As we approach the 5th month of CASH’s existence, we want to update the community on what the team has been up to — and what to expect in the coming months. I’m jdx, and I will be leading development of the platform with support from 0xGhostChain. I will also be facilitating the communications to the community as we transition to a DAO model. The purpose of this article is to introduce you to what the Cashio DAO will do, and how you can get involved.
TLDR; Cashio DAO will provide as a yield-boost platform for CASH-paired stable LPs, where users can vote on proprietary ‘proxy gauges’ through Tribeca with a Cashio Governance Token (CGT) in order to weigh the votes made by the Cashio treasury’s continuously permalocked veSBR & veSUNNY. By operating as a DAO, Cashio protocol will be able to leverage its stable coin & Cashio Governance Token (CGT) reserves in the treasury for DAO-led initiatives in support of the primary mission: Increase adoption of CASH & maintain its peg to USD.
What is Cashio?
Cashio was launched in November of 2021 by developer 0xGhostChain in order to create “A decentralized stablecoin made for the people, by the people.”
You can mint cash by depositing Saber USDT-USDC LP tokens, and by burning cash you withdraw the underlying LP tokens. As CASH is in circulation, LP tokens generate SUNNY/SBR yield for the Cashio treasury via Quarry Protocol.
Cashio is the platform that allows users to mint and burn the CASH stable coin. You can then use CASH to participate in DeFi. Since November, CASH has been added to over 30 pools across Saber, Sencha, and Saros. The initial designed of Cashio was engineered to provide liquidity to Saber, since you need to deposit USDT/USDC into Saber in order to get the LP token to mint CASH, and once you have CASH you can claim yields on Quarry by depositing CASH and other stable coin of choice into Saber for CASH-paired LPs. In other words, every $1 of CASH is ~$2 of TVL for Saber. By incentivizing CASH-paired LPs, more TVL is attracted to Saber, and more USDT-USDC LP tokens will be in the Cashio treasury — where they continuously accrue SBR/SUNNY rewards as long as CASH is in circulation.
Multiple incentive campaigns were run on Cash-paired LP tokens, with one of the main campaigns being our Cash Cow ($COW) memecoin, which was the first test of gauges on Tribeca — allowing COW holders to sway emissions of COW to their favorite CASH-paired LPs. Since CASH is built on Saber, veSBR holders also had the ability to increase SBR emissions on CASH-paired LPs. Other initiatives include partnerships with UST (Terra), where users were offered LUNA + SBR + COW emissions for providing liquidity and depositing to Quarry. This has been the main use case for CASH as a stablecoin over the past few months — to be an asset strategically operating within the Saber Ecosystem, where other stable coins and protocols can incentivize liquidity through external factors.
How is Cashio DAO any different from Cashio today?
The main distinction between Cashio pre-and-post DAO is that protocol incentives will become dependent on internal factors, not external factors like partnership emission campaigns & inconsistent APY from memecoins with fail to hold value over time. Instead, the inherent value within the Cashio protocol owned liquidity (POL) will be put to work increasing CASH-LP yields, which will hopefully increase TVL, which by design will also increase CASH-LP yields. This is made possible by the development of proxy gauges — which will provide the Cashio DAO members the ability to participate in the Saber Wars by voting on SBR/SUNNY gauges on behalf of the Cashio DAO treasury.
Gauges are a Tribeca Protocol function built by Quarry that allows a token issuer (such as Sunny or Saber) to have emission rates across Quary liquidity mining pools decided by token governors vote weight (veSBR/veSUNNY). Proxy Gauges are a custom version of this contract, built by Cashio, which will allow the Gauge votes on Cashio’s Tribeca DAO to determine the relative weights of the Cashio Treasury’s veSBR/veSUNNY vote weight across pools. In other words, Cashio Governance Token holders get to vote on how Cashio votes with its generated SUNNY/SBR.
Cashio was specifically designed to produce SBR/SUNNY since the collateral it takes to mint CASH are liquidity pool (LP) tokens that claim (1) Saber platform fees (in the form of LP tokens) + (2) SBR + (3) SUNNY. Instead of having these assets just continue to sit in the treasury (as they have since inception of the Cashio protocol), the Cashio DAO will permalock these tokens in SBR/SUNNY DAOs in order to have Cashio DAO members to vote on which Cash-paried pools will benefit from increased SBR/SUNNY rewards. It will also use the stable coin reserves to fund its operations.
Permalocking is a new concept to Solana. When you use Tribeca Protocol to vote on gauges you must lock your token for a certain amount of time (usually with a max of 5 years). Instead of having the tokens unlock over time, Cashio will automatically increase the lock period to 5 years at all points in time. From the perspective of the tokens being permalocked, they are essentially pulled out of the circulating supply forever — or burned. The permalock is where the boosted yield comes from, since users don’t need to permalock their SBR/SUNNY, just vote on how the permalocked SBR/SUNNY is allocated to vote on pool emissions. Users can vote using their Cashio Governance Token which represents a % of the permalocked votes.
By having the incentives come from internal factors, we are able to create a flywheel that increases TVL in Cashio as people claim increased yields, which in turn increases emission rates over time as more collateral is generating yield for the treasury to permalock and further increase yields.
What is the Cashio DAO’s purpose?
The Cashio DAO is tasked with increasing the adoption of the CASH stable coin, and to continuously maintain the peg. This is the basis for deciding whether a proposal is beneficial for the DAO, and whether it is worth using funds from the Treasury for an initiative. The DAO will also operate a platform for mass participation in Saber Wars for stable coin holders. The goal is to make CASH the most widely adopted base-pair in Saber, so that anytime someone swaps between stable coins they will route through CASH. For example, fans of UXD may acquire the Cashio governance token in order to increase SBR/SUNNY emissions to UXD/CASH, which will receive boosted rewards from the Cashio treasury, and then attract more liquidity from UXD and CASH holders to this pool. If someone where to then swap their SOL to UXD their money would (ideally) follow some kind of route like this: SOL > USDC > CASH > UXD. This is because USDC/CASH has extremely high liquidity, and in the future other pairs like UXD/CASH will too.
The value of CASH as a stable coin is not that it is the most decentralized, censorship resistant, or has the tightest peg. Other stable coins tackle these problems much better (such as UXD), but they also still require deep liquidity to get widely adopted. This is where CASH comes in.
The value of CASH is in its ability to aggregate liquidity from stable pairs in order to boost yields gained on stable pairs. Boosting yields will further attract more liquidity, and accelerate the flywheel. This only works if CASH is a neutral base pair for many (if not all) stable coins on Saber. As these pools gain the most liquidity, any transaction that swaps across stable coins will run through CASH for the lowest slippage, instead of USDC.
Furthermore, the DAO model gives holders of the Cashio Governance Token the ability to vote on all aspects of platform development — with one important factor being the addition of more collateral. When Cashio was made in November, USDT-USDC was the most important source of liquidity for Saber — but it is not very decentralized or censorship resistant. Now, other LPs such as UST-USDC have higher liquidity, while lowering the amount of centralization. Other pools, such SolUST-UST, are even more decentralized. Imagine if Cashio took UST/solUST as collateral and consistently had ~20% APY growing within the treasury? More collateral will diversify the treasury, and hopefully lead to higher rates of SBR/SUNNY generation for further permalocking.
Wen Cashio DAO?
The Cashio DAO will be launched once we’ve finished developing and testing the proxy gauges. These will have an identical UX as the current Gauges on Tribeca, but will vote on behalf of the Treasury within SBR/SUNNY DAO’s instead of being like normal gauges to vote on emissions of the governance token you’re voting with.
We are also currently discussing a potential buyout from Saber & Sunny DAOs. You can read the discussion from the Saber forum here. This would allow our DAO to bootstrap the gauges with permalocked veSUNNY/veSBR which we can allow their holders to vote on our proxy gauges with more power than if the buyout didn’t occur (therefore attracting more liquidity). This will also align SBR/SUNNY holders with CASH adoption more directly. Feel free to ask questions in the discussion forums about the buyouts, or add any relevant thoughts that the DAO should keep in mind. We will also be available in discord to answer questions.
Check our website for updates on when Cashio Governance Token (CGT) emissions begin, and this medium will be updated with a post on the final allocation of the token once the buyout discussions have been finalized.
