- The New Protocol & DAO- Cashio’s new protocol is yet to be named (potentially called Ouroboros), but it will be operated in the form of a DAO.
- Governance Token- The new DAO will be operated and owned by members of this token, it is used to vote on Proxy Gauges.
- LP Collateral- When a user mints Stablecoin X (OURO) they must provide LP tokens as collateral. These LP tokens are stable-pair tokens from Saber & are exchanged 1:1 with Stablecoin X. LP tokens generate two forms of yield for the protocol: fee yield & governance token yield. Fee yield is paid out in 2SBR (USDT-USDC LP) and governance yield is in the form of SBR/SUNNY.
- Stablecoin X- The temporary internal name of the new stablecoin minted by the protocol. Potentially called OURO.
- Proxy Gauges- The protocol will allow users to Voter Escrow Lock their Treasury Token in order to vote on Proxy Gauges: which represent pools that may receive rewards in the form of the SBR/SUNNY controlled by the protocol (from Saber’s grant & the rewards earned from LP Collateral). They are built on top of Tribeca’s Gauges - which allow voting escrows to allocate the rewards of a set of liquidity mining pools via Quarry.
- Treasury Token- The Treasury Token is the governance token for the protocol’s DAO. It is priced according to a Protocol Owned Market which receives constant liquidity from the LP Collateral’s fee yield as well as from users who purchase the Treasury Token using Stablecoin X. It would be called BOROS in the Ouro/Boros model.
- Protocol Owned Market- A market which is fully operated by a vAMM run by the protocol. Our Protocol Owned Market sells the Treasury Token BOROS in exchange for OURO. The concept of a Protocol Owned Market was started by the Nirvana Finance team.
- Call Option Reward Token- The rewards from our system will primarily go to victims until they have been made whole. Every reward token has value equal to (Spot Price - Floor Price).
- Spot Price- The Protocol Owned Market program sets the price of the Treasury Token, and quotes it in Stablecoin X only. The price curve limits price impact and redirects liquidity to the Floor Price.
- Floor Price- The Floor Price is redirected liquidity that guarantees the protocol’s ability to purchase all the Treasury Tokens in circulation at the Floor Price.
- Protocol Owned Liquidity- Protocol Owned Liquidity occurs when a protocol accrues LPs from participants. In our case, we are going to have POL for Saber Stablecoin pairs. Some protocols have Protocol Owned Liquidity over their own token - and we have this in the case of the Treasury Token, but not for Stablecoin X.
- Protocol Owned Governance- Instead of owning liquidity for a token, a protocol can also own governance power over other DAOs. This is something that creates inherent value for the protocol owning the governance since it can decide what to do with the governance power & its inherent value over the assets it controls. Our protocol has POG for SBR/SUNNY which it delegates to its Proxy Gauge voters- which vote using the Treasury Token.
- Voter Escrow Locking- Voter Escrow Locking is a Tribeca Protocol primitive that allows governance token holders to lock up their token for longer in exchange for more governance weight. The time lock mechanism allows us to attract long lasting liquidity in a sustainable way.
- Mercenary Capital- This is when market participants rent liquidity to AMMs in order to chase the highest short term APY, but then dump the reward token and pull liquidity.
- DeFi 1.0- The first iteration of DeFi where AMMs rent liquidity from mercenary capital providers by issuing a non-backed governance/ reward token. E.g. Saber.
- DeFi 2.0- An attempted second iteration of DeFi where protocols like Olympus DAO introduced Protocol Owned Liquidity to their token, but their token ultimately was not intrinsically backed and the reward itself was inflationary. Limits mercenary capital but was shown not to be sustainable because bonding a token and backing it with non stable collateral in order to show an absurd APY eventually means the token price drops over time as demand stays constant. E.g. Invictus/Olympus DAO.
- DeFi 3.0- A third iteration of DeFi championed by Nirvana Finance where a Protocol Owned Market for your token allows you to own all of your liquidity and use a price curve that allocates liquidity to a guaranteed floor price for tokens which grow over time & create risk/reward balances with the market price. DeFi 3.0 is also trying to solve the problems with DeFi 1.0 where AMMs like Saber rent liquidity using inflation and people interact with the protocol in order to take value from the reward token without meaningfully adding to the value being distributed. Using DeFi 3.0 ideals we can create a protocol that owns liquidity in Saber on behalf of users, and distributes the value in a more sustainable manner. It would need to be operated as a DAO and be as decentralized as possible- given that it is centralizing power in Saber. This is why fair launch is valuable in the Nirvana model.