How the new platform will work — Part 2
We are excited to release the second article regarding the intricacies of our imminent Thorus platform launch. As mentioned in the first article, this new model will have a token holder first approach, and all protocol functions are designed to reinforce this mentality.
Missed the first part? Click below!
To extend upon the previous article, we’d like to cover the emission rate for our new token ($THO) and the reintroduction of the platform stable coin ($STATIK) in more detail. As previously discussed, emissions will be distributed primarily to token holders to ensure minimal long-term dilution of their staked assets. Therefore, the set maximum supply of 200m will be reached in 4 years and follow the schedule provided below:
$THO — Platform Token:
The platform itself will have three primary phases.
1️⃣ Phase 1 — The Inflationary Phase
The first four years will constitute the inflationary phase. At this time, APRs will be established using emissions with the primary objective of strengthening the Treasury, rewarding token holders, and increasing liquidity so that the AMM DEX functions efficiently and earns additional yields through swap fees. Accordingly, emissions will be allocated using the following weights:
- 40% will be allocated to Farms, with 95% rewarding platform-specific pairs and single staking. The remaining 5% will be used to establish additional non-platform-based pairs such as ETH/BUSD, among others. This modification will allow for higher APRs than we have achieved in the past and ensures minimal holder dilution.
- 35% will be allocated to the Bond portion of the platform. These tokens will be locked until the subsequent bonds are purchased — rather than minted during the purchase cycle. As such, inflation is mitigated until there is the appropriate TVL to utilize the introduction of the locked tokens.
- 25% will be allocated to the Reserve Fund, which will act as a type of bank for $THO and allow us to expand cross-chain quickly. This allocation would be what provides the initial attractive APRs on new chains.
2️⃣ Phase 2 — The Consolidation Phase
The consolidation phase will begin after emissions have ended. At this point, the Treasury will be fully self-sustaining through various outside investment strategies such as stable lending pairs. In addition, the Treasury would be continually reinforced through trading fees collected on the platform. This combination will allow for a gradual and continued increase of the floor price of $THO through buybacks at a specific and trailing variable price. For means of context, if the Treasury achieved a 1B TVL the estimated yearly profit generation sits at roughly 200m. As a result of the completed emissions, these yields will have a direct and increasing effect on the floor price.
3️⃣ Phase 3 — The Deflationary Stage
With emissions having been completed and a robust Treasury investment model in place that continually buys back $THO, the price of $THO will constantly rise as more of the supply is removed from circulation. In effect, token holders become a type of shareholder of the whole ecosystem and will receive continual earnings from these yields.
$STATIK — Stable Coin:
We have also updated the platform-specific stable coin ($STATIK) metrics and have changed several vital aspects. One of the main aspects of the lower rate of adoption of WUSD resulted from quickly depreciating APRs. These APRs decreased substantially because of LP pairs’ inherent 50:50 backing nature — that is to say, the same reward allocation for what is twice the TVL incorporated through WUSD adoption.
Beyond that, the 10% backing of Wex and Wexpoly for WUSD was not inherently high enough to allow for dynamic APR adjustments and therefore became a net negative for the platform. In addition, this design inherently resulted in a depeg during times of neutral WUSD adoption as the rewards continued to place pressure on the ecosystem. This triggered additional collapsing of APRs, which increased prolonged sell pressure of farm rewards that partially collateralized the stable coin, which meant more strain on the 10% backing.
To solve these issues, we’re making the following changes:
- We are increasing the collateral rate to 25% for the native platform and 75% for DAI/USDC. This figure was derived from the halving weight LP pairs inherently have from their 50:50 structure. As such, increasing the collateral rate of $THO above 20% results in a weighted average above 10% for the pair. This helps ensure high APRs regardless of whether adoption rates stall.
- We’ve limited the external liquidity needed to ensure the platform runs smoothly. By transitioning to a Protocol Owned Liquidity (POL) model, emphasis is placed on creating a stable base rather than relying on “Farm Hoppers” who chase high APRs.
- For every 24 hours the peg stays below $0.99; an additional 5% of the trading fees collected will be directed to the $STATIK contract. We will reduce the trading fees once the peg is regained.
- For every 24H the peg stays below 0.99$, 2.5% of emissions from the farm section will be diverted to the $STATIK contract. This equates to 1% of total emissions on the platform per day. We will cut emissions after the peg is regained.
- Treasury Backing — If the $THO price touches the Floor price, the Treasury will buy back $THO, which will help the stable coin regain peg. So rather than just relying on the weekly buyback and burns the previous system relied on, the stable coin will have a much greater Treasury backing inherently. Bought back $THO will remain in the Treasury to support overall TVL levels.
- 100% of trading fees that Thorus platform acquires from the Swap (ie: 0.15% out of 0.30% trading fee) will go towards the Treasury. This will ensure the Treasury can continue to grow to support any future market volatility.
- A 0.7% redemption fee will be charged on each $STATIK redemption and a 0.4% mint fee on each $STATIK mint. Both of these fees will be deposited in the Treasury.
- A portion of idle Treasury will be deployed within strategies on safe external protocols to earn yields to feedback to the Treasury, growing it over time.
Coming soon:
A third article will be released shortly, going through additional platform utility changes such as Launchpad structures and more. As always, we are open to questions via our social media channels!
