Carson Cook (Liquidity Wizard) jams with the team at Rari Capital to discuss how the two projects can work together.
Notes from the call:
Reactors
- token level
- e.g. not specific pairs
- users deposit ASSET
- earn TOKE
- single-sided
- liquidity power based on number of TOKE you control
- shrimps and whales have same power-per-TOKE
- reactor pulls equal USD value from ETH/OTHERSIDE pool
IL Protection
- IL protection is paid via underlying
- system never triggers market selling or buying
- sidelined reserve (not deployed as liquidity) just for the purpose of IL
- TOKE ‘slashing’ local to specific reactor
- never sold
- TOKE paid back to reserve
- e.g. if ASSET is underwater, pull from reserve
- multiple levels of backstop
- LPs always get back 1:1 single-sided asset
Uniswap
- Tokemak deployed to v2
- chatted with Visor
- good lego
- add Uni v3 support via Visor
Launch Integrations
- Uni v2, Sushi, Balancer, 0x, later add Uni v3 via Visor
Could TOKE Wars pump bags?
- free market will decide
- “probably not”
- the more TOKE a DAO has, the more power they have to direct their liquidity
- likely DAOs will have a dedicated LD
- 20 DAOs in contact
CORE
- who decides which reactor to launch?
- proxy-to-community control
- long term, anyone can request reactor, e.g. creating pools on sushi
- 30-35 projects as candidates
- TOKE holders will vote for reactor
- week long game to vote-in first reactors
- top 5 will launch
- within a month, launch more
- establish reserve to turn on reactor
- needs gov votes
- if a winning reactor backs out, go to no. 6
NFT Tokens
- tNFT tokens?
- mid-term goals yes
- any-to-any protocol
- could have single NFT pools
DAOs
- direct swaps OTC TOKE->ASSET
- another model: if neither party wants to diversify
- 2-way lending agreement
- lend TOKE, lend ASSET
- put Fuse pools between DAO and Tokemak
- both can borrow corresponding assets
- doesn’t need partnerships/agreements
- permission-less, offline (no comms between parties)
Earnings
- PCA
- rewards pay out in TOKE
- internalizing revenue
- at first, inflationary; quickly stop being inflationary
- SINGLULARITY
- have a large enough reserve that the protocol itself is the liquidity
- replace TOKE emissions with PCA-generated revenue/fees
- no longer need 3rd party LPs
- PCA is large enough that Tokemak has enough liquidity to handle any needs within DeFi
- at the beginning, TOKE value is derived from ability to direct liquidity
- post singularity, TOKE value is also backed by PCA, DeFi-weighted index
- evolve from TOKE emissions to siphon from PCA revenue
- LPs are lenders
- get to the point where you don’t rely on 3rd party lenders (LPs)
- link in other protocols, DAOs, with reserves
- achieve singularity faster than expected
Market
- addressable market: Every token, all of DeFi
- move upstream, market is even bigger
- e.g. Fuse -> Tokemak integration allows mint tokens earlier than usual
RGT
- one of first reactors
- if voted in, Rari community will vote to move liquidity to from Sushi distributor to Tokemak
Will LDs who find better rewards be rewarded more?
- each reactor will have its own APR based on supply/demand
- LDs don’t get rewarded extra, everyone in reactor is even
- profit is a side effect
Three Stages of Singularity
- at beginning, you incentivize LPs by paying in TOKE
- lower emissions as bootstraps
- (APR will be attractive for a while)
- after singularity, the rewards are lowered to LPs
- (vote?) to decide to payout fee revenue vs. adding to PCA
- eventually you don't need external LPs
- spreads turn to 0 once you don't need LPs
- liquidity turns into bandwidth
- “broadband moment”
- move liquidity around at “speed of light”