Introducing: EDO Nodes, the latest tool in Ronin’s anti-inflationary arsenal
Motivation:
Rebasing DAOs have a serious problem — inflation. As investors purchase bonds, the protocol mints a large amount of tokens. The amount of these new tokens exceeds the reward that is to be paid out to the original bonder, and the difference gets split between the protocol and the stakers, since they are minted at an implied price of 1$.
As a result, every time tokens are minted, the increase in supply outpaces the increase in treasury value, even though parity is required to maintain a stable price. This dilution becomes more severe as the APY increases, since the surplus supply hits the market harder and faster.
This inflationary issue is actually a “feature, not a bug” of OHM and its forks. After all, the goal of a reserve currency DAO is to be backed, but not pegged to 1$, and to eventually trade at around that backing price. This would be fine, but the market has shown that the prices of these tokens have a tendency to go far beyond this backing, and crash violently.
The whole purpose of the 1$ backing was to define clear risk and to guarantee that the investment cannot “go to 0”. This proved to be technically true, but practically irrelevant, as prices went up into the thousands, and a drop to backing constituted a fall of 99.9%. This is not a “defined risk” — this is unlimited risk, and it results from hyperinflation that exists on purpose in such projects.
The above problem is fundamental to the traditional Ohm model, and must be solved in order to guarantee sustainability and longevity of the project. While there are many workarounds which retain the “Ohm fork” core, the team believes that the flaw is fundamental (in fact, it is there by design), and can only be truly dealt with by a fundamental change.
Thus — EDO Nodes are born, which aim to resolve this problem before it ever has a chance to fester in the protocol.
EDO Node Definition:
A EDO Node is a tradable and transferrable NFT, which bears yield in $RONIN. They are virtual nodes, which can be obtained directly from the protocol or purchased on an open market. When an investor purchases a Node, they obtain a perpetual right to a proportion of the protocol’s income, which includes our NFT Marketplace, P2E Incubator/Arcade, NFT Bond revenues, Staking Rewards, and Investments. This yield will be paid every 24 hours in RONIN.
In the future — these NFTs will also bear utility in various RoninFi Ventures, with more details coming in the future.
How to acquire nodes:
There are three ways to get an EDO node:
1. Mint node using RONIN
2. Purchase node from the protocol with an NFT Bond
3. Buy on the open market
Keep in mind that method (1) and (2) will be subject to supply restriction — it is not possible to create an unlimited amount of nodes. Their supply will be tightly regulated to maintain sustainability.
When purchasing EDO Nodes from the protocol via an NFT Bond, the nodes will be sold at a discount. This type of purchase will be subject to 5-day vesting. The price of the bond in terms of MIM (or other assets) will be determined automatically based on the discount factor and the prevailing RONIN market price. Once a bond is purchased, the node is minted, but not yet released to the buyer. During this period, the protocol keeps the node rewards. After the vesting is complete, the bonder assumes full ownership of the node.
Node Tiers and Pricing:
There will be several node tiers, which constitute different ownership stakes in the protocol, and thus have different supplies, prices, and yields:
Node Revenues Allocation:
When a Node is minted using RONIN, 80% of it is burned, and the remaining 20% will be allocated to LP. However, this LP allocation is not immediately turned into LP tokens, but instead held in reserve until a sufficient amount of MIM has been accumulated from Node NFT Bonds.
When nodes are purchased via an NFT bond, the protocol will take the RONIN allocated to LP from Node Mints, pair it with MIM generated from Node NFT bonds, and deploy LP. Any MIM surplus will go into the treasury.
Further, there will be a 5% royalty on the sales of EDO Nodes.
Thus, all three avenues of node acquisition benefit the protocol.
Node Supply Regulation:
The relative supply of nodes will be in accordance with the previous table. However, the total supply will be controlled at the discretion of the team, to maintain stability of the protocol. Eventually, once sufficient market data has been gathered, the team will consider an automation of this process.
What this means for Rebasing & APY:
When the protocol first launches, it will do so without this feature. The nodes will be implemented ASAP, being priority #1 for the team until they are deployed. We anticipate a delivery time of approximately two weeks. In the interim — the protocol will function with a high APY and will provide rebase rewards as usual.
Once nodes launch, the rebase rate will be significantly reduced, such that owning the lowest tier node will be more profitable than staking an equivalent amount of RONIN.
Rebrand:
As a result of our shift away from an Ohm fork, RoninDAO decided to rebrand, to communicate clearly that we are NOT an Olympus fork. Our new name is RoninFi, and this will be updated across all channels within the next several days.
Disclaimer: The team reserves the right to make alterations to the system in the interests of the protocol. Any such changes will be adequately communicated to the community.
Miscellaneous Notes:
• Node owners will be able to choose a name for their NFT. Please be aware that the chosen name could affect the market price of your node.
•The team is considering implementing a special (1/1) “Emperor” node. This node would have the highest yield of all, but would not be transferrable or sellable. It would give the holder governance rights and membership on the team (access to full information about what the team is doing, their chats & calls, as well as veto rights). The community would hold periodic votes to elect an Emperor. In this way — we would achieve true community governance. Be advised that this idea is being shared in the spirit of transparency, and has not been confirmed. More updates will come as it develops.
•The node yield can be modified after their launch. The team will refrain from making any modifications unless absolutely necessary.
