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Bull Pool Capital Sufficiency

Status: Not Started
Priority: Critical
Last Updated: 2026-06-18
Contributors Welcome: Yes

What We Don’t Know

Is €3,000 founder capital sufficient to bootstrap H€/HAu tokens for Phase 0?

Specifically:

Why It Matters

Capital determines system capacity.

If Pool Too Small (€3K Insufficient):

If Pool Too Large (€3K Overkill):

Sweet Spot:

Wrong estimate = Either wasted capital OR system can’t function.

Current Hypothesis

€3K is sufficient for Phase 0 if merchant velocity is high (weekly cash-out).

Reasoning from existing documentation:

“Scenario: 10 merchants, €100/month each, weekly VES conversion
Volume: €1000/month
Lock: €250 avg (weekly turnover)
Pool needed: €3000 supports 120 merchants at this velocity”

Assumptions baked in:

  1. High velocity: Merchants convert H€ → VES weekly (money tight)
  2. Small amounts: €100/month average per merchant
  3. Short contracts: 1 week (capital freed weekly)
  4. No hoarding: Merchants don’t accumulate long-term

Venezuelan intel supports this:

“If money is tight (and for most it is) they aren’t in a position to have savings. Initially they will dump it straight away.”

But what if assumptions are wrong?

Investigation Method

Step 1: Model Capital Utilization Scenarios

Scenario A: High Velocity (Best Case)

Merchants: 10
Monthly volume per merchant: €100
Cash-out frequency: Weekly
Contract period: 7 days
Average capital locked: €250 (25% utilization)

€3K pool supports: ~120 merchants

Scenario B: Medium Velocity (Realistic Case)

Merchants: 10
Monthly volume per merchant: €100
Cash-out frequency: Bi-weekly
Contract period: 7 days
Average capital locked: €500 (50% utilization)

€3K pool supports: ~60 merchants

Scenario C: Low Velocity (Worst Case)

Merchants: 10
Monthly volume per merchant: €100
Cash-out frequency: Monthly
Contract period: 7 days
Average capital locked: €1000 (100% utilization)

€3K pool supports: ~30 merchants

Deliverable: Table comparing pool capacity across velocity scenarios

Step 2: Analyze Sender Covenant Abort Demand

Additional H€ demand: When covenant aborts (BCH drops >7%), María gets H€.

Questions:

Example:

If 5% of covenants abort per week
And average remittance is €100
And 100 total remittances/week

Abort demand: 5 × €100 = €500 H€ needed for aborts
Merchant demand: €1500 H€ for cash-outs
Total: €2000 pool utilization

Deliverable: Estimated pool allocation (merchant vs sender demand)

Step 3: Stress Test Capital Requirements

Black swan scenario: BCH crashes 20% overnight

All active covenants abort (>7% drop)
All merchants want to stabilize immediately
Simultaneous demand spike

How much capital needed to handle this?

Example:

10 active covenants × €100 = €1000 (sender aborts)
10 merchants × €200 avg holdings = €2000 (merchant stabilization)
Total spike: €3000

If pool = €3K: Barely handles crisis
If pool < €3K: System breaks at worst time

Deliverable: Stress test scenarios and pool resilience

Step 4: Benchmark Against Similar Projects

Research other BCH/crypto stability mechanisms:

Examples to research:

Deliverable: Comparative analysis of bootstrap capital

Step 5: Survey Potential Phase 0 Participants

Ask Spanish sender groups:

Ask Venezuelan merchants:

Deliverable: Demand estimates from actual users

Success Criterion

This unknown is answered when:

  1. ✅ We have modeled:
    • Capital utilization across velocity scenarios
    • Merchant vs sender demand split
    • Stress test requirements
    • Comparable projects’ bootstrap capital
  2. ✅ We can estimate:
    • “€3K supports X merchants with Y% confidence”
    • “Pool will exhaust when Z condition occurs”
    • “We need €N for comfortable Phase 0”
  3. ✅ We make go/no-go decision:
    • If €3K sufficient: Proceed with founder capital
    • If €3K insufficient: Either reduce scope OR seek additional capital before launch
    • If close: Launch with €3K + monitor + add capital when needed

Answered = “€3K supports [specific capacity], here’s the math, here’s the risk, here’s the plan.”

Contributor Guidance

Skills needed:

Estimated effort: 4-6 hours

How to start:

  1. Get BCH/EUR price data (last 12 months)
  2. Calculate: How often does BCH drop >7% in 24 hours, 7 days, 30 days?
  3. Model capital lock = (monthly volume) × (holding period in days) / 30
  4. Create spreadsheet with scenarios (vary velocity, contract period, # merchants)
  5. Document findings in GitHub issue or email rufitnes@proton.me

Quick contribution: Even partial modeling helps! If you can only estimate one scenario, that’s valuable data.

Current Data Points

From existing documentation:

Open questions:

Design trade-off note:

These unknowns compound - answering this requires answering related unknowns first.

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