The Picasso treasury functions as a broad representative of the Picasso ecosystem. This is because the projects incubated by Composable Labs, such as Angular Finance, allocate a portion of their token supply to the Picasso treasury. In addition, the treasury actively generates revenue through network fees, staking, and liquidity provision. The CHAOS fNFT therefore gives holders incentives to be held long term, and also provides them a means to earn revenue through the active yield the CHAOS fNFT returns.
The Picasso protocol earns yield on its own protocol owned assets, network fees and revenue from its incubated protocols. This model ensures that Picasso retains, manages, and distributes back to token holders through CHAOS fNFTs. Whilst Picasso generates revenue from the onset of its launch, bonds will be used to grow the treasury, specifically focusing on KSM liquidity, while focusing on creating a sustainable CHAOS inflation schedule from launch. Users will be able to stake CHAOS for significant yield opportunities that are currently not available in Kusama.
The impact of CHAOS on the Picasso treasury will have multiple second and third order effects which will filter back into improved returns for CHAOS holders. Trading fees that the Picasso treasury earns will be provided as an additional stream of yield returns to CHAOS holders. The deepened liquidity in the ecosystem will mean higher network activity, which will further increase return on network fees.