Phantasma X Dafi

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PhantasticPhantasma

3 min readFeb 26, 2021

Dear SOULdiers,

Dafi partners with Phantasma to offer Phantasma network-pegged synthetic tokens. For those new to synthetics, these are tokens pegged to the original asset, such as a dSOUL token pegged to the value of the original SOUL token. Dafi aims to solve issues related to inflation in decentralized economies through use of synthetic assets and distributed bounty mechanics with rolling pegs between synthetic and original assets.

Synthetic rolling pegged… what?

We realize that these concepts will be unfamiliar to many, and may appear utterly incomprehensible for some. However, it is possible to explain the concept in less complex terms.

Imagine that Phantasma planned to reward SOULdiers from a pool of 1,000,000 SOUL for various reasons including content creation, bounties, development contributions and more. If this amount of tokens were to hit the market within a short amount of time, the effect would highly likely be undesirable.

Now, imagine that we create a dSOUL token and deploy a mechanism that uses oracle data such as network traffic, trading volumes, token values and more to determine the demand for SOUL at any moment in time. This mechanism then determines a dSOUL:SOUL peg that changes based on perceived SOUL demand. What does this accomplish?

Supply and demand shake hands

This would allow us to automatically set a lower peg during periods of reduced demand, for example 1:2, where users exchanging their dSOUL for SOUL would receive for example 50% less SOUL in return for their synthetic version. However, in a high demand scenario (massive trading volume, high network traffic and so forth) the peg could automatically be adjusted to for example to 2:1, rewarding users with native SOUL at a time where the token economy was optimally equipped to handle the influx of tokens.

All of this would be algorithm based and fed by oracle data without requiring manual intervention or interpretation after the initial setup defining its controlling parameters. Users earn rewards, and they can extract the maximum amount of tokens from their rewards by doing so during periods of high demand, while minimizing the potential negative impact during periods of low demand.

Exploring opportunities

Dafi offers the opportunity to create a SOUL / KCAL dToken, pegged to Phantasma’s native SOUL and KCAL. Through this collaboration, Phantasma will explore the implications of creating a network-pegged synthetic token on the Dafi protocol. If implemented, these dSOUL or dKCAL tokens would be created in a reduced quantity and pegged to the demand of the Phantasma network — naturally without any changes to Phantasma’s sustainable low inflation mechanics.

Exploring the Future,

Your Phantasma Team