Picasso — The Reinvention of a parachain
The introduction of two new tokens, $CHAOS — a rebasing treasury token, and $PBLO — Protocol owned AMM
Whilst the updates for the Composable ecosystem have consistently continued at full pace, the imminent launch of Picasso marks a major milestone in our broader roadmap. We’ve made important advancements to the design of Picasso, looking beyond the norms of what a parachain is capable of to truly push the boundaries and realize the full potential of substrate and the Kusama ecosystem.
Instead of limiting Picasso to becoming an application-specific chain, we are leveraging our secured parachain slot to create an L1 that is capable of realizing the potential of building on Kusama. We have already made our initial plans for Picasso clear — creating an ecosystem of cross-chain innovation through building DeFi primitives, pallets, and protocols to usher in a new generation of interoperability by combining it with bridges between substrate, IBC, and EVM L1/L2s.
This alone would create a chain that covers the majority of DeFi utility, from DEXs to perps, to lending markets and protocol owned liquidity. Additionally, by opening up Picasso to other builders we are uniquely positioned to become the entry-point for protocols wanting to enter the substrate ecosystem and achieve a native cross-chain web3 experience.
Sit down anon, it’s about to get real.
Our desire to truly innovate and create a chain that innovates by introducing new primitives within the entire Dotsama ecosystem has led to significant concepts that are not only new to substrate, but ones that truly evolve the current paradigm of what chains and protocols are capable of.
Picasso now takes its architecture significantly further by introducing protocol owned liquidity, sustainable yield generation for token holders, and active treasury management to fuel an entire ecosystem of growth.
Our goal has never been to innovate for the innovations sake, nor hype for that matter. The vision for Picasso has been to create a sustainable yield generating ecosystem, that provides ample use cases for introducing the paradigm shifts we are creating with our cross-chain communication technology, and eventually intra application communication.
At the same time, we see protocol owned liquidity and active treasury management as powerful mechanisms in which we can bootstrap the Picasso ecosystem to achieve significant liquidity and growth. Thus, we want to leverage these new concepts of bonding to create a significant treasury that allows us to build a chain that would truly further our broader vision. Liquidity is the single biggest factor for any new protocol or chain, and whilst we are beyond confident in the technical development of Picasso and its protocols, our new treasury design allows us to be actively aggressive in acquiring the TVL necessary in order for our ecosystem to flourish.
Picasso is an L1 that will host an entire ecosystem of DeFi applications and cross-chain infrastructure. The Picasso chain itself will also have stakes in its incubated protocols and most importantly be generating yield, with this unique combination enabling us to build a treasury unlike any other.
Therefore, the most effective strategy to capture and grow this value is through the introduction of $CHAOS, our rebasing treasury owned liquidity token.
Through the below revenue streams, Picasso takes the concept of protocol owned assets a significant step further by creating an actively managed war chest that provides sustainable yield to token holders, whilst also opening the ability to bootstrap liquidity and incentives across the entire Picasso ecosystem. In addition to having a channel open that will allow KSM to be bridged to Picasso, the initial integration of our Mosaic pallet adds a well-needed entry-point for EVM assets to be bridged to Kusama and thereby allowing sufficient liquidity and trading pairs from launch. The point isn’t to rehash these existing concepts to create short-term hype for Picasso, it’s to build a treasury that enables the ecosystem to truly realise it’s a long-term vision, providing and incentivising liquidity across all of our protocols.
To summarise why the treasury will become so valuable, Picasso will earn revenue through:
- Transaction fees and network activity (gas)
- Composable Labs tokens (projects that are incubated by Composable labs give a portion of supply to Picasso treasury, e.g Angular)
- DEX trading fees (and other protocol revenue for that matter based on the % of token supply held).
