Roadmap and Monthly Update [December 2021]

The past month was filled to the brim with exciting developments for Pylon Protocol.

Pylon Gateway, Terra’s premier launchpad and Pylon’s flagship platform, topped $250M in total value locked (USD) alone, generating substantial yields for project teams while providing users with project tokens at massive discounts from market prices.

From introducing the latest TeFi innovations with DP tokens and Liquid Pylon Pools that form the basis for “Pylon Funds” and DAO membership tokens, to bringing alive the promised linear retrospective airdrops for MINE stakers, all the way to launching Pylon Governance and Pylon Forum which have flooded with community engagement and new project launch proposals, Pylon has been picking up its momentum.

This article aims to sum up the latest protocol updates and provide reasons for users to continue engaging with the burgeoning Pylon ecosystem especially in the new calendar year.

Establishing the Pylon Treasury

One of the most important pivots for the protocol has been the establishment of a robust community fund governed by MINE stakers to capture more value over time.

Building on previous community posts, the forum post “Establishing the Pylon Treasury” called for changes two-fold:

1. the redirection of yields accrued across all Pylon-integrated platforms to the Pylon Treasury
2. the redirection of all further weekly MINE airdrops for LUNA stakers to the Pylon Treasury

To date, weekly buybacks have amounted to over 12 million MINE being distributed to governance stakers. The vote for this proposal passed, resulting in the temporary halt of weekly MINE buybacks and the permanent halt of weekly MINE airdrops for LUNA stakers. Yields generated from Pylon Gateway have so far been accumulating in the Pylon Treasury.

Instead of all yields going towards token buybacks and redistribution to stakers (as was the previous model), a follow-up community poll set up an initial distribution for the treasury, which will come into effect starting early next year:

1. 25% for weekly MINE buybacks to be redistributed to governance stakers
2. 25% for providing additional liquidity to the MINE-UST pair, with LP rewards being redistributed to stakers
3. 50% being stored as aUST in Anchor Protocol, with storage and use cases for the UST being governed by stakers

Via decentralized governance and subsequence polls, MINE stakers can further decide what to do with the resulting MINE and UST in the Pylon Treasury, including but not limited to: modification of above parameters, periodic token buybacks for distribution or burn, initial protocol-owned liquidity for important pairs, community grants and Pylon hackathons.

This represents the protocol’s significant stride towards sustainability.

Launching Terra’s Latest Protocols via Pylon Pools

A flurry of protocols have launched since the last monthly update via the standard Pylon Pools, including Orion Money, White Whale, Glow Yield, Sayve Protocol, and XDEFI Wallet. Many of the projects decided to implement MINE staking entry requirements.

The latest NFT Raffle Pool to launch was Deviants’ Factions, with Luna Bulls, TerraBots, and Terra Movie Club passing the governance vote to launch early next year.

All new projects aiming to collaborate with or launch on Pylon Gateway can submit a Pylon Forum post referencing “For Projects Submitting Applications.”

After receiving sufficient community feedback, projects can then submit a governance poll on the Pylon WebApp with more details about exclusive benefits for MINE stakers, such as MINE airdrops or MINE staking requirements for entry into Pylon Pools.

Innovating on Liquid Pylon Pools and DP tokens

Pylon Gateway introduced the first Liquid Pylon Pool option for the launch of Nexus Protocol’s Liquid Pylon Pools for $Psi, which allows users to trade their locked UST positions with Deposit Provider (DP) tokens that represent their stake in each Pylon Pool.

This introduces a new era of capital efficiency to Pylon Pools, by allowing users to exit their lockup positions at any point in time given sufficient liquidity, earn extra APR by providing liquidity to the DP token — project token pair, and/or engage in new arbitrage opportunities. All the while, the underlying UST is redeemable using the DP token upon lockup pool expiry.

The liquid Pylon Pool and DP token mechanism form the building blocks for DAO membership tokens backed by a yield-accruing treasury (see below).

Introducing “Pylon Funds” and “DP Membership Tokens for DAOs”

With the launch of important foundations such as the retrospective and real-time linear airdrops that reward long-term MINE stakers based on amount and duration of MINE staked in addition to Liquid Pylon Pools and DP tokens, these innovations lay the groundwork for the emergence of “Pylon Funds.”

In short, Pylon Funds are sustainable yield-based treasuries built upon a new asset class of DAO membership tokens (DP tokens).

DP tokens here represent the underlying locked UST that is redeemable upon lockup expiry on top of the value add of each distinct Pylon Fund, whether that be linear pro rata token distribution, retrospective airdrops, governance, ownership over fractionalized NFTs, and so forth.

Starting with “Gateway Fund I” (see below), a number of new special interest DAOs are planning to launch in the new year via Pylon Funds on Pylon Gateway, which offers a yield-based treasury that allows users to deposit UST and mint a particular DP token by burning MINE.

Imagine a Pylon Fund for the following use cases: venture DAOs, lottery DAOs, NFT art collective DAOs, developer and marketing DAOs, cultural DAOs, K-Pop fandom DAOs, Dungeons and Dragons DAOs, and so forth.

