Degen VC in May: An emerging hub of Store of Value innovation
A round up of Degen VC’s Store of Value innovation, a look at our strategy, and a glimpse at the future.
Overview
Arguably, blockchain based value can be categorised as three types: store of value, transfer of value and derivation of value.
Degen VC can put all of its projects in one of these categories sometimes with overlap of course to a greater or lesser extent. As you will see in this update, the delineation is helpful from a strategic perspective.
Store of Value
In terms of Store of Value projects Degen VC has launched:
- NOS (soon to become NOS 2.0 see below);
- Rock3t; and,
- INFINITY
- And it has hinted at plans to launch a Safer(er)moon.
Round up
Degens stumbling across Degen VC might, at first glance, conclude somewhat of a scattergun approach to store of value projects innovated by Degen Labs. This part of the May round-up should help to aleviate this concern by explaining how each project is fundamentally different and by creating a picture of Degen Lab’s vision RE Store of Value. There has, of course, been learning since Rock3t launched earlier this year — stategy has naturally evolved too.
In summary:
- Rock3t seeks a DAO governed release of its total supply into innovative smart contracts that the community wishes to adopt over time because their mechanics support its growth and defend its value technically and mathematically. We see its roadmap rolling out as follows: experimentation (happened already), structured innovation, DAO governed implementation, machine learning supported DAO, AI DAO-led store of value finance.
- NOS was, of course, a fork of Rock3t (not designed by Degen VC) which distributed all of the supply and took away most of the smart contract owner control. But it was flawed. Note that we have now locked the NOS liquid vault through changing its oracle because we discovered a vulnerability in it. We have snapshot NOS holders. Next steps are defined below in “NOS 2.0”.
- INFINITY features a rebase mechanism that continuously rewards hodlers. In addition, FOT tokens capitalise liquid vaults that have the community’s desired characteristics. In this respect it is like Rock3t but Rock3t keeps significant reserves in its treasury whereas INFINITY has expended them all for the BSC token and has published its plan to distribute them all for the Ethereum token soon.
- Safer(er)moon could improve on the immensely popular Safemoon by using rebase to achieve “reflection” (see full discussion below) and using a liquid vault primarily for LP locking and, potentially, much more.
Between NOS 2.0, Rock3t, INFINITY, and Safer(er)moon we aim, therefore, to cover all the most important mechanisms (available to blockchains on which smart contracts work) that offer their users technically and economically sound store of value.
Here’s how …
Rock3t
Importantly, it's a DAO. The focus will be formal, on chain community decisions regarding the use of its supply. Initially, Degen Labs will propose next steps. Increasingly we see these being sourced via Gitcoin bounties decided upon by the DAO.
For those who follow and listen to Ocean Protocol Trent McConaghy’s treatise on the AI DAO, the importance of Rock3t will sink home. It is (and this is not to suggest that it will succeed as Bitcoin has) as ambitious as Bitcoin is. In the future an AI DAO could govern the optimal allocation of $R3T to smart contracts that best achieve its store of value purpose.
NOS 2.0
NOS, like Rock3t, featured variable buy pressure, temporary user LP locking and permanent LP locking mechanisms. NOS 2.0 will feature some or all of these in an improved format and possibly on Binance Smart Chain instead of Ethereum. It will be a new token. To this end we have done / will do the following:
- Locked the vulnerable Liquid Vault so no-one can withdraw LP tokens.
- Snapshot token holders and LP holders so we can evaluate a new alphadrop of the new token.
- Assessed who was airdropped NOS, who was part of our DGVC LP and who are new holders. Random airdropped wallets that did not increased their holding and were not DGVC LP will not be included in the new alphadrop.
- Preparing a new NOS vault design ready for relaunch and that continues to focus on buy pressure and permanent LP locking but that changes the variable user LP lock to a fixed mechanism. There will be a period of active co-creation on Discord starting right away.
- We will also institute a vote on whether or not to kill the NOS token by changing its FOT to 100%.
INFINITY
INFINITY will be the primary driver of Liquid Vault innovation, some of which will undoubtedly support Rock3t’s vision too. It’s deflation and rebase are hardcoded placing the role of price defence and strength to continuous Liquid Vault design innovation.
It is a super-charged project and looks to be a milestone of recent market developments and innovation as well as our own experimentation in Degen Labs.
Saferermoon (placeholder obviously because Safermoon is already taken!)
Safemoon without sell pressure and centralized parties controlling everything
How to best describe Safemoon?
Is it fundamentally an attempted vampire attack on Pancakeswap / $CAKE? If so it's a paradigm shift.
Safemoon started with a compelling token story — 5% of FOT distributed by Bitmart as rewards aka “reflection”, plus constant addition to the LP by selling 2.5% FOT pooling it with the remaining 2.5% FOT to create a “price floor”. They also promoted ambition towards $SFM being the pair for tokens on its new Pancakeswap-killer exchange (see the pin in their telegram) as well as education, charity, NFT exchange, video game integration, offices around the world, jobs for Africa, scholarships and world peace (that last one is the only one missing actually).
But here’s the thing, the LP that is being created is described as going “into multiple pools used by exchanges”. And the 5% of FOT to be redistributed to the community has still not been redistributed by Bitmart nor do we know how it will be redistributed fairly to non Bitmart users. Very little is “DeFi”, locked, automated or “safe” about Safemoon.
It is a token with constant sell pressure generating tonnes upon tonnes of cash, which being held by people for “stuff that's planned”.
But the idea of overtaking Pancakeswap is wild. $Cake currently has 262,265 holders and a $10bn market cap, $SFM has 1,518,510 holders and a $4.3bn market cap. A MASSIVE community has rallied in support of the Safemoon team for reasons that are, well, new. They asked for “donations” to build their DEX and raised over a million dollars in a few days.
When you think about it, most “governance tokens” are a bit naff — ERC-20 tokens that allow you to have a say and do nothing else. Why not have a governance token that is an interesting store of value too? Safemoon has kind of launched a DEX by launching a cool token before even starting to build the DEX and the success of their approach has left most IDOs in the dust.
Safemoon is a pure-play “people power” project , but it’s core idea could be an early intersection between innovative store of value tokens and core ecosystem tokens (such as an exchange token), like this:
Degen VC’s idea
We saw Safemoon’s popularity and assumed it was about its token design. We realised we could do better by:
- actually locking the LP by sending it to the zero address;
- creating the LP with external liquidity using a liquid vault rather than by selling tokens from the smart contract itself;
- redistributing of the FOT income by using a rebase rather than centralized intermediaries; and,
- launching on Ethereum for more complete decentralization.
But maybe it's not all about these mechanics. Maybe Safemoon is mainly about community and people just wanting to be part of a massive crowd that takes over corporatized and venture capitalist financed projects giving most of the value back to the crowd.
We love this. It is what Degen VC is all about. So we are seriously considering a technically better, more decentralized and all around “safer(er)” Safemoon that complements our other Store of Value projects but maybe does much, much more.
The future
Our projects fit and sometime overlap in three categories:
We want to make two announcements relating to future development in this update:
- In 2021, we will launch a new innovative DEX;
- We are working on a token aka safer(er)moon (placeholder name obviously) that will sit in the middle of the above venn diagram. How? Hodl and see…