- Allowing users to buy tokens at a discount through bonding
- Liquidity mining with existing assets in projects deployed on Picasso
- Treasury as an angel investor
- Treasury gives out grants with right of first investment
- We will accept gOHM into the Picasso treasury, thereby establishing a close relationship and signalling our commitment to the Olympus ecosystem as we introduce them to substrate and Dotsama
To break this down more simply, through combining protocol owned liquidity with the fact that Picasso will also own its own incubated protocol tokens, we will create a treasury that actively LPs and earns yield on its holdings and additionally uses its funds to direct and incentivise liquidity to create a flywheel of growth within the Picasso ecosystem. Whilst many other protocols have explored unique applications of treasury funds and bond revenue, the Composable Labs incubation model puts Picasso in a position that allows it to think outside the box and take these concepts notably further. In addition to earning yield on its own protocol owned assets, Picasso will also earn network fees and revenue from its incubated protocols, therefore becoming a chain that has significant revenue that it retains, manages, and distributes back to token holders through the $CHAOS token. From day one Picasso will be generating revenue and whilst we will use bonds to grow the treasury, specifically focusing on KSM liquidity, we remain focused on creating a sustainable $CHAOS inflation schedule from launch. Users will be able to stake $CHAOS for significant yield opportunities that are currently not available in Kusama. In short, $CHAOS allows us to create a rebasing token, which is the most effective way for growing the Picasso treasury and distributing yield generated, whilst additionally avoiding the selling of protocol owned funds.
The first protocol to launch on Picasso will play a significant role in the treasury design as well as the wider DeFi ecosystem.
That first protocol is Pablo, our DEX.
The $PBLO token will be 100% community-owned and bought at a discount through bonding LPs. These LPs are then owned by the PICA treasury, thereby combining the innovation of DEX owned liquidity with treasury management to truly kickstart a new generation of $CHAOS. Initially, $PICA will only be traded via PABLO, thereby concentrating liquidity and activity to bootstrap the Picasso ecosystem and treasury funds.
The treasury token, $CHAOS, is a rebasing derivative that thus allows for exposure to the broader Picasso ecosystem, while simultaneously serving as an allocator signalor for the treasury. We imagine the future where $CHAOS holders will propose and direct funds to increase and incentivise liquidity across the various Picasso protocols. This opens the door to creating Picasso gauges that determine where liquidity is allocated, thereby establishing strong governance dynamics for the $CHAOS token that add additional value and utility.
By having a treasury backed by network revenue, active yield generation, hard assets, and protocol owned liquidity, Picasso becomes the genuine catalyst for Kusama season and a reinvention of current DeFi concepts. Through Composable Labs, one of the most significant factors for Picasso is that it will have a consistent stream of newly incubated protocols launching on its chain. Initially, we will launch our DEX Pablo, followed by our isolated lending market Angular, with the focus then shifting on other DeFi essentials such as perps, options, yield aggregators and privacy. These new protocols will continue to compound the value of the Picasso ecosystem, providing users with new opportunities and utility, and now through the $CHAOS token, we will fully leverage this value accrual to further bootstrap liquidity, development, and effectively distribute value to token holders.
The objectives for $CHAOS
- Leveraging the concept of protocol-owned-liquidity to bootstrap liquidity and TVL within the Picasso ecosystem
- Effectively compounding the value of our ecosystem tokens and distributing revenue without selling protocol funds, through the rebasing of $CHAOS
- Becoming a significant holder of KSM and establishing deep liquidity
- Allowing Picasso to become self-sufficient in acquiring parachain slots
- Growing a treasury of strategic assets that enables liquidity gauges to direct funds for incentives across Picasso protocols
- Allowing the Picasso treasury to bootstrap liquidity and growth of new incubated protocols
- Leveraging treasury funds to form strategic partnerships with protocols onboarding to Picasso, e.g accepting new assets into the treasury through bonds
- The treasury acting as angel investor in incubated protocols
Optimizing the launch and initial liquidity for Picasso
We have approached the launch of Picasso and its protocols very methodically and designed the roadmap in a way that accounts for as many variables as possible, the majority of which are unknown — except chaos. We are conscious of the fact that 50% of crowdloan rewards are unlocked on TGE, and therefore our thought process behind the launch plan was to give users significant incentives to lock their tokens up whilst simultaneously being as capital efficient as possible in order to grow TVL and liquidity from day one.
