Saga Economic Model

Audience: business

Revenue Model

Primary Revenue Stream: Management Fee Spread

Механика:

Earned Yield (from DeFi vaults) - Declared APY (to users) = Management Fee

MVP: Единственная стратегия (Integration-Only):

Strategy	Declared APY	Target Earned Yield	Management Fee	Margin
Fixed Yield (10%)	10%	12-15%	2-5%	20-50% markup

Note: Множественные стратегии удалены из MVP scope согласно Integration-Only архитектуре.

Revenue Calculation (MVP Simplified):

Annual Revenue = TVL × Fixed Management Fee (2%)

Example with $10M TVL:
- 100% in Fixed Yield (10% APY): $10M × 2% fee = $200K

Total Annual Revenue: $200K (2% fixed management fee)

MVP Advantage: Predictable revenue model, no complex blending calculations

Revenue Drivers:

• ✅ TVL Growth: Primary driver — каждый $1M TVL добавляет ~$60-80K annual revenue
• ✅ Yield Optimization: Better vault strategies увеличивают spread
• ✅ User Mix: Больше aggressive strategy users = higher revenue per dollar
• ⚠️ Market Conditions: Bear markets снижают DeFi yields, сжимая margins

Secondary Revenue Stream: Performance Fees

Применимость: Только для flexible/custom strategies (Phase 3+), НЕ для fixed APY strategies (Phase 1-2)

Механика:

If Earned Yield > Declared APY × 1.5:
  Performance Fee = 50% × (Earned Yield - Declared APY × 1.5)

Пример:

User в 10% APY strategy, vault earned 25%:
- Declared: 10%
- Threshold: 15% (10% × 1.5)
- Excess: 10% (25% - 15%)
- Performance Fee: 5% (50% × 10%)
- User receives: 20% (10% declared + 50% of excess)

Revenue Projection:

• Phase 1-2: $0 (fixed APY only)
• Phase 3: $50-100K (10% of users в flexible strategies)
• Phase 4+: $500K-1M (30% of users, larger TVL)

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Cost Structure

Fixed Costs (Monthly)

Infrastructure:

• VPS servers (production + staging): $500
• Database (PostgreSQL managed): $300
• Monitoring & logging (Datadog, Sentry): $200
• CDN & storage (Cloudflare, S3): $150
• Total Infrastructure: $1,150/month ($13.8K/year)

Team Salaries (MVP Ultra-Simplified):

• 1x CEO/Product: $120K/year
• 1x Full-Stack Engineer: $100K/year
• 1x Designer/Community: $60K/year
• Total Salaries: $280K/year ($23.3K/month)

Eliminated roles for MVP: - ❌ CTO (CEO handles strategy) - ❌ Smart Contract Engineer (no contracts in Integration-Only) - ❌ Multiple engineers (one full-stack suffices) - ❌ Separate Marketing role (Designer handles community)

Professional Services:

• Legal & compliance: $100K/year ($8.3K/month)
• Accounting & tax: $24K/year ($2K/month)
• Insurance (E&O, cyber): $36K/year ($3K/month)
• Total Services: $160K/year ($13.3K/month)

Security & Audits (MVP Simplified):

• Basic security monitoring: $5K/year ($0.4K/month)
• Code review tools: $2K/year ($0.2K/month)
• Total Security: $7K/year ($0.6K/month)

Eliminated for MVP: - ❌ Smart contract audits: $0 (no contracts in Integration-Only) - ❌ Bug bounty programs: $0 (too early/complex) - ❌ Penetration testing: $0 (simple architecture)

Custody & DeFi Infrastructure:

• Fordefi platform fee: $36-60K/year ($3-5K/month flat fee)
• Note: Не зависит от TVL, в отличие от Fireblocks/Copper (0.15-0.5% AUM)
• Cost Advantage: At $10M TVL saves $24-44K/year vs traditional custody

Total Fixed Costs (MVP): $497-521K/year ($41.4-43.4K/month)

Savings vs Original Scope: $523-523K/year (50% reduction through Integration-Only approach)**

Variable Costs

Gas Costs (Integration-Only MVP):

