeds total supply backing |
What's Next?#
Learn how protocol parameters are managed in Policy, or see how the treasury generates yield through Reserve Strategies.