Building a flywheel ecosystem of value-capture
Hello Ninjas and Sushis,
It’s been over 2 months since we’ve launched DojoSwap, alongside the many many upgrades that we’ve made for the platform. Beyond that, our team has always been innovating behind the scenes to bring new formats of value-capture in the ecosystem. This has manifested in the launch of the $SUSHI and $babyDOJO sub products that we currently have in our ecosystem today. With this burgeoning ecosystem, we understand that some of you might be confused as to what each of our product means, and why our team have made certain adjustments to each of these products. One thing we need to assure you is that none of the moves are whimsical, and are all fully thought out to benefit ecosystem holders maximially. At the core of everything that we do, we have only one aim — to build an ecosystem that is able to constantly capture value to benefit holders of all our ecosystem tokens.
Before we begin answering some of the heartburning questions that you have, let’s first revise each of the assets that currently operate under DojoSwap, and what their unique role in the ecosystem is:
DOJO token
This is our main token. DOJO is built as the liquidity token of Injective chain. Being one of the most liquid tokens on-chain currently, the DOJO token aims to be paired with as many other tokens as possible. This deepens trading liquidity, and increases trading volume against the base DOJO-INJ pair. This is important for eventual sustainability where we rely on DOJO-INJ liquidity providers to continuously provide liquidity purely to earn fees. The net effect is that we can lower the amount of DOJO emissions for providing liquidity, and is what will push DOJO into deflationary status. A simple way to view things for DOJO as liquidity token: more successful DOJO pairs → More trading volume → more demand for DOJO. DOJO is the liquidity rails into the wider dojo ecosystem.
SUSHI token
This is our main NFT token. Built as the first CW404 token, the SUSHI token is the most iconic NFT on Injective — a bet on SUSHI is a bet on Injective and its culture to innovate. At the same time, SUSHI also has the thickest liquidity of any NFTs on Injective currently. Thick liquidity begets stronger confidence for participation as the NFTs that users eventually buy are going to have a guaranteed floor value. The SUSHI token is important in the ecosystem as it represents our identity — cute and deadly, in this entire space. We want for users to spread the word by donning their favorite Sushi profile picture, engaging in conversations with the rest of the crypto-sphere. Beyond that, SUSHI was also built to reward our strongest believers — users who opt to lock up their SUSHI for longer period of times to gain OMA which is a non-transactable asset. There are 2 main huge events planned for SUSHI holders and will be uniquely available only to SUSHI holders. The more OMA you hold, the higher your ratio of rewards in our 2 future events. This is our promise to SUSHI holders that there’s no dilution to the true core utility for those who staked for OMA.
babyDOJO token
Exists as a speculative asset within the Dojo ecosystem as the first reflection token to capture economic excesses resulting from a bull run. With a core utility of earning reflection airdrops resulting from transaction volume, it rewards holders for simply holding it. Beyond that, the team has committed to utilising ecosystem revenue to TWAP buy babyDOJO up to ~150m market cap. All the babyDOJO that is bought up will be sent to the Dojo DAO to help the DAO accumulate DOJO tokens in the future. The commitment to pushing up the market cap is an investment in ensuring that babyDOJO’s volume constantly stays high in the future, which also results in higher DOJO reflection for the DAO. Most importantly, babyDOJO exists to support DOJO by pushing DOJO into a deflationary status via constant token burns.
Key questions from our community
Question: Are you not worried about sell pressure resulting from having many Dojo team tokens in the ecosystem?
Answer: No. As you would have realised by now, the DOJO token acts as the liquidity token of our ecosystem. When users trade between assets such as babyDOJO, SUSHI, ROLL etc, it does not affect the underlying DOJO price. This is specifically due to how everything was structured in a way where the DOJO token is the quote token. Everything derives its price against the DOJO token, and not the other way around. This is why this structure is the best as there’s way reduced selling pressure against DOJO token itself. Everything within the ecosystem is a rotation of funds which represents user’s confidence level of each. The team will then only need to focus on one key thing to ensure all underlying assets appreciate in value; accrue value for the DOJO token by building huge demand for the underlying ecosystem products. As they say, a rising tide raises all boats — and this is what we seek to achieve for all Dojo ecosystem assets.
Question: Is DOJO left behind, or is it not getting utilities?
