For the last five days after my blog post of V2, we have started in-depth Documentation on DEUS V2 we will release in the upcoming days, but together with the Documentation and already before I realized how big of a project this will become in the future.
I will now, in this proposal, lay out the foundation of changes needed to position the DEUS protocol so it can achieve the transition smoothly.
The too long didn’t read of this proposal:
- Implement a fractional Reserve Stablecoin, like Frax called “DEI.”
Implement a fractional reserve of DEUS of 25%
Implement a fractional reserve of DAI of 75%
(improve its TWAP with Muon, implement FailSafes like FRAX to avoid something that happened at IRON (Amos & scaleable Redeeming fees)
- Pair all Synthetics with that Stablecoin.
- Use all DAI currently sitting in the Synchronizers to mint DEI.
Buying DEI would burn DEA, based on Muon Oracle price.
Selling DEI would mint DEA, based on Muon Oracle price.
Install “Algorithmic Market Operations Controller” to unbreakable peg DEI to 1$.
- Incentivize trading and counter trading with DEA, this increases capital efficiency in DEUS, over collateral rates could be decreased to 200%.
- Trading positions would be automatically counter traded by vault stakers. That creates a “front run” of vaults feeling for Manual counter traders that wanna max out their APY.
Trader A creates a 1000$ TSLA position. He pays 1000 DAI, 250 DAI gets swapped into DEA and burned, 750 DAI gets deposited into the DEI minting contract, the Trader gets a 1000 DEI TSLA position.
Now Countertrader B enters the game, he now takes a 1000$ TSLA short position to countertrade Trader A and farms his funding plus the arbitrary rewards that the system is paying out to Hedgers.
He also pays 1000 DAI, 750 DAI get deposited into the DEI minting Contract, 250 DAI are buying DEA from the Market and burning them.
Creating an individual Counterposition trade, when TSLA is rising 95%, the Countertrader B needs to either put up more collateral to hold the position or get Liquidated and the TraderA gets deleverage.
Trader A trade gets immediately listed again to be filled by a countertrade.
The Liquidator (potentially a Muon node) gets the 5% outstanding Collateral of the Countertrade as a reward.
Benefits for the DEUS ecosystem and Token holder
Remove the need for overcollateral of the Solvers(Hedgers), and create a more capital efficient system.
Incentivize traders and attract more of them by doing so.
Implement a Referral System to overall increase the awareness of DEUS
(referrals receive a percentage of all their referees’ fees & liquidations)
Have auto counter trading for Vault stakers, which will increase the APY for Hedgers by several orders. They will be farming spreads + funding + arbitrary DEA rewards for taking the counterposition.
It also introduces the field for first “Contractor” like behaviors, making it easier to transition to v3.
DEUS V2 — Stablecoin
- Fork Frax, add Muon-based Oracle technology.
- Install AMOs to unbreakable peg DEI prices to 1$
- Incentivize DEI / DEA + DEI / DAI pools
- Keep the Balancer Pool as an Exit for old Vault Stakers and to keep the UniSwap pools flourishing, incentivize BalancerPool stakers.
- use DEI to back synthetics, mint at trader profits burn at trader losses
-> release it as DEUS V2 with a big Staking event like in the early days of DEUS.
(time estimate of this will follow after proposal reaches quorum)
DEUS v3.0–3rd Party Contractors
- Work on DEUS v3 as described in the Documentation and implement 3rd party contractors (hedgers)
DEUS V3.1 — AccountManager Countertrading
- Develop AccountManager.sol that implements the CounterTrading positions pairs.
- Swap all Vault Holdings to DEI
- