Infinity Protocol

Fraser Brown - Degen VC
Apr 5 · 6 min read

Website and vault now live!

The problem with DeFi’s store-of-value economic experiments (Core, Axion, Safemoon, Lighting etc) is that they are all predicated on the same idea that their innovation represents the ultimate innovation. But only one thing holds true for innovation — innovation is always trumped by better innovation.

Infinity Protocol is predicated on the idea that innovation will always be surpassed with better innovation. It is designed to promote and leverage hyper-innovation.

Liquid Vaults are used alongside the INFINITY token smart contract to achieve Infinity Protocol’s hyper-innovation. To learn more about Liquid Vaults read Degen Lab’s material on the technology.

Token price

The fate of $INFINITY’s price and the imperative for ever improved Liquid Vault innovation are linked. Of course, the fate of other project’s token price is also tied to their particular innovation. The difference is that Infinity’s innovation can expand, well, infinitely.

The model has the capacity to continuously vampire attack all other fixed-innovation projects through its hyper-competitive framework over time.

Introducing Infinity Protocol

Infinity is the first project to bake in hyper-innovation; that is to say it fosters and can deploy innovative new ideas through embedded mechanisms on an ongoing basis.

How does it work?

  • Infinity token is a dynamic fee on transfer (FOT) deflationary token with 100 million total supply.
  • The FOT changes throughout cycles. We call each change a “jump”.
  • The starting dynamic FOT at the beginning of each cycle is 5%.
  • It autonomously increases (jumps) by 0.5% each time 1 million tokens have been transferred (transfers occur during trading of course).
  • When 14 million tokens have been transferred the FOT reaches its maximum of 12%.
  • 50% of the FOT tokens are burnt and 50% of the FOT tokens are sent to a Liquid Vault. (Each cycle 637,500 tokens are burnt and 637,500 are sent to a Liquid Vault).
  • When the quantum of Fee On Transfer tokens transferred reaches 1.275 million tokens a positive rebase expands the supply by 500,000.
  • Note that Liquid Vaults also include the capacity to burn tokens and therefore further increase the degree to which $INFINITY is deflationary.

Tokenomic summary

  • The initial total supply is 100 million tokens;
  • 50% of FOT tokens are burnt each cycle (0.6375% of initial total supply);
  • 50% of FOT tokens are sent to a Liquid Vault each cycle (0.6375% of initial total supply);
  • The rebase at the end of each cycle is 500,000, therefore, the amount of tokens burned “forever” each cycle is 137,500;
  • 40 million tokens will be distributed via Degen.VC #alphadrop;
  • 10 million tokens will be sent to the first liquid vault and 7 million tokens (35 million total) will be sent to each of the next 5 Liquid Vaults (and locked one teamlock beforehand);
  • 13 million tokens will be retained by Degen VC for bounties, innovation grants and prizes for Liquid Vault innovation, and audits of third party vault innovations.

Liquid Vaults

The community will plan to deploy a new Liquid Vault at the start of each new deflationary cycle. The owner of the Infinity token contract changes the contract address to which the FOT fees are sent. Once the protocol has a distributed-enough, working DAO this change will be implemented by vote. Before then it will use voting through Snapshot.

The first six liquid vaults are already designed and ready to deploy by Degen Labs. But here’s how hyper-innovation will work; There will be a permanent Gitcoin bounty for Liquid Vault innovation funded with ETH from Infinity’s Liquid Vaults. But that is not even the coolest part. Once the developer community understands what Infinity is about (80,000 developers will be invited to our projects through our Gitcoin hackathon), anyone can create a better Liquid Vault that hardcodes reward payments to them throughout the cycle that uses their vault. If the community agrees that the solution represents fair value and that they want to use it for the next cycle they can vote to point FOT revenues at that vault.

Here are details of the first six “infinity vaults”

Reality

The ETH Fee will be allocated entirely to finance advertising or innovation via the Github hackathon.

Space

A dual accelerator is used to incentive LP maximally. This was used on Options.Market and Unbox.Art.

Power

The ETH Fee is deployed as buy pressure

Soul

The ETH Fee will be allocated entirely to innovation financing through a Gitcoin Grant

Time

The LP lock period will be its lowest

Mind

LP donation (the amount of LP sent to the Ox address i.e. locked forever) will be sent at its highest.

Community votes on parameters

A governance-minimized approach creates a more predictable and efficient system. Active intervention by governance is not required because the mechanisms are autonomous and algorithmic rather than rigid and reliant on governance. A governance-minimized Infinity Protocol DAO will coordinate decisions on the following parameters:

  1. Liquid Vault address
  2. FOT amount
  3. Additional FOT amount to burn via Liquid Vault (500,000 token burn each cycle is hard coded)

Ownership of all parameters can be revoked meaning that if the community decided it was best for the protocol that a parameter was set permanently to a specific value this could be implemented.

Reference projects

Reference projects are useful in crypto to help traders consider the relative value of one concept over another.

Locked Liquidity

SafeMoon Protocol is a popular DeFi project with over $34mm in daily volume. It embeds automated liquidity pooling into the token contract by selling 50% of the fee on transfer and combining this with the other half to create a sink of permanently locked LP tokens. However, as a result of this it is designed with permanent sell pressure, the negative effect of which its community hopes will be offset by the benefits of locked LP. The other 50% of the FOT is burned.

In the INFINITY model, Liquid Vaults remove the sell pressure embedded in SafeMoon Protocol by attracting external liquidity through offering LP tokens at a discount instead.

This shift from Locked Liquidity to Protocol Controlled Locked Liquidity provides the community a powerful economic lever with which to defend token price and sustain the protocol.

Burn cycles

Two projects offer a direct reference for the Infinity premise:

  • Liqhtning Protocol
  • Thunderbolt

Infinity Protocol decided to implement similar parameters to the audited code of these projects.

These two projects are the same. The only difference is their name, marketing look & feel, how each is described, and the partnerships they have forged. Oh, and Lighting launched first. DeFi enjoys both; at the time of writing $LIGHT is trading at $0.27 and $BOLT at $0.02; thats a $27mm and $2m market cap respectively. Each aspires to become a store of value for the DeFi ecosystem.

Oddly, neither project makes it clear to their respective communities that their smart contracts permit the owner to change the FOT. There is no mention of community governance for this function either. This is the code that permits this:

Furthermore, this fact seem to be purposely obfuscated because the function name doesn’t do what it suggests. The function name is _setFeeStage, but it sets the _BURN_FEE variable which controls the amount of % that is burned in every transaction.

Infinity Protocol keeps this function and highlights both that it exists and that it will be community governed.

For Infinity to become exactly the same as Lightning or Thunderbolt it would simply burn more of the FOT via a Liquid Vault. As mentioned in the governance section, Infinity Protocol can remove the owner access to FOT changes whereas Lightning and Thunderbolt seemingly cannot.

Launch

Infinity proposes to launch on Ethereum and then Binance Chain with a 40% alphadrop to the DGVC LP for each. They will be separate tokens entirely.

Infinity

A deflationary token on BSC with positive rebase and hyper-innovation baked in.