How To Unleash The Hidden Potential Of OlympusDAO & Other Reserve Currencies

Changing The Narrative From (3,3) To Community-Owned Treasury

Narrative Shift: Vesq = The People’s MATIC Whale

Vesq can rebrand itself as a treasury DAO aiming to be the largest community owned MATIC and ETH position in the world. The treasury and protocol will be governed by the $VSQ token, with a predominant MATIC treasury actively earning yield and shared with long term $VSQ holders.

High-Level Overview

Part 1: Inspiration Taken From CitadelDAO

A. Creating a new locking mechanism:

In the original model, a user could stake $VSQ for $sVSQ which would rebase in order to prevent dilution of the token holder. The user could exit at any point of time and sell $VSQ in the open market. One could definitely argue that the incentives for bad actors, who could severely hurt long-term stakers and users of the protocol, highly outweighed the counter incentives.

Benefits To $veVSQ Holders Include:

  1. Earn $VSQ emissions
  2. Earn a portion of bonds in the form of the respective bond currency paid out every quarter
  3. Earn farming revenue from treasury funds
  4. Collect bribes for directing treasury funds to various protocols
  5. Governance power for future decisions

B. Changing The Emission Schedule:

The revised emission schedule will be more dynamic and sustainable. It is inspired by the tokenomics of CitadelDAO which is designed in such a way that token inflation is directed towards accumulating treasury through the issuance of bonds when the market capitalization of $VSQ is high to take advantage of price. This helps to increase the treasury and floor price of $VSQ.

$VSQ’s New Emission Schedule

The Emissions Would Be Split Into 2 Parts:

  1. DAO treasury: 15% of emissions would directly go into the treasury which would be split into LP and operational funds at 10% and 5% respectively.
  2. Token Inflation: Remaining 85% will be dynamically split amongst (a) emissions to veVSQ holders, and (b) emissions to bond sales to acquire treasury assets
  1. % of current token supply staked (S%)
  2. Low Target MT (ltMT) — The lower bound of the target MT ratio range.
  3. High Target MT (htMT) — The upper bound of the target MT ratio range.
  4. Max MT (xMT) — MT at which stakers & lockers receive 0 emissions
  5. Min MT (nMT) — MT at which stakers & lockers receive 100% of emissions

Parameters For Elastic Emission To veVSQ Holders

Situation 1: MT Ratio In Target Range

Situation 2: MT Ratio Above Target Range

Situation 3: MT Ratio Below Target Range

Funding Emission To Acquire Treasury Through $VSQ Bonds

Below is a screenshot of the distribution of $VSQ inflation between veVSQ stakers and the issuance of $VSQ for bonds.

MT Ratio & Bond:veVSQ Emissions

C. Creating Dynamic Bond Pricing

Bonds Contract

Emissions allocated to issuing bonds will be sent to a bonds contract (one contract per bonding asset) at an interval of 3 times per day (8 hours and will be distributed as $VSQ). The goal of the Funding contract is to create a hands-off mechanism for $VSQ to be exchanged for any asset that VESQ wants to acquire for its treasury.

Bond Manager

The four key variables in the discount manager are

Example: MATIC Bond Contract

Top up: After 8 hours and Balance = 5,000

Top up: After 8 hours and Balance = 999

Bond Sales Reward veVSQ Stakers

veVSQ stakers also continuously receive 10% of the tokens for which bonds were issued for, like MATIC and ETH, and this compensates for the lack of $VSQ emissions when the MT ratio is extremely high in a bull market.

Part 2: Inspiration taken from Sifu Vision

A. Quarterly $VSQ Burn

B. Rage Quit

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