Proposal
These days many protocols are trending towards having protocol owned liquidity and I believe it would be a good move for DappRadar to acquire POL right from the beginning. There are many existing solutions to acquiring POL but many of them have a significant cost and can contribute to token sell pressure.
UMA has a solution to this that has little up front cost and will only payout investors if the desired protocol growth is achieved. Success Tokens mature at a designated point in the future and don’t require a protocol to sell tokens at a discount in the present. Instead, each Success Token an investor receives would also include an embedded call option. The investor would only receive their bonus if the protocol is successful in achieving growth. There are several ways Success tokens can be used and in the case of DappRadar I believe acquiring ETH to provide our own POL would likely be the best route.
I do believe this can be done while still rewarding community members to provide liquidity in the early stages but having this POL can lessen our dependence on user provided liquidity. Giving users a place to earn on their RADAR tokens is also important to attract users in.Eventually I would like to see those LP rewards reduced to zero and RADAR tokens can be focussed on other needed areas.
I’ve created a table as an example on how we can use Success Tokens. This example would require 50,000,000 RADAR as collateral and assumes a sale price of $0.04 as we don’t know what the price will be at the time of the sale. This example would raise enough ETH($1MM worth) so that when paired with RADAR from the treasury we would have $2MM in POL. This guideline demonstrates both the value to the protocol and the value to the investor. These tokens are fully customizable and the following parameters can be decided by the community:
Radar USD Price on Redemption date | Payout Per Success Token | Investor Value at Expiration in USD on $1MM Investment | RADAR paid out at expiry on $1MM Investment | |
---|---|---|---|---|
0.02 | 1 RADAR | $500,000 | 25,000,000 | |
0.03 | 1 RADAR | $750,000 | 25,000,000 | |
Sale Price | 0.04 | 1 RADAR | $1,000,000 | 25,000,000 |
0.05 | 1 RADAR | $1,250,000 | 25,000,000 | |
0.06 | 1 RADAR | $1,500,000 | 25,000,000 | |
0.07 | 1 RADAR | $1,750,000 | 25,000,000 | |
Strike Price | 0.08 | 1 RADAR | $2,000,000 | 25,000,000 |
0.09 | 1.1 RADAR | $2,475,000 | 27,500,000 | |
0.10 | 1.2 RADAR | $3,000,000 | 30,000,000 | |
0.11 | 1.3 RADAR | $3,575,000 | 32,500,000 | |
0.12 | 1.4 RADAR | $4,200,000 | 35,000,000 | |
0.13 | 1.5 RADAR | $4,875,000 | 37,500,000 | |
0.14 | 1.6 RADAR | $5,600,000 | 40,000,000 | |
Max Payout | 0.18 | 2 RADAR | $9,000,000 | 50,000,000 |
0.20 | 2 RADAR | $10,000,000 | 50,000,000 |
Summary
UMA has other treasury management solutions to offer including KPI Options and Range Tokens but I have chosen Success Tokens as the best way to acquire POL while aligning investor incentives with the community.
Want to get community feedback before turning this into an official DCP.
- Yes
- No
- Undecided
0 voters