• MVP Gas Costs: $0 (no smart contracts = no gas fees)
• All transactions handled by Crypto2B (included in their fees)
• Fordefi handles DeFi operations (included in platform fee)

Eliminated Costs: - ❌ Contract operations: $0 (no smart contracts) - ❌ User transaction gas: $0 (handled by integrations) - ❌ L2 deployment: $0 (not needed for MVP)

Customer Support (scaling):

• Phase 1 (50-100 users): $0 (founders handle)
• Phase 2 (500-1,000 users): $3K/month (part-time support)
• Phase 3+ (5,000+ users): $15K/month (2 full-time agents)

Marketing & User Acquisition:

• Phase 1: $10K/month (content, community, early adopters)
• Phase 2: $50K/month (paid ads, partnerships, influencers)
• Phase 3: $150K/month (brand campaigns, events, affiliates)

Total Variable Costs (MVP Simplified):

• Phase 1: ~$12K/month (marketing only, no gas fees!) - Integration-Only advantage!
• Phase 2: ~$35K/month (increased marketing, support)
• Phase 3: ~$80K/month (scaled operations)

Cost Reduction: 30-50% lower vs smart contract approach due to zero gas costs**

Cost Savings vs Traditional Custody:

• Phase 1 ($2M TVL): Save $6K/year (0.3% × $2M)
• Phase 2 ($10M TVL): Save $30K/year (0.3% × $10M)
• Phase 3 ($100M TVL): Save $300K/year (0.3% × $100M) - огромная экономия!

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Unit Economics

Customer Acquisition Cost (CAC)

Target CAC by Phase:

• Phase 1: $500 (early adopters, word-of-mouth, high touch onboarding)
• Phase 2: $200 (content marketing, referrals, optimized funnel)
• Phase 3: $100 (scalable channels, brand recognition, affiliate network)

CAC Breakdown (Phase 2 example, $200 total):

• Content marketing: $80 (blog posts, YouTube videos, Twitter threads)
• Paid ads (Google, Twitter, DeFi aggregators): $60
• Affiliate commissions: $40
• Onboarding support & tools: $20

Payback Period Calculation:

Average User Balance: $50K
Annual Management Fee (7.5% blended): $3,750
Monthly Revenue per User: $312.50

Payback Period = CAC / Monthly Revenue per User
Phase 1: $500 / $312.50 = 1.6 months
Phase 2: $200 / $312.50 = 0.6 months (highly efficient!)
Phase 3: $100 / $312.50 = 0.3 months (exceptional)

Customer Lifetime Value (LTV)

Assumptions:

• Average user balance: $50,000
• Blended management fee: 7.5%
• Annual revenue per user: $3,750
• Average customer lifespan: 3-5 years (conservative estimate)
• Churn rate: 10-15% annually (retention: 85-90%)

LTV Calculation:

LTV = Annual Revenue per User × Average Lifespan
Conservative (3 years): $3,750 × 3 = $11,250
Optimistic (5 years): $3,750 × 5 = $18,750

LTV/CAC Ratio

Phase	CAC	LTV (3-year)	LTV/CAC Ratio	Assessment
Phase 1	$500	$11,250	22.5x	Excellent
Phase 2	$200	$11,250	56x	Exceptional
Phase 3	$100	$11,250	112.5x	World-class

Industry Benchmarks:

• SaaS companies: 3-5x LTV/CAC considered healthy
• FinTech: 5-10x excellent
• Saga target: >10x (achieved across all phases)

Key Insight: Высокий LTV/CAC ratio обусловлен: - Sticky product (users не переключаются между DeFi platforms часто) - Low churn (passive income seekers long-term oriented) - High revenue per user (percentage of AUM model scales with user wealth)

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Financial Projections

Revenue Projections (3-Year Model)

Year 1 (2025-2026):

Quarter	TVL	Active Users	Avg Balance	Revenue
Q4 2025	$2M	80	$25K	$40K
Q1 2026	$5M	200	$25K	$100K
Q2 2026	$10M	400	$25K	$200K
Q3 2026	$20M	600	$33K	$400K
Q4 2026	$30M	800	$37.5K	$600K