Answer: NO. This is a super erroneous mindset. Think about it this way. As the main utility token of the ecosystem, all utilities that ecosystem tokens such as SUSHI and babyDOJO are by default proxied to the DOJO token through buy pressure resulting from users participating. The one main utility of the DOJO token is to be bought in scenarios where there’s huge demand for ecosystem assets. As a DOJO holder (possibly large holder if you sold nothing when you first started farming with us), you are able to use your DOJO tokens to participate in purchase of SUSHI to get airdrops, or buy babyDOJO for reflection. That is the DOJO utility. Beyond that, the team is increasingly moving toward a model where the DOJO token is used as the main token of raise for launchpads. This is the largest utility possible as our launchpad tends to generate over millions in inflows for the DOJO token itself. Anybody who thinks that DOJO holders are getting no utility is wrong, as the extended utilities created from ecosystem assets is key. All roads lead to DOJO. All buys happen on DOJO. There’s nothing else you need more than to be able to hold a token which has constant demand, and you can constantly farm more of at a stable APR. Besides, if there should be a token on our ecosystem that ought to be listed on a CEX, it’d be the DOJO token itself as it is the main token. We hope you guys can see the forest for the trees instead of focusing on the smaller details of “oh XYZ token is getting one more thing than DOJO”. This is not the way things are to be considered. The main utility is in being a liquidity token — every new token launch paired against the DOJO is a new utility. If you don’t understand that, it’s fine, let us do our work of building value for DOJO holders in this manner, and you will soon see results in the weeks ahead.
Further, DO always view ecosystem products as a DOJO BETA play. If you believe in Dojoswap and the team, by extension you should also feel bullish about the ecosystem products that are launched. BETA products tend to have higher volatility than the underlying token itself. When DOJO moves up 1%, beta products tend to move up 2% in value, and vice versa for when prices go down. By understanding this, you should be able to understand a little better about how and why DOJO isn’t forgotten. The only utility it truly needs is to be USED by users and projects to pool liquidity against. There’s no need for flashy headlines on “DOJO has a new airdrop utility etc etc”, because IF SUSHI gets the headline, it appreciates 2% in value, and DOJO apreciates at least 1% in value (as a really simple way to view things).
Question: Why provide airdrop utility to babyDOJO token?
Answer: It’s simple. At the end of the day, our team will always support our own ecosystem projects fully. This is so all of you can have huge confidence in our team when we launch our products that aim to build and promote the Injective chain. Beyond that, it is important to understand that these decisions were not whimisical and were already originally a part of MANY of our playbooks. We happened to choose this because most of the commmunity’s interests were aligned. More important than that, there was no dilution to $SUSHI holders contrary to what everyone else would like you to believe. The underlying SUSHI utility transcends beyond external team’s project airdrops as stated above as airdrops were meant as a secondary utility for SUSHI holders. There are huge things planned for SUSHI (and OMA) holders. We provide more utilities to babyDOJO token to provide everyone with more reasons to hold and trade around the babyDOJO token! Imagine having new airdrop announcements, which eventually lead to higher volume against the babyDOJO token, resulting in more reflections!
With the burning questions out of the way, we finally take a look at DAOJO and what it aims to achieve. Without shedding too much information on what DAOJO is from a technical point-of-view, we look at it from a strategic point-of-view on what it aims to achieve.
Governance
As our TVL starts getting larger, we need a way to govern the use of resources properly. Staked DAOJO will be the token of choice to allow users to gain access to voting rights.
Investment DAO
All proceeds of Dojo Labs’ investments will be added into the Dojo DAO to provide backing and to be distributed to DAOJO holders.
Protocol Owned Liquidity
The Dojo DAO aims to lock in 17% of current Dojoswap TVL as part of protocol-owned-liquidity. This number is chosen as it allows the swap to continuously operate through all times without the need of DOJO emissions.
Liquidity gauges/token bribes
Concurrent to governance utilities, liquidity gauges will be setup to allow users to vote on project farms that they love for it to get a farm on Dojoswap’s farm page!
Conclusion
As we’ve mentioned before, as we progress towards building Dojoswap into Dojo Labs, we will need a way to govern the use of funds, and a vehicle through which we are able to accrue and distribute value. For that, we will have a DAO model. The way to gain access to affect policy decisions through the DAO would be through the DAOJO token. We have ever made mention of veDOJO before where the aim is to lock DOJO holders in return for voting rights. We’ve since revised the idea into something that promotes hyperliquidity instead of token-lock tokenomics which exacerbates liquidity issues that Cosmos chains constantly face. Also, it is important to understand that the DAO focuses on DOJO price appreciation through the liquidity token mechanics. Even more details will be shared in due time. Meanwhile, we hope that this update serves you well in understanding all of the ecosystem assets in Dojoswap, and how DOJO is at the core of everything that we do. With all the above said and done, we hope you can appreciate how all of it aims to transit Dojoswap into more than a swap, and more of an ecosystem where all the value is captured into a liquidity blackhole where inflows are more bountiful than outflows — for that is the Dojo way.
With love,
Dojoswap team
Stay Updated With Us
Website: https://dojo.trading/
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