From PenPad to Pencils Protocol: A Magnificent Iteration into the Restaking Realm
Beyond a launchpad: Redefine industry with an all inclusive DeFi functionalities
As the Web 3.0 landscape evolves, so has our brand: PenPad is now rebranded as Pencils Protocol. This marks a significant enhancement of the platform, aligning more closely with our vision for a comprehensive decentralized finance (DeFi) ecosystem. Pencils Protocol isn’t just a new name — it’s a new era of innovation and integration.
We’re thrilled to introduce a full suite of new functions as part of this transformation. In addition to enhancing our launchpad functionalities, which have been pivotal in deploying new projects within the Scroll ecosystem, Pencils Protocol will be introducing two major functions in May:
- Staking and Liquid Staking
- Liquidity Vaults
These expanded features will further cement Pencils Protocol’s role as a pivotal component on the Scroll ecosystem. We will also introduce Pencils ✏️ , a reward system designed to acknowledge and reward our supporters and community members.
Let’s take a quick look at each of these new developments.
First, Some Quick Background
Through the support of our community and a lot of hard work, Pencils Protocol has enjoyed a hugely successful launch. Our project is one of the few in this market cycle to achieve a community round oversubscription rate of over 250%. Together, we’ve attracted a large number of high-quality investors, including Sandy Peng (co-founder of Scroll), Animoca brands, Presto Labs, and Gate.io’s venture. More investors will be announced soon.
Following this successful launch, our primary focus has shifted to harnessing the synergy between the launchpad and staking to fundamentally serve the Scroll ecosystem. By exploring how these elements naturally integrate within Pencils, we enable a dynamic interplay between different functions, which itself is an innovation. Our ambition is to become the primary gateway for bridging the total value locked (TVL) across the Scroll ecosystem. Pencils Protocol not only connects ideas and innovations but also channels and optimizes the flow of capital within the ecosystem, ensuring seamless integration and interaction between various funds and projects.
Pencils Protocol Staking and Liquid Staking
It’s no secret that liquid staking is still one of the hottest narratives in Web 3.0 industry. Total Value Locked (TVL) in liquid staking projects has shot up from $12.28 billion in March of 2023 to over $62 billion in March 2024.
Pencils Protocol’s staking product will roll out in two phases:
- Phase 1: Introduces traditional staking to the platform
- Phase 2: Introduces LSD and Restaking Product Line
Initially, in phase 1, users will be able to stake five categories of assets:
- Scroll Token (when Scroll launches)
- Pencils Protocol Token
- ETH/ETH Derivatives
- BTC/BTC Derivatives
- Stablecoins
Other high-quality ERC20 assets within the Scroll ecosystem will be gradually added as well.
Users will be able to receive pETH, pWBTC or any “pToken” when they stake that token on Pencils Protocol. PTokens are “staking certificates,” and are essentially certificates that represent the underlying staked token. However, these tokens are ERC20 tokens that can earn additional yield in DeFi pools on top of the yield the underlying token is earning.
Pencils Protocol will collaborate with partner DEXs to incentivize initial pToken liquidity pools to ensure their successful launch. Additionally, users who actively participate in deposit staking early on will receive multiple Points incentives from Pencils Protocol, Scroll, and other Scroll ecosystem protocols.
In phase 2, we will roll out LSD and restaking products, please stay tuned for more details.
The User Journey for Liquid Staking on Pencils Protocol
A user deposits ETH and other assets into the liquid staking deposit vault and receives pETH, representing that user’s share of ETH in the pool. The user can now take their pETH and use it for DeFi activities, like yield farming in Pencils Protocol vaults. When withdrawing their original ETH, the user will receive more ETH than the deposited amount (i.e., the principal ETH plus staking deposit income).
Pencils Protocol Vaults
Pencils Protocol Vaults is a liquidity farming tool. Users can deposit tokens, like pTokens, and farm LP tokens. Pencils Protocol will work with top DEXs on Scroll to help facilitate these pools and give Vault users access to liquidity.