The plan to have $PICA exclusively trade on our DEX, as the first step in concentrating liquidity and activity to own our chain, with the initial bonding for $CHAOS and $PBLO tokens also providing Picasso access to significant liquidity. For users that wish to not have exposure to $CHAOS, we will additionally allow the staking of $PICA to earn incubated tokens. The relationship between Picasso and its protocols becomes deeply symbiotic, where the Picasso treasury owns significant liquidity that it will provide on the DEX, which therefore boosts and incentivises trading, which Picasso itself will earn back through fees and growth of the protocol tokens it already holds. Whilst protocol owned liquidity has allowed other protocols to avoid mercenary users who dump farming rewards, it still doesn’t ensure that treasury funds are used productively. Therefore, we see a significant flywheel of growth that Picasso will establish with the treasury being the catalyst to bootstrap activity where it’s needed. This is literally just the beginning, with our money market — Angular, expected to launch in Q1 also, thereby enabling Kusama season to start as the essential DeFi primitives are live with TVL and liquidity on a single chain.
From launch, users will be able to transfer KSM to Picasso, and additionally, we are excited to have our Mosaic pallet live to bridge EVM assets too. Simply put, Mosaic is a significant addition to the Kusama ecosystem as a whole, allowing a large TVL of tokens such as $USDC and $DAI to be bridged to the Picasso chain and used within our ecosystem. Additional parachain channels will be opened, with Statemine being the priority in order to list $RMRK on Picasso protocols. Initially, we will launch the trading of $PICA and $PBLO, incentivising liquidity for various base trading pairs through a liquidity rush event. After achieving initial stability, we will then proceed to launch the bonds for $CHAOS, firstly single-sided $PICA at a fixed price to allow our early supporters entry at a fair valuation.
Why do we need the $CHAOS token?
Picasso is still ultimately a layer 1, and therefore needs a stable non-rebasing token for collator staking and paying network fees. Given that the Picasso treasury additionally holds several other strategic assets, we see the $CHAOS token as a way to have leveraged exposure to the Picasso ecosystem. Allowing $PICA holders to bond for $CHAOS at a discount creates an entry into a position without additional requirements, and likewise, we will establish significant market mechanics in order to ensure the sustainable price relationship between the two tokens.
The Picasso treasury will be generating significant revenue from multiple assets and streams, and therefore we decided that creating $CHAOS as a rebasing token is the most effective method to distribute the yield and value accrued. Another key motivation for taking the rebase approach is because the treasury will mostly hold Picasso incubated tokens and LPs from PABLO, and therefore rebasing $CHAOS allows us to grow value without having to sell treasury assets for buybacks etc. Once Picasso is in a phase of initial stability, we will continue to evaluate all metrics to determine the best operations moving forward, focusing on our goal for strong treasury growth from asset generated revenue, and therefore reserving the use of bonding to focus on specific assets that we wish to acquire for strategic purposes.
Preparing for the next generation of blockchains
Now that the vision for Picasso has been revealed, we will continue to release posts in the following days that cover the $CHAOS token, Pablo, and the launch plan in specific detail. Our vision for Picasso is more ambitious than ever, and we have analysed every detail to ensure our ecosystem rolls out as effectively as possible. Our commitment to Kusama and Polkadot remains a core part of our underlying vision, and our revamped strategy enables us to achieve a significant first-mover advantage in an ecosystem that we see as the future of web3.
Still expect Chaos? $CHAOS has arrived!
For more information about Composable & Picasso and how we are architecting the unified DeFi landscape of the future, check out our socials: