FIP-0007 Vote to End Rebasing

Executive Summary The purpose of this proposal is to end rebases for the FHM token.

The vote to end rebasing on the FHM token will remain open for a period of seven days. If the vote is passed successfully, rebasing will end 2 epochs from the closing block of the snapshot and FHM holders will then be able to unlock their wsFHM (with zero unlock fee), unwrap and unstake their tokens.

The transition to a new tokenomics model will be discussed in detail in a follow-up proposal and will be dependent on whether this proposal is passed.

Introduction 2022 is now firmly in the rear view mirror and crypto winter is finally showing some signs of abating. Balance has successfully weathered a storm that has humbled many once-thriving DeFi organizations. We are also a maturing organization, having completed our first anniversary this past October and wish to lay a foundation for the next phase of our journey.

A Year in Review Even a cursory glance by the most uninformed observer will note the challenges of 2022 to the global macro-economy as a whole. Steep and swift interest rate hikes by the Federal Reserve (and many other central banks around the world), the Russian/Ukraine war and trade-tensions between the US and China have certainly not made for a thriving business environment, especially one that has only just emerged from a global pandemic.

The ever volatile crypto environment was not spared with numerous high-profile organizations buckling in the turbulence and there is no doubt that their collapse wreaked havoc on our nascent industry, sending prices plummeting and liquidations soaring.

Balance was spared none of these hardships which led to many challenging discussions and decisions within the team. Ultimately, converting our investments into stables and careful treasury management has allowed us to continue to this day with enough runway to see us through to the release of a number of our products currently in development.

Forging a New Path There is no doubt that our origins as an Olympus fork have been good to us and that the bonding revenue we received has allowed us to endure a very challenging market. This notwithstanding, market movements and overall sentiment during the past year necessitated that we cease bonding activity and drastically reduce staking rewards. Amid these trying times, we were confronted with a question - “who do we want to be?” Our Olympus foundation allowed us to raise capital and looking at successful projects from the 2017 bull run that thriving projects were the ones that built products that contributed to the crypto ecosystem. This project structure also far better suits our core team members, as we are builders. We have put together a great team of developers, marketers and financial strategists who are committed to this journey and seeing it successfully come to fruition.

This new strategy and focus has been underway since the middle of 2022. Although some of the products have taken longer to develop than we initially wished, the number of hacked protocols and hasty tokenomics implementations have highlighted the importance of stringent security measures and careful financial planning/risk management when designing products. Ultimately, quality takes time to build and quality endures. This is who we want to be - builders of quality products and platforms.

Ending FHM Staking Rewards This current vote is to end token emissions through rebases, and forms part of this transition to the new Balance token. Almost 90% of circulating FHM is staked in one of our staking pools. Should this vote be passed successfully, users will be allowed to unstake and unwrap their FHM without incurring the currently imposed unstake penalty. As soon as the rebases have ceased, no FHM tokens will be emitted and the circulating supply will be locked in.

The Vote - Saying Goodbye to OHM Our rebranding from FantOHM to Balance was the start of this new strategy and the official ceasing of staking rewards is the next crucial step in closing the door on our Olympus fork origins. Because this is such a monumental milestone, we are calling on our token holders to vote on this decision.

This is a simple Yes or No vote. By voting Yes the token holder is voting that they wish for staking rewards to come to an end.