Introducing VenomDAO & Viper Protocol — a cross-chain, multi-product DeFi DAO launching on Harmony

VenomDAO
VenomDAO
Mar 8 · 16 min read

Hello frens and fellow farmers — today we’re thrilled to announce the initial launch of Viper Protocol, our governance token Viper (VIPER) and our first DeFi product ViperSwap — all launching right now on Harmony.

TLDR;

  • A community-driven, fair launched initiative — no presales, seed rounds or unfair allocations to early investors or backers.
  • Introducing VenomDAO — a cross-chain, multi-product DeFi DAO launching Viper Protocol as its first protocol on Harmony.
  • ViperSwap — A Uniswap V2-style DEX with a flair of Sushiswap & powerful revenue accrual mechanisms for VIPER token stakers in the IL-free ViperPit.
  • Viper token (VIPER)—a revenue generating governance token governing the Viper Protocol ecosystem on Harmony.
  • Yield farming on Harmony —stake ONE/BUSD or ONE/VIPER (+more upcoming pools) and earn extremely lucrative rewards for being an early supporter. The yield farming system incorporates a unique 95% locked / 5% unlocked token supply design to create a sustainable and long-term farming environment.
  • Rewards start at block 10183471 / at roughly ~2PM UTC 8th of March 2021 — farm responsibly!
  • ViperSwap only supports MetaMask — learn how to configure MetaMask to connect to Harmony Mainnet and how to yield farm VIPER here.
  • Join our Telegram channel to stay up to date to the latest developments

ViperSwap

The first product we launch as a part of Viper Protocol on Harmony is ViperSwap, a Uniswap V2 and Sushiswap-style DEX mixed with Bao.finance’s token emission model (more details on this later).

Unlike Uniswap fee sharing is enabled from the very beginning, and at a more attractive rate. VIPER holders are able to stake their VIPER tokens in the ViperPit and earn 1/3rd of all generated trading fees across all pools on the DEX. Compare this to Uniswap (when fee sharing will finally be enabled) and SushiSwap were UNI and SUSHI tokens holders only earn 1/6th of the trading fees.

The ViperPit’s best pal — the PitBreeder — will routinely market buy VIPER tokens using earned LP fees and reward the proceeds to everyone staking in the ViperPit. And not only that — there’s absolutely no risk of impermanent losses staking in the ViperPit.

The mechanisms outlined above will turn VIPER into a revenue generating token and not only a token used for governance.

The Viper (VIPER) token

The core foundation of the Viper Protocol is the Viper (ticker: VIPER) token.

It is aimed to be fairly and widely distributed, with focus on rewarding early and active supporters of the protocol.

VIPER and its role in the VenomDAO ecosystem

We will eventually launch VenomDAO which will be the governance system controlling all the respective ecosystems deployed on all chains we’re active on.

VIPER will serve as the governance token for all of the protocols and products that are launched on Harmony. At a later stage during 2021/early 2022 the VenomDAO will be introduced which will serve as the overseeing governance for all of the ecosystems, protocols and products that have been deployed on multiple blockchains.

VIPER can be viewed as having voting rights in a local election (Harmony) but also in a national election (VenomDAO). VIPER will carry more voting power on Harmony/in the Viper Protocol compared to the VenomDAO which will include governance votes from all chains and ecosystems.

Hard cap

The VIPER token has a hard cap of 500,000,000 tokens and features an extensive lockup model where 95% of earned tokens will be released at a later stage in the future and 5% will be available directly.

This model is intended to disincentivize heavy farming and selling pressure by participants who aren’t committed for the long-term sustainability of the protocol.

The token lockup mechanism is forked from Bao.finance with some slight improvements and modifications.

The Viper token will be configured to lock 95% of all newly minted supply during the yield farming stage until 00:00:00 UTC December 25th, 2021.

When 00:00:00 UTC December 25th 2021 has been reached the locked supply will slowly start to unlock on a block-per-block basis until 00:00:00 UTC December 25th, 2022.

By the end of 2022 roughly 290.87 million VIPER tokens are expected to have been minted. At the end of 2023 the supply is expected to reach 460.70 million VIPER and the final 500 million cap is expected to be reached at the beginning of March 2024. From start to finish it’ll take roughly 3 years in total to reach the cap. We’re planning on publishing a detailed token emission schedule in our upcoming Gitbook documentation detailing the emission, detailed figures for locked/unlocked token ratios and much more — so stay tuned!

