CheeseDAO in the Dawn of Blockchain Gaming
Blockchain gaming takes many forms, from Sandbox to Axie Infinity to Defi Kingdoms. Games can vary from providing users a toolkit to build their own playable worlds in Roblox fashion, to play to earn games, to wrapping Defi mechanics such as providing liquidity and yield farming inside a virtual world. CheeseDAO combines decentralized finance, blockchain gaming, and DAO first governance.
OlympusDAO was the first protocol with the aim of creating a decentralized reserve currency. One that was free from the pegs of traditional stablecoins but one that would not be subject to the volatility of tokens such as Bitcoin or Ether. One of the largest hurdles to bootstrapping a token is the need for liquidity. Before OHM, protocols would incentivize liquidity through yield farming. Users would add liquidity to the token, then stake their LP tokens to receive yield in the protocol’s token. This approach has many shortcomings. The first of which is the drawbacks of offering liquidity incentives. The yield needs to be attractive enough to counteract the impermanent loss risk of providing liquidity. However, the yield cannot be too high, or else liquidity providers create a large amount of sell pressure to cover their risk. Additionally, a large portion of the tokens liquidity is under the control of a large, distributed group of users.
OHM provides a new way to incentivize liquidity: bonding. With bonding, LP tokens are exchanged for OHM. This way the Olympus protocol owns a vast majority of the liquidity for the protocol and allows for a stable and growing pool to exchange OHM in. Bonding also allows users to exchange stablecoins for OHM, which allows for every OHM to hold an intrinsic value backed by 1 DAI. This allows OHM to offer high yields over a long period of time. As users stake OHM, they receive sOHM, which compounds their yield every 8 hours through rebasing.
CheeseDAO employs Olympus’s philosophy on protocol owned liquidity. sers can purchase bonds, where they offer up a specific amount of DAI, 1USDC, or LP tokens for the Cheez-DAI pool. These bonds are rewarded with Cheez over a short vesting period. This allows the CheeseDAO protocol to accumulate and control a large portion of the Cheez-DAI liquidity. Additionally, the protocol will accrue a treasury of assets that backs every Cheez token.
Our protocol builds on the ideas of OHM with a unique, gamified risk protocol. Users can use their staked Cheez to purchase ERC-1155 NFTS. There will be three types of NFTs offered initially: mice, cats, and mousetraps. This rock, paper scissors style of game adds additional utility to owners of Cheez. It offers a chance for users to earn more with preset risk probabilities.
Mice can be staked to earn Cheez over time. However, to claim the Cheez earned, mice owners must pay 20% of their yield to the pool of Cat owners. Additionally, mice can only be unstaked if they have earned a total of two days worth of Cheez. When a mice is unstaked, there is a 45% chance of losing all the Cheez accrued to the pool of cat owners. There is also a 5% chance of losing the mouse and its Cheez to one mousetrap owner.
Cats earn Cheez through extortion and racketeering. Cat owners can stake their cats to add them to the pool. When a Mouse owner claims their Mouse’s Cheez, that Cheez is distributed evenly to all Cats in the pool. When a Mouse is unstaked, there is a 45% chance of all its Cheez being taken and distributed evenly to the pool of staked Cats.
Mousetraps can be staked for a chance to steal Mice from Mice owners. When a Mouse owner unstakes their Mouse, there is a 5% chance that it will be caught in a Mousetrap. The Mousetrap owner who receives the mouse will be chosen randomly from the pool.
The DAO First Approach
Shortly after launch, when Cheez has been fairly distributed, we will launch the CheezDAO. Users can wrap their sCheez for wsCheez, then deposited into the DAO for vCheez, which gives them voting rights over the Cheez treasury and DAO. Users who wrap their sCheez still accrue sCheez rewards over time as their sCheez is wrapped. When a user unwraps, they receive their initial deposit plus all the yield earned during that time.
Through this mechanism we give control over the protocol over to the users who participate in it. The community will have control over all the on-chain operations of the protocol. If they want to decrease yields, they can do so. If they want to increase bond prices, they can do that too. The DAO first approach allows the scalability of our protocol to be managed directly by those who participate in it.
CheeseDAO has no whitelists, private sales, presales, or VC allocations. Our launch will take place in three separate stages. The first of which will be the launch of bonding to receive Cheez on December 1st, 8pm EST. Five days later on December 6th, Mice, and Cats will be able to be purchased with sCheez. Shortly after that, when the distribution of Cheez holders has reached a healthy amount, the DAO will be launched.