Purple Power
Note: All readers need to understand that everything written here or in other PhantomDAO Medium posts are just ideas of a collective group of many contributors. Everything is subject to change at the discretion of the community. This project is open-sourced with no central ownership or control. When we refer to “we”, “our” or any other plural or collective reference it means contributors together with the community. This is an ongoing experiment and everyone should perform their own risk assessment accordingly.
Summary
This article will detail the initial vote submitted to PhantomDAO, a vote to kick off a Dutch Auction process and launch the protocol. The Dutch Auction is a fair launch process which enables any participant to participate in Phantom by acquiring aPHM tokens. Participants will all bid an amount of FRAX to acquire aPHM, the ending aPHM price will be determined by the aPHM price at auction end and every participant will have effectively paid this price.
Auction end will be determined by either 76 hours from auction commencement or when the aPHM tokens sell out, whichever comes first.
If you do not have experience or feel comfortable interacting with a launch sequence like this, you should not participate.
The Vote
The first on-chain vote will take place on our governance page — hosted by Commonwealth.im. You can navigate to that page by going to this link. Please note: there seems to be a cosmetic bug with respect to time left on the Proposal, it will end in 172,800 blocks time (roughly 48 hours) from the time the Proposal was created.
Here you will see an on-chain vote which details the following:
Dutch Auction
- Mint 75,000 aPHM tokens for sale via Dutch Auction
Start at: Approval of on-chain vote (i.e. in 172,800 blocks time — roughly 48 hours after vote is made live)
Duration: 76 hours
Starting Price: 2,000 FRAX
Reserve Price: 50 FRAX
Liquidity
- Instantiate a PHM-FRAX liquidity pool at auction end using aPHM end price at conclusion of Dutch Auction.
- Use up to 15% of FRAX raised to instantiate liquidity pool (at Policy committee discretion what amount to use up to a maximum of 15% raised).
- Mint and assign an equal amount of PHM to assign to liquidity pool
Enhanced Features
After the Dutch Auction concludes successfully:
- Enable aPHM to PHM swap page on https://app.phantomdao.xyz/#/swap.
- Enable wrap/unwrap (sPHM<>gPHM) on https://app.phantomdao.xyz/#/wrap.
- Enable Staking on https://app.phantomdao.xyz/#/stake.
- Turn on bonding within Policy guidelines to be detailed in the on-chain vote.
- Remove lock on transfers of gPHM.
Committee Appointments
Approve the committee members as per the below screenshot:
Committee Powers
The community grants the following powers to committee members depending on which committee they sit on:
Policy Multisig — 3/5 to approve
- Adjust rewardRate for rebases.
- Create bonds and adjust bond vesting terms.
- Set debt limit.
- Rebalance treasury assets via DEXs.
Operations Multisig — 3/5 to approve
- Hire employees
- Withdraw funds from Ops DAO allocation to fund operations
Accelerator Multisig — 3/5 to approve
- Liquidate investments from accelerator
These powers are explained in more detail in the below screenshot:
Any changes needed outside of the above scope will require an on-chain governance vote.
How to Participate in the Dutch Auction
Assuming it passes the community vote…
PhantomDAO’s Dutch auction will be offering 75,000 aPHM (alpha Phantom) tokens for sale. These tokens will be exchangeable 1:1 for PHM (Phantom) tokens on launch. Participants will need to prepare canonical/native FRAX on the Fantom Opera Mainnet.
Canonical FRAX Contract: 0xdc301622e621166bd8e82f2ca0a26c13ad0be355
Here are the steps to participate in the aPHM Dutch auction:
1) Add Fantom Opera Mainnet to your wallet manager. For Metamask users:
https://docs.fantom.foundation/tutorials/set-up-metamask
2) Bridge assets over to the Fantom blockchain and convert them into canonical/native FRAX. The PhantomDAO Discord has a #bridging-faqs channel that provides general methods and #bridging-support channel for any further questions.
3) Connect your wallet to https://app.phantomdao.xyz/#/auction.
Do not trust any other website!
4) Submit a transaction to approve your FRAX spending limit. This is necessary to deposit the FRAX you are willing to commit to the auction later.
5) When the auction price reaches a level you find acceptable, feel free to commit your funds. If the transaction is successful, you are guaranteed a price equal or cheaper to the level you committed at. There is only the risk of paying over your desirable price if you bid early and the auction concludes at a level greater than your desired price. In contrast, you are at risk of not winning any tokens if the auction concludes at a price higher than your desired price and you did not commit any FRAX.
For example:
You submit 1,000 FRAX at the price of 500 FRAX/token, which entitles you to at least 2 aPHM tokens. The auction continues until a conclusion price of 200 FRAX is reached. Instead of receiving 2 aPHM tokens for 500 FRAX/token, you will receive 5 aPHM tokens for the price of 200 FRAX/token. In a Dutch auction, everyone who commits will end up paying the same price per token.
How Do Dutch Auctions Work?
In a Dutch auction, price decreases linearly until X/Y=Z or reserve price is met, where
X= Total FRAX contributed
Y= Price per token (decreasing linearly over time)
Z= # of tokens for sale
Phantom’s Dutch auction will be offering 75,000aPHM tokens.
The price will start at 2,000 FRAX/token and linearly descend until 1) all tokens are sold out and X/Y=Z is satisfied or 2) the reserve price of 50 FRAX/token is reached.
Dutch auction participants will commit their FRAX at a price level they are satisfied with and therefore increase X (total FRAX committed). Over time, Y (price per token) linearly decreases as new participants continue to commit their FRAX. This continues until an equilibrium in which X/Y=Z.
Here is a helpful video guide by the Algorand Foundation for those who prefer video learning: https://www.youtube.com/watch?v=0xlLgteeqQE