For comparison’s sake, VIPER’s supply will be 0.5x of Uniswap’s and 2x of Sushiswap’s. It’s worthwhile to mention that the VIPER token will be the governance token for the entire Viper Protocol and all of the products that will be introduced — not only for ViperSwap.

We’re already planning the next set of products, and future use cases of the VIPER token might include burning VIPER as collateral for synthetic asset collateralization or for e.g. burning VIPER as an incentive mechanism for maintaining an algorithmic stable coin’s peg at $1.

We’re still exploring ideas — but we’re very confident that the 95%/5% lockup system and future token use cases will lead to tokenomics featuring a reasonable cap, circulation and emission schedule.

Treasury

The lifeblood of a DAO is its treasury and we’ve carefully designed the token emission schedule to reward certain percentages of newly minted tokens to be allocated to three distinctive treasuries:

  • The development treasury6% of tokens being minted, will be used for developer grants, bounties and funding the technical advancement of the protocol. The development treasury has a 75% locked / 25% unlocked setup.
  • The community treasury 6% of tokens being minted, will be used for marketing initiatives, hiring community managers and fostering the Viper Protocol community. The community treasury has a 85% locked / 15% unlocked setup.
  • The liquidity provider treasury4% of tokens being minted, will be used to provide liquidity for multiple trading pools on the ViperSwap DEX. The liquidity provider treasury has a 45% locked / 55% unlocked setup.

The DAO will eventually be fully owned by the Viper Protocol community and actively governed to decide on resource allocation. Initially the founding team will allocate the treasury resources but our goal is to get started with the transitioning process as soon as we see that a strong community has been formed.

Besides the treasury allocation there’s also a built in founders reward of 4% — this is to ensure the long-term commitment of the founding team. The founder’s reward is configured using a 95% locked / 5% unlocked setup, just like the regular farming.

In total there will be a 16% treasury allocation and a 4% founder’s allocation, resulting in a total of 20% protocol fees being generated and allocated to the treasuries.

Note that ALL of the fees are also locked using the exact same emission schedule as previously discussed — the treasuries will be locked until 00:00:00 UTC December 25th, 2021 and it will then take a full year (until 00:00:00 UTC December 25th, 2022) to fully unlock them.

Pre-minting

Due to the treasuries following the exact same locked emission schedule as regular users we’ve decided to pre-mint a total of 10,000,000 VIPER, or 2% of the expected final hard cap.

This is done in order to let the founding team and the initial treasury to start with developer bounties/grants and community marketing initiatives as soon as the protocol has been launched.

We’re planning to reward 5,000,000 of these 10,000,000 tokens (i.e. a total 1% of the supply) as an airdrop to protocol participants of Uniswap, Sushiswap, Bao.finance, PancakeSwap and similar DEX:es and DeFi protocols. Due to time restrictions leading up to the launch of ViperProtocol the airdrop will take place at a later stage.

The 10,000,000 VIPER tokens will be distributed as follows:

  • 5,000,000 VIPER: Airdrop to Uniswap, Sushiswap, Bao.finance, PancakeSwap etc. traders/LP:s
  • 2,000,000 VIPER: Allocated to the developer fund. First order of business will be to reward developers who fork e.g. VFAT or create other APY tools for the protocol.
  • 2,000,000 VIPER: Allocated to the liquidity provider (LP) fund. The first action will be to seed initial liquidity for the VIPER/ONE pool.
  • 1,000,000 VIPER: Allocated to the community fund. Will be used for bounties for creating documentation for the protocol as well as community management. We’ll be actively looking for one or several community managers to actively manage the community so that we can focus on building more awesome DeFi products.

Besides these 10,000,000 VIPER there are no intentions to further mint tokens outside the scope of our yield farming contracts/token emission schedule. Our deployment setup has been configured to transfer the ownership of the VIPER token over to our yield farming/token emission contract (MasterBreeder) as soon as the tokens have been minted. We’ll discuss this in more detail in the “Smart Contracts” section.

Yield Farming

The launch of ViperSwap also introduces the launch of Viper Protocol’s yield farming initiative.

The goals of ViperSwap’s yield farming initiative:

  • Guarantee a fair distribution
  • Guarantee a wide distribution
  • Guarantee a sustainable distribution
  • Heavily reward early AND long-term supporters of the protocol

Emission rates

The base emission rate of VIPER will be 1 VIPER per block, which on Harmony (with 2 second block times) means a total of 30 VIPERs per minute.