Year 1 Total Revenue: $1.34M

Year 2 (2027):

Quarter	TVL	Active Users	Avg Balance	Revenue
Q1 2027	$50M	1,250	$40K	$1M
Q2 2027	$75M	1,875	$40K	$1.5M
Q3 2027	$100M	2,500	$40K	$2M
Q4 2027	$150M	3,000	$50K	$3M

Year 2 Total Revenue: $7.5M

Year 3 (2028):

• TVL: $200M → $500M (institutional adoption)
• Revenue: $15M → $40M
• Blended management fee: 8% (improved yield optimization)

Cost Projections

Year 1:

• Fixed costs: $1,020-1,044K (includes Fordefi $3-5K/month)
• Variable costs: $204K (average $17K/month - no custody fees!)
• Total Costs: $1.22-1.25M
• Net Profit: $90-120K (break-even Q3 2026)

Year 2:

• Fixed costs: $1.24M (team expansion: +2 engineers, Fordefi included)
• Variable costs: $756K (average $63K/month)
• Total Costs: $2.00M
• Net Profit: $5.50M (profitable, scaling rapidly)
• Custody savings: $75-150K/year (avoided Fireblocks fees at $50-75M TVL)

Year 3:

• Fixed costs: $1.86M (full team: 12-15 people, Fordefi $5K/month)
• Variable costs: $2.04M (average $170K/month)
• Total Costs: $3.90M
• Net Profit: $11.1-36.1M (highly profitable at scale)
• Custody savings: $600K-1.5M/year (avoided Fireblocks fees at $200-500M TVL)

Break-Even Analysis

Break-Even Point Calculation (MVP Integration-Only):

Monthly Fixed Costs: $41-43K (average $42K, includes Fordefi $3-5K/month)
Variable Cost Ratio: ~20% of revenue (marketing only - NO gas or custody fees!)

Break-Even Revenue = Fixed Costs / (1 - Variable Cost Ratio)
Break-Even Revenue = $42K / 0.80 = $52.5K/month

TVL Required = $52.5K / 0.167% monthly fee = $3.15M

Expected Timeline: Q1 2026 (3-4 months from launch) - MUCH FASTER!

💡 Key Improvement: Fordefi's flat-fee model снижает break-even TVL на $300K vs traditional custody (0.3% variable fees).

Key Milestones (MVP Integration-Only):

• $1M TVL (Q4 2025): $20K revenue, -$34K monthly burn (much improved!)
• $3.2M TVL (Q1 2026): $53K revenue, +$0.5K monthly profit ✅ (break-even!)
• $10M TVL (Q2 2026): $167K revenue, +$125K monthly profit (strong profitability)

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Capital Requirements & Funding

Funding Rounds Strategy

Seed Round (MVP Integration-Only): $200K - Use of funds: - Product development & launch: $80K - Marketing & user acquisition: $60K - Legal & compliance: $20K - Operating runway (4 months): $40K - Valuation: $1-2M pre-money - Dilution: 10-15%

Eliminated Costs: - ❌ Smart contract audits: $0 (no contracts) - ❌ Complex infrastructure: $0 (simple VPS) - ❌ Multiple integrations: $0 (Crypto2B + Fordefi only)

Series A (Q2 2026): $3M - Trigger: $10M TVL achieved, product-market fit validated - Use of funds: - Team expansion (8 → 15 people): $1.5M - Marketing scale-up: $800K - Infrastructure & integrations: $400K - Operating runway (12 months): $300K - Valuation: $25-30M pre-money - Dilution: 10-12%

Series B (Q2 2027): $10-15M - Trigger: $100M TVL, institutional traction - Use of funds: - International expansion: $5M - Regulatory & compliance: $2M - Product diversification: $3M - Team & operations: $5M - Valuation: $100-150M pre-money - Dilution: 8-10%

Runway Analysis

Current Situation (MVP $200K seed closed):

• Monthly burn: $54K (Phase 1 - Integration-Only ultra-low cost!)
• Runway: 3.7 months until cash depletion (tight but achievable to break-even)
• Ultra-Fast Path: Break-even at $3.2M TVL in Q1 2026 = No Series A needed!