For instance, the proposed Pylon Fund for GT Capital, a community-formed venture DAO, may have a capped supply of DP tokens $GOBLIN available for minting when users burn MINE and deposit UST. The GOBLIN token will be backed by the value of the yield-generating locked UST (redeemable post-lockup) on top of any other additional value that the GT collective brings, whether that be project token airdrops from part of their deal flow or unique NFT collections.

Any community with a vision and shared passion can submit a proposal on the Pylon Forum to launch a Pylon Fund, all the way from investors steeped into early stage project deals, hobbyists who just want to collect and share rare artifacts, fans who want to bond together in supporting an artist or a music collective, or lobbyists who want to form yield-backed treasuries in a constant political push for the rapidly expanding web3 community.

With this move, Pylon Gateway aims to reposition itself as a fund of funds.

Pivoting from Pylon Swaps to Treasury Swaps via Gateway Fund I

Another monumental governance proposal that passed is the establishment of a yield-based community fund for Pylon Gateway governed by MINE governance stakers.

Detailed in a thorough Pylon Forum post, “Gateway Fund I” would be the first instantiation of a “Pylon Fund” on Gateway, focusing on funding early stage projects via collective treasury swaps backed by depositor yields.

Inspired by the design of Pylon Pools, Gateway Fund I allows user deposits to be preserved in full, while yields generated from the underlying principal are pooled into the fund to swap for project tokens in the future, to be distributed retrospectively.

Users can burn MINE to deposit UST at a fixed ratio and receive the DP token $GFI in return, which by holding the token, users will receive retrospective linear airdrops pro rata to amount and duration held.

Upon the success of Gateway Fund I, Gateway Fund II will allow for dollar cost averaging of popular Terra assets at market prices and for late-stage projects.

Partnering with Other Protocols on Terra and Beyond

Here are some of the latest partnerships and collaborations with Pylon Protocol to look forward to:

• Glow Yield to co-develop and ship extensive yield-based DeFi products quickly, including Glow Creators, which enables content creators to build their own token-based community and social tokens without taking money away from their fans. MINE stakers will receive linear GLOW token airdrops upon token launch.
• Olympus Pro to pivot from liquidity mining incentives and rented liquidity via launching protocol-owned liquidity bonds for the MINE-UST pair.
• Valkyrie Protocol to release the first partner share to earn campaign, providing an opportunity for new users to learn about Pylon Pools.
• Spectrum Protocol to allow for Liquid Pylon Pool vaults.
• Prism to allow projects to accept Pylon Pool deposits that redirect LUNA in place of UST.
• Astroport to incentivize MINE-UST liquidity with ASTRO tokens. 3M ASTRO tokens for MINE-UST LP providers were allocated for the initial Lockdrop.
• TerraFloki to distribute a one-time airdrop for MINE stakers.

Some of the latest community-led initiatives include Pylon Board, an analytics dashboard that tracks the latest data insights on MINE staking and wallet distributions on Pylon Gateway.

Revitalizing MINE Tokenomics and Utility

As Pylon’s native governance and utility token, MINE has been rapidly expanding its use cases and build on its value add for governance stakers.

Governance

The most prominent benefit for MINE staking is participation in network governance, allowing MINE stakers on the Pylon WebApp to make important deliberations on the latest project launches, protocol parameters, treasury distribution, community grants, and more.

One of the latest upvoted governance polls that is awaiting implementation is the launch of a 14-day undelegation period for MINE governance stakers, aiming to reduce day-to-day price volatility and fluctuations while incentivizing long-term governance and constant engagement in polls.

Linear Airdrops

The launch of retrospective and linear airdrops have allowed MINE stakers from Day 1 to claim their share of various project tokens, which have so far included LOOP (one-time), VKR, Psi, and TWD. Users can stake MINE today to farm project tokens per block.

More exclusive project airdrops are upcoming as more projects launch on Pylon Gateway. Stakers may also receive a random NFT raffle drop from projects that launch via NFT Raffle Pools on Gateway.

Pylon Pool Entries

Projects launching on Gateway are encouraged to include additional MINE staking requirements for entry into Pylon Pools. So far projects including Orion Money, Glow Yield, and XDEFI Wallet, have added on MINE staking requirements in increments of 1k, 5k, and 10k MINE.

Token Buybacks

Instead of weekly MINE buybacks taking up the entirety of accumulated yields, 25% of yields accrued on Pylon Gateway will accrue as weekly MINE buybacks for distribution to stakers (automatically restaked). Keep an eye out for the implementation of this proposal soon.

MINE Burn from Pylon Funds

The latest innovation proposed by Pylon Funds will add on a deflationary pressure to MINE via the stringent entry requirement wherein all whitelisted DAOs launching pools and DP tokens on Pylon Gateway must burn MINE, a requirement that scales proportionally with fund growth. In order to deposit into Pylon Funds, users must burn MINE permanently.

Community Hackathon

Next year, Pylon will be hosting its own community hackathon with MINE prizes to expand MINE token utility across various platforms, welcome new DAOs via Pylon Funds on Gateway, and encourage third-party projects to build on top of the Pylon SDK for yield redirection.

If you have an idea on how you could build a product or a DAO that can build on Pylon yield redirection, please reach out to us on Twitter and keep constructing additional pylons…

Tracing Our Next Steps

Join Pylon Protocol’s Telegram and follow @pylon_protocol on Twitter to keep up with the latest updates.