During the initial stages of the liquidity farming we’ll have EXTREMELY lucrative bonuses to reward our early supporters.

Here’s a short breakdown of the first month’s bonus multipliers:

  • Week 1: 256x multiplier = 256 VIPER/block = 7,680 VIPER/minute
  • Week 2: 128x multiplier = 128 VIPER/block = 3,840 VIPER/minute
  • Week 3: 64x multiplier = 64 VIPER/block = 1,920 VIPER/minute
  • Week 4: 32x multiplier = 32 VIPER/block = 960 VIPER/minute

We will publish the full list of multipliers in our Gitbook documentation — we’ll update this article and link to it here when that has been done.

The reason we can go crazy with these multipliers is because of the 95% locked / 5% unlocked token supply locking system. We truly want to reward our initial supporters massively — while simultaneously making sure we don’t rekt the token while doing so. The long lockup time periods will also give us plenty of time to invent deflationary protocols and measures to combat the initial inflationary minting process. Rewards earned via yield farming today will only fully 100% unlock after 1 year, 9 months and 18 days on Christmas Day ~00:00:00 UTC 2022.

Pools

ViperSwap will launch with two pools that will reward yield farmers with VIPER:

  • ONE/BUSD — 1x pool weight (~9.85 VIPER/block during the initial launch week).
  • ONE/VIPER — 25x pool weight (~246.1 VIPER/block during the initial launch week).

ONE/BUSD is currently the most liquid DEX pair on Harmony across Swoop, SeeSwap and UniFi. The liquidity is still abysmal so instead of using e.g. ONE/1USDT (bridged USDT) or ONE/1USDC (bridged USDC) we decided to stick with BUSD since it seems to be the most used stablecoin on Harmony.

ONE/VIPER will be our “pool 2” — which will carry the most rewards, but also the highest risk for impermanent losses (IL). The initial farming rewards will most likely hugely offset IL risks, but we recommend farmers to truly educate themselves regarding the various risks involved with yield farming.

Deposit and withdrawal fees

To further disincentivize “drive-by” farming & dumping (which seems to be the fate of so, so many farms lately — especially on BSC) we’ve also added deposit fees and withdrawal fees to the liquidity farming system.

Deposits

Whenever a user deposits a LP token to one of the yield farming pools 0.75% of the deposited amount will be collected as a fee to the treasury.

Withdrawals

For withdrawals we’re using a slightly more complex system:

  • 1% fee if a user withdraws under 5 days.
  • 2% fee if a user withdraws under 3 days.
  • 4% fee if a user withdraws under 24 hours.
  • 8% fee if a user withdraws under 1 hour.
  • 25% slashing fee if a user withdraws during the same block (in order to disincentivize the use of flash loans). There are no flash loan primitives on Harmony right now — but there might be in the future.

These fees will be rewarded to the treasury and it’ll be up to the DAO to decide what to do with them.

The goal with this system is to attract loyal & long-term supporters of the protocol while disincentivizing whales just intending to stop by for a quick little farming session and dump the token into oblivion (we’ve seen this happen to so many farms already…)

The ROI earned from participating in the yield farming pools (especially the first few weeks) will quite easily offset the initial deposit fees.

Additional features

MasterBreeder has a built in referral system (a positive side-effect forking BaoMasterFarmer) that won’t be enabled straight away when ViperSwap launches.

The referral system doesn’t automatically pay out rewards but will simply track a referral score for each participating user in the protocol.

It will then be up to the DAO to decide if referrers should be rewarded, and in what manner.

If there’s a massive interest from the community to launch the referral system ASAP we’ll reprioritize it and implement the remaining required UI + code integrations that’ll be required.

Liquidity

Given that we’re bootstrapping an entirely new DEX from scratch it might take a while to build up a decent amount of liquidity to provide a seamless trading experience.

The founding team will commit ~$5-10k worth of ONE to the ONE/VIPER pool to allow for users to easily swap to VIPER in order to enter the ONE/VIPER liquidity farm.

Depending on the outcome of the launch we might also provide~$5-10k initial liquidity for the ONE/BUSD pool.

Swoop, SeeSwap and Unifi have some limited liquidity that can be used to swap ONE -> BUSD in order to enter the ONE/BUSD liquidity farming pool on ViperSwap. Harmony’s Horizon Bridge will also allow users to move BUSD liquidity from Ethereum over to Harmony.