Alternative with $100K bootstrapping: - Monthly burn: $42K (fixed) + $12K (variable) = $54K - Runway: 1.85 months - requires immediate traction or bridge funding

Mitigation Strategies:

• Deferred compensation (founder salaries 50% of market rate initially)
• SAFE notes с revenue-based triggers вместо pure time-based equity
• Fordefi flat-fee model (already implemented - major cost advantage vs variable custody fees)
• Gradual team hiring (contractors → full-time as revenue grows)

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🪙 Tokenomics (Future Consideration)

Potential Token Utility

Note: Token launch НЕ планируется в Phase 1-2. Рассматривается для Phase 3+ если: - Platform достигла product-market fit ($50M+ TVL) - Regulatory clarity для utility tokens established - Strong community и ecosystem demand

Possible Use Cases:

• Governance: Protocol parameter voting (APY adjustments, new strategies, fee changes)
• Fee Discounts: Token holders получают reduced management fees (e.g., 25% discount)
• Staking Rewards: Additional yield для token stakers (funded by protocol revenue)
• Revenue Share: Portion of platform profits distributed к token holders

Token Distribution (Hypothetical):

• Team & Advisors: 20% (4-year vesting)
• Investors: 15% (Series A/B participants)
• Community & Ecosystem: 40% (liquidity mining, grants, airdrops)
• Treasury & Reserves: 15%
• Public Sale: 10%

Governance Model:

• Time-locked voting (longer lock = higher voting power)
• Delegation support (users can delegate votes)
• Quadratic voting для fair distribution
• Minimum quorum requirements (20% participation)

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Sensitivity Analysis

Key Variables Impact on Revenue

TVL Sensitivity:

If TVL -20% ($8M instead of $10M target Q2 2026):
  Revenue impact: -20% ($160K vs $200K) → still runway positive

If TVL +50% ($15M instead of $10M):
  Revenue impact: +50% ($300K vs $200K) → accelerated profitability

Management Fee Sensitivity:

If yields compress 2% across strategies (bear market scenario):
  Blended fee: 5.5% instead of 7.5%
  Revenue impact: -27% at same TVL → requires 37% higher TVL to compensate

If yields expand 3% (bull market scenario):
  Blended fee: 10.5% instead of 7.5%
  Revenue impact: +40% at same TVL → profitability 3 months earlier

User Acquisition Cost Sensitivity:

If CAC doubles to $400 (competitive market):
  Payback period: 1.3 months (still excellent)
  Break-even TVL: ~$21M (slight delay, improved vs custody model)

If CAC halves to $100 (viral growth):
  Payback period: 0.3 months (exceptional)
  Break-even TVL: ~$14M (faster break-even with Fordefi flat-fee advantage)

Scenario Planning

Base Case (50% probability):

• TVL growth: $2M → $10M → $30M (Year 1)
• Break-even: Q3 2026
• Year 1 profit: $120K
• Series A valuation: $25M

Bull Case (20% probability):

• TVL growth: $3M → $20M → $75M (rapid adoption)
• Break-even: Q2 2026 (earlier)
• Year 1 profit: $800K
• Series A valuation: $50M

Bear Case (30% probability):

• TVL growth: $1M → $5M → $15M (slow adoption)
• Break-even: Q4 2026 (delayed)
• Year 1 profit: -$300K (need bridge funding)
• Series A valuation: $15M

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Related Documents

Business Strategy:

• Whitepaper - Banking window concept и market opportunity
• External Integrations - Custody и vault partnership strategy
• Roadmap - Quarterly milestones и deliverables

Financial Analysis:

• Financial model spreadsheet (Google Sheets) - Детальные 5-year projections
• Cap table management (Carta) - Equity distribution и dilution modeling

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✍️ Document Information

Author: Saga Finance Team Contributors: CEO, CFO, Product, DeFi Specialist Reviewed By: Board of Directors

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Questions or Feedback? Contact: finance@saga.surf или create issue с тегом business-documentation

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📋 Метаданные

Версия: 2.4.82

Обновлено: 2025-10-21

Статус: Published

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