Pencils Protocol Vaults, as a collection of liquidity pools on Scroll, creates a decentralized liquidity market. Different pools can set different rates and leverage ratios to compete for depositors. The Vaults contract will automatically allocate the required funds to create a unified liquidity layer on Scroll.
Pencils Protocol will reward early users with multiple revenue streams. Not only will users earn basic yield from their deposits and staked LP tokens, but they’ll also receive points from Pencils Protocol, Scroll, and DEXs partnered with Pencils Protocol. Pencils Protocol Vaults v2 will expand its partnerships with top liquid staking protocols, giving Vault users even more ways to earn rewards. Users will be able to earn reward points from Eigen Layer, top DEXs on Scroll, and LRT projects.
By offering a diverse and competitive set of rewards, Pencils Protocol aims to attract more users and assets to its Pencils Protocol Vaults to become the go-to platform for restaking and wealth creation on Scroll.
The User Journey for Pencils Protocol Vaults
User B wants to create a leveraged liquidity mining position with ETH and USDC but only has a little USDC. They decide to use Pencils Protocol Vaults to borrow the USDC they need to create an ETH/USDC pool.
Pencils Protocol Vaults will allocate assets into 50% ETH and 50% USDC in the most optimal way and then add these balanced assets to a liquidity pool on one of Pencils Protocol’s DEX partners so that the user can earn fees and yield. User B can further leverage this position through LRTs.
Introducing Pencils — Pencils Protocol’s Rewards Point System
As part of the platform enhancement, we’re introducing Pencils, Pencils Protocol’s new reward point system. Pencils will be at the heart of the Pencils Protocol ecosystem, allowing users to earn rewards and unlock benefits across all of our products, including Staking, Vaults, and the upcoming Shop. Pencils will also give users benefits on Pencils Protocol’s launchpad.
There are several ways to earn and use Pencils:
- Earn Pencils by staking supported assets.
- Use Pencils to boost your allocation or get discounts on new token launches on Pencils Protocol’s launchpad, increasing your chances of participating in high-quality projects.
- Use Pencils to increase your leverage and boost your liquidity mining rewards in Pencils Protocol Vaults.
- Spend Pencils to access exclusive, limited-edition products and services from Pencils Protocol’s merchandise shop.
- As the Pencils Protocol ecosystem grows, we’ll continue to optimize and adjust the Pencil system to better serve our community and support the ecosystem’s development.
Same Launchpad — New Offerings
Pencils Protocol’s core purpose and function is still as the premiere launchpad on Scroll. By leveraging Scroll’s zkEVM, Pencils Protocol gives builders access to cutting-edge technology like proof of humanity, advanced scaling, privacy, and compliance tools.
However, Pencils Protocol’s platform enhancement initiative will also expand Pencils Protocol’s offerings. Users will be able to use Pencils Protocol for staking, liquid staking, and yield farming. Instead of being just a launchpad, Pencils Protocol will become a holistic DeFi platform on Scroll.
Pencils Protocol will also enhance its launchpad capabilities, making participating in token sales fairer, simpler, and more customizable for both users and projects. Expect a more streamlined subscription process and innovative new auction types. Projects will have the flexibility to mix and match these features to create a token launch that fits their unique needs.
To fully grasp the innovative features of Pencils Protocol and how it’s transforming the DeFi landscape, we invite you to explore our detailed articles on our new products. Learn about our advanced staking options, secure vaults, and the unique community point system that are all setting new standards in the blockchain space.
Introducing Pencils Protocol Staking
Introducing Pencils Protocol Vaults
What are Pencils? Pencils Protocol’s Point System is Rewriting the Community Points Playbook
About Pencils Protocol
Pencils Protocol is the next-gen decentralized platform that offers auction services for blockchain native assets and RWAs, along with unified and leveraged yield aggregation services for users to maximize asset utilization.
Through the partnership with Scroll, Pencils Protocol redefines the Layer-2 sectors by utilizing Scroll’s zero-knowledge tech, focusing on scalable, private dApp development and fair-launch principles.
