Financial Model
The financial model projects three scenarios across the Phase 1 (FF vault) and Phase 2 (Rewind insurance) buildout. Current model: v26.
Key Assumptions
Section titled “Key Assumptions”| Assumption | Bear | Base | Bull |
|---|---|---|---|
| CS alpha (vault edge per exit) | 3–4% | 7–8% | 12–15% |
| Monthly active users (M12) | 200 | 800 | 2,500 |
| Avg position size (FF exit) | $300 | $600 | $1,200 |
| Monthly FF volume | $60K | $480K | $3M |
| Rewind premium rate | 8% avg | 11% avg | 14% avg |
| Monthly Rewind insured volume | $200K | $1M | $5M |
| Junior tranche % (staker capital) | 20% | 35% | 50% |
| Vault seed capital | $50K | $250K | $500K |
Revenue Projections
Section titled “Revenue Projections”Fast-Forward (Phase 1)
Section titled “Fast-Forward (Phase 1)”Monthly vault revenue = Monthly FF volume × net spread
| Scenario | Monthly FF Volume | Net Spread | Monthly Revenue |
|---|---|---|---|
| Bear | $60K | 1% | $600 |
| Base | $480K | 4% | $19,200 |
| Bull | $3M | 8% | $240,000 |
Rewind Insurance (Phase 2, additive)
Section titled “Rewind Insurance (Phase 2, additive)”Monthly premium revenue = Monthly insured volume × premium rate × (1 − claims ratio)
| Scenario | Insured Volume | Premium Rate | Claims Ratio | Monthly Net |
|---|---|---|---|---|
| Bear | $200K | 8% | 38% | $9,920 |
| Base | $1M | 11% | 32% | $74,800 |
| Bull | $5M | 14% | 27% | $511,000 |
Breakeven Timeline
Section titled “Breakeven Timeline”| Scenario | Breakeven Month | Notes |
|---|---|---|
| Bear | M18–24 | Tight — requires lean team, minimal overhead |
| Base | M6–9 | Primary projection |
| Bull | M3–4 | Driven by rapid CS alpha validation |
Breakeven is defined as: monthly protocol revenue ≥ monthly operating costs (team + infrastructure + audit amortization).
Raise Sizing
Section titled “Raise Sizing”The $420K–985K range covers all costs through Phase 2, not just capital deployment:
| Scenario | Total Raise | Capital (pools) | Ops + Engineering |
|---|---|---|---|
| Bear (minimum viable) | $420K | $175K | $245K |
| Base (comfortable) | $700K | $350K | $350K |
| Bull (full-scale) | $985K | $550K | $435K |
With community junior tranche funding (30–50% of pool capital from $CHRONO stakers), net external raise requirement drops:
| Scenario | Gross Raise | Junior from Community | Net External Raise |
|---|---|---|---|
| Bear | $420K | $35K | $385K |
| Base | $700K | $123K | $577K |
| Bull | $985K | $275K | $710K |
Sensitivity Analysis: CS Alpha
Section titled “Sensitivity Analysis: CS Alpha”The model’s most sensitive variable is CS alpha — the edge the vault earns from buying high-CS positions above market price.
| Alpha | Net Spread | M12 Vault Revenue | Vault Survival at $250K Seed |
|---|---|---|---|
| 0% | ~0% | ~$0 | Yes (degrades to market-maker) |
| 3% | ~1% | ~$7K | Yes |
| 7% | ~4% | ~$230K | Yes |
| 12% | ~8% | ~$960K | Yes |
| 15% | ~10% | ~$1.4M | Yes |
Key finding: Even at alpha=0, the vault does not fail — it simply earns no spread. The principal is safe. This means the $250K seed capital is not “at risk” in the traditional sense — it can only be eroded if the vault systematically overpays for positions (buys at higher probability than they resolve at).
Token Economy Interaction
Section titled “Token Economy Interaction”The model has a “flywheel ON/OFF” toggle that adds the $CHRONO buyback volume to price appreciation assumptions. With flywheel ON (base case):
- 20% of FF spread → buyback + burn
- 10% of Rewind premiums → buyback + burn
- At base scenario M12: ~$58K/yr in buyback pressure on $CHRONO supply
This is modest at base scale but compounds with protocol growth — and represents real, revenue-backed token demand rather than emissions-based price support.
Related:
- Capital Structure — how the raise is structured
- Revenue & Flywheel — where the revenue goes
- Build Roadmap — the phase timeline this model covers
- Investment Thesis — investor-facing synthesis