The Ones in the Arena: Vader Protocol
“I wish more DeFi projects would focus on building real token utility without having rent-seeking governance switches simply to issue a token. Most DeFi governance tokens are rent-seeking in nature, despite offering P2P platforms intended to dis-intermediate their TradFi incumbents.” — Mervyn, Community Lead, Vader Protocol
The father of decentralized liquidity has returned to the arena.
Vader Protocol was among the first projects to enlist the help of Code4rena’s warden wolf pack, sponsoring a C4 audit contest back in April 2021, when the Code4rena model was brand-new. Clearly they’re a forward-thinking bunch, and we’re excited to welcome them back for another contest.
As our security researchers prepare to dig into Vader’s codebase, we asked Vader’s Community Lead, Mervyn, to talk to us about what they’re working towards, how they think about security, and what he loves most about DeFi.
What are you building, and what sets it apart from similar offerings in the space?
We’re combining all the best elements of DeFi into one single protocol. A two-token stablecoin and stability mechanism token (USDV and VADER), a continuous liquidity pool AMM with slip-based fees, anchored by USDV to bootstrap native stablecoin utility and demand at launch. Impermanent Loss Protection and Single sided no IL staking via Synths. Liquidity mining program via Bond Sales enable long term sustainability of the AMM via Protocol Owned Liquidity.
What’s your vision for your project? What are you building towards in the longer view?
We’re working towards building a truly decentralized stablecoin that has real utility from day 1 on Ethereum. We have seen the success of Luna’s UST and how it has driven real utility through a vibrant ecosystem.
We believe that a slip-based fee AMM, anchored by our native stablecoin, drives utility and demand from Liquidity providers. Protocol-owned liquidity drives this sticky liquidity to back the stablecoin’s purchasing power, with productive collateral generating fees with no rent-seeking behaviour.
“The ecosystem needs to prioritize security above all else, with code competition audits, proper testing frameworks, and guarded launches in order to prioritize user fund security.”
What’s the most innovative idea in your protocol?
Value capture and tokenomics. Most DeFi governance tokens are rent-seeking in nature, despite offering P2P platforms intended to dis-intermediate their TradFi incumbents. The Vader Protocol has 0 rent-seeking fee switches that attempt to siphon off stakeholders.
Liquidity providers are first-class citizens, and the core features of the Continuous Liquidity Pool and Impermanent Loss Protection is the best AMM for LPs.
As long as there is demand for Liquidity Providers to earn yield on their liquidity via the Pools / Bonds, USDV demand will grow, thus growing Vader demand.
It takes courage to undergo a public audit by a swarm of anonymous security researchers. It also says a lot about how much you prioritize security. What advice would you give to those on the fence?
We have seen many projects facing hacks despite audits from top tier auditors. We believe that engaging hackers to audit your protocol via Code423n4 is the best viable long term option for security of your codebase.
Security has become an increasingly vital topic in DeFi. How do you think the ecosystem needs to evolve in order to rise to the challenge?
We believe the ecosystem needs to prioritize security above all else, with code competition audits, proper testing frameworks, and guarded launches in order to prioritize user fund security.
What gets you most excited about DeFi?
Dis-intermediating traditional finance via open protocols, without rent-seeking governance fee switches.
Complete the following sentence: “I wish more DeFi projects would…”
I wish more DeFi projects would focus on building real token utility without having rent-seeking governance switches simply to issue a token.
What DeFi project name do you wish you’d thought of first?
Vader Protocol! We love the memeability.
What do you geek out about, beyond DeFi?
Protocol Owned Liquidity
Is there anything else you want to make sure we include?
We have built the entire protocol and community with 0 funds raised, completely fair launched, and intend to launch our token with a fair and wide distribution.
Learn more about Vader:
- Website: vaderprotocol.org
- Discord: discord.gg/vaderprotocol
- Telegram: t.me/vaderprotocol
- Twitter: twitter.com/VaderProtocol
Vader’s $75K security audit contest opens November 9, 2021, and runs for 7 days. Details at code4rena.com.
The Ones in the Arena spotlights emerging and established DeFi projects and their founders, with an eye to celebrating and learning from them. The series’ name is inspired in part by Teddy Roosevelt’s famous quote, which has a central place in Code4rena’s philosophy.
