Utility of Rowan: The Polyvalent Token for Omni-Chain Decentralized Exchange (DEX)
How You Can Use Sifchain’s Native Crypto-Currency
* Note: The official token sale start date is Friday, February 19, 5:00 AM GMT. The official token sale end date is Friday, February 26, 6:00 AM GMT. The official token sale page is https://purchase.sifchain.finance/ and it’s the only official page for registered participants to purchase eRowan. This announcement is effective February 17, 2021.
On 3 February 2021, Sifchain launches its omni-chain DEX, enabling true cross-chain value exchange with infinite scale. The BetaNet release brings to production the first Ethereum <> Cosmos network bridge and it will support many more blockchains in the future. Rowan is the native token of Sifchain and its architects formulated incentives for early investors to participate. Read on to learn how you can use Rowan and become a governing member of SifDAO (decentralized autonomous organization).
Stake
Requires Operating a Validator
Check out this article about setting up your own validator in just 30 minutes! It’s a great way to earn passive income. You’ll find information about setup costs, recommended technical specifications, storage guidelines, and other useful information.
Validators provide crypto-economic security and they must stake Rowan in order to do so. Traders can trust that Sifchain’s blockchain data is accurate because its validators forfeit their staked Rowan as per the Tendermint Proof of Stake Consensus Algorithm if they produce incorrect blocks.
Validator income fluctuates between 10~30% annual percentage rate (APR), with the capacity to go as high as 100% if there is high traffic in the network.
Validators earn block rewards directly in most blockchains. In Sifchain, they earn validator income derived from block rewards, rebalanced to include liquidity pool rewards.
Each validator has a Sifchain wallet address. Rowan at this address is used as staked capital. The more Rowan in the address, the more validator income the validator earns. When validators stake Rowan, it becomes bonded to the network and cannot be transferred to any other wallet. To un-stake this capital, a validator needs to go through a 21 day un-bonding period. During this un-bonding period, the Rowan cannot earn validator income but is still subject to slashing for proposing invalid blocks.
Commission Fees
Requires Operating a Validator
Validators can earn commission fees by attracting delegators. Delegators are members interested in earning revenue from staking but who cannot run a validator themselves. Instead, they delegate Rowan to validators who can stake on their behalf.
Validators set their own commission fee based on their business model. An active validator interested in funding independent projects for Sifchain will often set a higher commission fee. A passive validator primarily interested in earning validator income will usually set a low commission fee. Even passive validators should set a commission fee above 0% based on the costs they incur. All validators should publicize their contributions to Sifchain on a regular basis (we suggest monthly) so that delegators understand how commission fees are used to improve the protocol.
Delegate
To support Rowan’s crypto-economic security without running your own validator, simply delegate your capital to a validator. Delegators earn validator rewards, minus a commission rate retained by the validator.
The commission fee is used by the validator to sponsor technical improvements for Sifchain. Validators are encouraged to offer reports about their contributions to Sifchain’s technical infrastructure. Delegators are encouraged to select validators based on their ability to support Sifchain’s technology innovations.
Swap
Sifchain simply would not work without token swapping. Users can swap any asset on any bridged chain (like Ethereum) for any assets. Rowan is the settlement token for all of Sifchain’s liquidity pools. Therefore, all liquidity pools contain an external asset like ETH or MKR and Rowan. Swaps between two external assets require two swaps against two liquidity pools. Traders can thus save on swap fees by denominating their holdings in Rowan as a sign of long term faith in the Sifchain project.
Users can swap for any number of reasons. Users may want to switch between tokens that have different utility, for example, switching from a social token supporting their favorite artist to a decentralized finance (DeFi) token expected to accrue value to a stable coin used to for fiat tax obligations. They may want to swap in order to take advantage of arbitrage opportunities. They may want to execute a momentum trading strategy based on their expectations about the future price of one or more tokens. They may want to diversify their portfolio to consist of multiple assets, thus reducing risk of loss.
Sifchain targets all relevant use cases for token swapping.
Pooler Liquidity Mining Rewards
Sifchain will run a 12 week validator subsidy program for poolers, in order to incentivize early adopters. Rewards are subject to change based on evaluations of the network from the Sifchain core team, community feedback, and governance over time.
In the future, we expect that the community of SifDAO (Decentralized Autonomous Organization) will implement specialized distribution methods (e.g. targeting specific pools, changing the rate of validator subsidy rewards offered for specific initiatives, adjustments based on target market depth and/or trade volume).
The validator subsidy rewards below are influenced by Sifchain’s rebalancing policy for validator and liquidity provider subsystems. As such, the relative income between subsystems is subject to change.
How do you earn pooler rewards?
Edit: We’ve simplified to use Ampleforth’s Token Geyser model! Check for more details here
Validator Subsidy Rewards
Sifchain will run a 12 week subsidy program for validators to incentivize early adoption. Rewards are subject to change based on evaluations of the network from the Sifchain core team, community feedback, and governance over time.
We will offer all validators up to 30 million additional Rowan in rewards, proportional to the amount of Rowan they bond to the network. For each week:
How do you earn validator rewards?
- Bond your Rowan.
- At the end of the reward week, collect your validator rewards as calculated above.
Validator subsidy rewards are offered to keep the validator subsystem balanced with the liquidity provider subsystem. The actual amount of validator subsidy rewards will vary each week depending on the liquidity provider (pooler) validator subsidy rewards.
More Rewards…
Validator Subsidy Targeted to Communities
During our validator subsidy program, Sifchain will ensure that specific communities become aware of this opportunity. As such, trading competitions will be conducted for select existing communities with Rowan prize pools. Stay tuned for more details and let us know if we should consider your trading group for our competition by writing to us.
SifDAO Rewards
Sifchain will use $ROWAN as a community reward token for social mining at the discretion of SifDAO, which will start to operate after the public token sale. We will open discussions with the community for how best to operate SifDAO.
Regarding Validator Income and Liquidity Pooler Income Rebalancing…
As per this diagram, validator income and liquidity pooler income (for Rowan providers) are rebalanced so that they are always equal.
