We have some bad (but not terrible) news to share.
E-Day has been delayed by one week. The new date is 28/11/21.
The deployment of EthOS will be one the largest ever code deployments in the history of Ethereum. It is a true leviathan (more than 40 smart contracts), and will revolutionize the network. Unfortunately we encountered some issues as deployment was about to begin. These aren’t critical issues, but we’ve decided to take the extra week to make sure everything deploys smoothly and securely; it will take extreme precision.
But we are sharing something today — this article. It offers a relatively detailed insight into the economics of $OS and the workings of EthOS.
We’re sorry guys — but we’re looking forward to next Sunday.
$OS Economics
EthOS is ruled by $OS. Holders directly govern its finances and development, and in an entirely on-chain, decentralized and granular way.
Governance happens at two layers: the Root Layer and the Governance Layer. The Root layer is where development is managed, and the Governance Layer is where finances are managed.
But before we get into the finer details of how governance works, let’s go over the general economics of $OS.
Inflation
The total initial supply of $OS is 1,000,000. This will increase via inflation, which begins at 8% (80,000) of that initial supply per year.
$OS holders have exclusive governance rights over inflation, and can change the rate at any time. The team has no special permission to influence this. This is explained in detail in the governance section later in this article.
Inflation Distribution
Inflation events happen daily, and the $OS is distributed as follows.
- 30% to Farming Rewards
$OS holders can farm this $OS by providing liquidity, via the EthOS interface, to the OS-ETH pool on Uniswap v3.
- 25% sold for $ETH for the EthOS Private Treasury
This $OS is sold for $ETH in the same pool, and that $ETH is distributed to the team’s private treasury. We had originally planned for 45% of inflation earnings to go to us, but decided to reduce it to empower $OS holders and Delegations. We believe the new setup strikes the perfect balance between protocol stakeholders and the development team.
- 45% sold for $ETH for the EthOS Public Treasuries
This $OS is sold for $ETH in the same pool, and that ETH is distributed to the Splitter, which every three months redistributes it among the four public EthOS Treasuries — governed by $OS holders — as follows:
- 27% to the Dividend Farming Treasury
- 25% to the Investment Manager Treasury
- 40% to the Delegation Grants Treasury
- 8% to the Main Treasury
Before we explain the Treasuries in more detail, let’s cover their other sources of revenue; they earn not only from $OS inflation, but also from Business Model Fee earnings and Investment Management earnings.
Business Model Fee Earnings
EthOS charges fees for the use of the Factories it provides to the platform:
- The Factory of Factory (FoF)
- The Covenants Farming Factory
- The Fixed Inflation Factory
Fees can be paid in one of two ways:
- Regular fee
- $OS burn fee
Earned fees are sent to the Splitter for the next quarterly redistribution.
The rates at which they are taken can be governed by $OS holders at any time, allowing them to rapidly and dynamically adjust to fluctuating market conditions. More info can be found in the Governance section below.
Investment Management Earnings
As mentioned above, 25% of the $ETH earnings from $OS inflation go the Investment Manager, which invests it in a basket of four tokens, which to begin with are $ENS, $GTC, $DPI and $MVI.
20% of the total ETH is sold for each, and the remaining 20% for $OS, which is immediately burned.
Then once a week, a small percentage of each is sold back for $ETH, which gets sent to the Splitter for the next quarterly redistribution.
$OS holders can vote to change the four tokens at any time. We’ve chosen $ENS and $GTC because they are very solid projects that are respected by the entire Ethereum community, while $DPI and $MVI are the ideal index tokens through which we can invest in the DeFi and NFT/gaming spaces at large.
Sending inflation, investments and business fees earnings to the Splitter for redistribution creates a virtuous growth cycle for the ecosystem, can encourage adoption and benefits all stakeholders.
The Treasuries
As touched on earlier, the Splitter distributes the ETH earnings of EthOS every quarter to four Treasuries.