The VIPER/ONE pool on ViperSwap will initially be seeded with a price of $0.005 per VIPER. That means that the first week’s market cap (10,000,000 VIPER pre-mint + 4,644,864 unlocked VIPER rewards) will be roughly ~$73,000.

Smart Contracts

Our smart contracts are based on a mix of contracts from:

  • Uniswap V2: UniswapV2Factory.sol, UniswapV2Router02.sol and supporting contracts and libraries.
  • Sushiswap: SushiBar.sol and SushiMaker.sol.
  • Bao Finance: BaoToken.sol and BaoMasterFarmer.sol.

These contracts have been used by thousands of people and have been thoroughly battle-tested. Some of them have been audited multiple times. But with that said — farming always comes with implied smart contract risk — so farm responsibly!

Uniswap V2

The Uniswap V2 contracts have mostly been left intact — token names/symbols have been changed, init code hash has been updated and we increased the rewarded LP fees to token stakers from 1/6th to 1/3rd. Besides that nearly everything else has been left intact.

Github:

Sushiswap

SushiBar.sol (Pit.sol in our implementation) and SushiMaker.sol (PitBreeder.sol in our implementation) make up the revenue and fee accrual system of the ViperSwap DEX. Contracts only been modified to change the contract naming and names of tokens.

Github:

MasterBreeder

Based on Bao.finance’s BaoMasterFarmer contract we’ve created the MasterBreeder — a sophisticated herpetologist and viper breeder. He’ll breed cute little VIPERs all day but he’s also very mindful of not flooding the apes over in the next cage at the zoo with a gazillion screaming viper babies. He’ll keep most of the cute little guys locked up for a while so that they don’t wreak havoc in the zoo.

The MasterBreeder is also not a fan of persian rugs, so he decided to entirely skip the migrator that has resulted in the demise of so, so many good-hearted and unsuspecting apes.

Ok, back to reality.

Compared to a typical MasterChef contract MasterBreeder is extremely versatile. While a MasterChef contract typically launches with a single bonus period and then moves over to a single block multiplier for the remainder of the protocol’s existence, the MasterBreeder is highly adjustable and can be configured to support highly customized emission schedules.

Not only that — this schedule can also be changed if the DAO vote to do so. Nearly everything from base emission rates, to multipliers, to block ranges for when multipliers are active, to treasury fees and deposit & withdrawal fees can be configured. Credit should be given where credit is due — this is not something we designed ourselves — the large majority of this is the creation of BaoMan, the mastermind behind Bao Finance. Kudos sir 👏!

Notable differences between MasterBreeder and Bao Finance’s BaoMasterFarmer and Sushiswap’s MasterChef:

  • MasterBreeder has no migrator — we have no use for it and the migrator has caused so much pain and misery among farming apes that we don’t want anything to do with it. We removed this from the original BaoMasterFarmer contract.
  • MasterBreeder implements some of the suggested fixes recommended by Certik and PeckShield in the original SushiSwap audits. Neither BaoMasterFarmer or MasterChef have these fixes. The fixes mainly pertain to protecting against reentrancy attacks and pool duplication bugs.
  • Just like BaoMasterFarmer MasterBreeder features an extra Authorizable subsystem that allows an authorized user to reclaim the token ownership back from the BaoMasterFarmer/MasterBreeder contract.
    This is not standard practice compared to e.g. Sushiswap forks which typically transfer the ownership of the token to the MasterChef contract and thus prevents an external party from ever minting tokens ever again. We are not a simple SushiSwap fork — we’re aiming to build a multi-product cross-chain ecosystem where the DEX and its yield farming component is just merely one component.
    We want to have the opportunity to reclaim the ownership of the token if the DAO choses to integrate the token with other products (e.g. lending/borrowing protocols, synthetic assets and so on). We will mitigate this issue by introducing 48 hour timelock contracts for all owners and authorizable access points in the system.

Github:

Summary of smart contract risks

Yield farming on ViperSwap isn’t risk-free — there’s always an implicit risk associated with interacting with smart contracts.

While the core DEX codebase has been forked from already established & audited DeFi behemoths such as Uniswap and Sushiswap, there’s always a risk that something can go wrong.

Our governance token & rewards system is a forked (& improved version) of Bao.finance. Bao.finance is in itself initially based on the well-tested Sushiswap MasterChef contract — but has also introduced a lot of additional code to introduce dynamic reward periods, unique token lockup functionality etc etc. Bao.finance has $50m+ TVL in their protocol and haven’t experienced any issues since their launch. With that said — you can never truly know if there’s unknown bugs that can arise.