- 27% goes to the Dividend Farming Treasury
Holders of at least 5,000 $OS can farm this ETH by staking it in the OS-ETH liquidity pool on Uniswap v3. These dividends play a very important role for EthOS, adding an entirely new layer of incentives to bolster and improve its long-term health, rather than short-term speculation.
- 25% to the Investment Manager Treasury
The Investment Manager sells this ETH for five tokens, as described above.
- 40% to the Delegation Grants Treasury
All delegations that receive the staked support of $OS holders split this ETH as grant money, on a pro-rata basis, to spend on improving the EthOS ecosystem.
- 8% to the Main Treasury
This ETH is reserved for future emergencies and for boosting new features.
Governance
EthOS governance is built on top of a granular on-chain organization. This structure allows the team and $OS token holders to implement protocol updates and changes together in a secure way. At the same time, it allows $OS holders to make high-level financial decisions (such as changing the token’s annual inflation rate) independently from any team actions or decisions.
This is the ideal path to total decentralization, step by step. During this journey, we’ll gradually make the Root layer governance more and more complex until it can eventually be detached from the Governance Layer, and the protocol can go into a definitive “maintenance mode”. In maintenance mode, only certain Governance Layer financial decisions can be made, with no chance to update, make changes to or censor the protocol and its code.
- Root Layer Governance: Host and Token Holders
Changes at this level must be approved by both the host — in this case, us — and token holders — in this case, $OS holders; for example, updates to the structure of the Governance layer (the subDAO layer).
2) Governance Layer Governance: Token Holders Only
The second layer is the Governance layer. Here, token holders have exclusive governance rights, and can vote to make financial and economic decisions.
At this layer, the things that $OS holders can currently govern are subDAOs, the Treasuries as outlined above, and the following fees:
- % Inflation Rate
$OS holders can choose from the following inflation rates:
0.50% — 1% — 3% — 5% — 8% — 15%
We have set the initial inflation rate at 8%.
- % FoF Fee
$OS holders can choose from the following % FoF Fee rates:
0.03% — 0.08% — 0.30% — 0.80% — 1% — 3%
Initially, we have chosen the 0,08 % fee.
- Burn FoF Fees
$OS holders can choose from the following FoF Burn Fee rates:
0.03% — 0.08% — 0.30% — 0.80% — 1% — 3%
Initially, we have chosen the 0.08 % fee.
- % Farming Fee
$OS holders can choose from the following Farming Fee rates:
0.03% — 0.08% — 0.30% — 0.80% — 1% — 3%
Initially, we have chosen the 0.08 % fee.
- Farming $OS Burn Fee
$OS holders can choose from the following Farming $OS Burn Fee rates:
0.05 — 0.1 — 1 — 5 — 10 — 100
Initially, we have chosen 5 $OS for the fee.
- Factory Inflation Rate
$OS holders can choose from the following inflation rates:
0.03% — 0.08% — 0.30% — 0.80% — 1% — 3%
Initially, we have chosen the 0.08 % fee.
An Initial Boost For the Ecosystem
The three public treasuries that were governed by $BUIDL, $ARTE and $Unifi are being entirely reinvested within the new ecosystem, thus giving an immediate acceleration to the growth and development of all its components.
Those funds have been distributed as follows:
- 50 ETH to the Investment Fund
- USDC & All Other ERC20s to the Investment Fund
- 30 ETH (+30 ETH from our Private Treasury) to Delegation Grants
This will be split among 5 delegations. Two places are already occupied by the “Ethereans Community” and the “Cypher Party” Delegations. For the other 3, we invite people to make a pitch, and over the next two weeks we’ll fill them.
- 60 ETH to Dividend Farming
- 15 ETH (+15 ETH from our Private Treasury) to pay for the deployment of the EthOS protocol
- 45 ETH to the Routine Contract that sends 15 ETH, every 3 months, to the Splitter
- 145 ETH to the Main Wallet
This will be reserved for future emergencies and for boosting new features. Being at the Root Layer, this wallet is governed via Host + Token Holders.
Switch Your BUIDL, ARTE and UniFi for / Claim the New $OS
See you next Sunday.