We’ve spent quite a bit of effort on adding encompassing test suites in order to QA both Bao.finance’s code + the custom code we’ve introduced. You can never have enough tests though, so we’re constantly adding more.

Some components in the system will also be without timelocks for the first few days. We’re planning on timelocking all critical components in the system as soon possible, but only after seeing that the protocol works as intended.

Our goal is to secure multiple audits for the protocol — but we don’t have any audits scheduled right now, or a definitive deadline for when to secure them. We will be reaching out to auditors to get quotes for how much it would cost to audit the protocol. This is also one of the primary reasons for why the development treasury exists — it’s intended to cover the costs for this endeavour.

TLDR; ape responsibly.

Deployed contracts

Smart contract code is available at: https://github.com/VenomProtocol/

Deployed contract addresses:

  • GovernanceToken (Viper / VIPER): 0xEa589E93Ff18b1a1F1e9BaC7EF3E86Ab62addc79
  • MasterBreeder: 0x7AbC67c8D4b248A38B0dc5756300630108Cb48b4
  • PitBreeder: 0x08913d353091e24B361f0E519e2f7aD07a78995d
  • Pit (ViperPit / xVIPER): 0xE064a68994e9380250CfEE3E8C0e2AC5C0924548
  • UniswapV2Factory: 0x7D02c116b98d0965ba7B642ace0183ad8b8D2196
  • UniswapV2Router02: 0xf012702a5f0e54015362cBCA26a26fc90AA832a3

Treasury addresses

Deployed websites/interfaces

We’ve deployed multiple interfaces spread across the globe to ensure that there are several fallback options if one (or several interfaces) would become unresponsive/go offline.

ViperSwap can be accessed from the following domains:

Why Harmony instead of chain X, Y or Z?

Ever since the glorious (and sleepless!) nights of the DeFi summer season of 2020 we’ve seen the gradual change of yield farming changing from a fun, accessible and profitable activity for the general yield farming ape to becoming a whale game where the little guy is getting priced out from even participating. It sure doesn’t make a lot of sense to pay $100 in gas fees to claim $10 worth of rewards.

Launching on Harmony isn’t a matter of choosing one chain over another — we’re striving to become a multi-chain DeFi protocol/DAO and that kinda implies launching on multiple chains.

We’re just starting out on Harmony because:

  • It’s a fast, cheap and EVM + Ethereum tooling compatible chain with a lot of potential upside.
  • There’s very little competition on the chain.
    Meanwhile there are DEX:es and farms being launched on Binance Smart Chain every 5 minutes Harmony is still very much a hidden gem with very little activity.
    When the BSC decentralization drama/issue might eventually become a major issue Harmony is poised to pick up a considerable amount of that DeFi activity — and the first movers in the DEX space on Harmony can potentially gain a lot of momentum when this happens.

Roadmap

Q1 2021

  • ViperSwap + yield farming live on Harmony.
  • “xSwap” (name/brand yet to be determined)+ yield farming live on Binance Smart Chain (being tested right now — more details coming ~soon).
  • Decent APY tools/statistics for ViperSwap on Harmony & “xSwap” on Binance Smart Chain.

Q2 2021

  • An additional DEX + yield farming initiative live on Polygon, xDai, Fantom, Avalanche, Huobi ECO Chain or similar EVM + Ethereum-tooling compatible chain (specific chain will be decided later).
  • Local governance introduced on all chains.
  • VenomPad — an IDO/launchpad product.

Q3 2021

  • VenomPools — a borrowing/lending product similar to Compound, expected to be launched on multiple chains.
  • VenomVaults — cross-chain yield generating vaults (inspired by YFI’s vaults and similar protocols). VIPER holders/the DAO will control the fees paid to strategists and other variables in the system.

Q4 2021

  • VenomUSD (vUSD) — an algorithmic stablecoin incorporating burning VIPER (and other ecosystem governance tokens) as a part of its incentives system to achieve the desired $1 stablecoin peg.
  • VenomDAO — initial version of the overall DAO controlling the entire ecosystem on all chains. Also design & launch a value accrual “ETF”/index design for the VENOM token, composed of fractions of each underlying local governance token existing in the full VenomDAO ecosystem.

Resources

VenomDAO

A cross-chain multi-product protocol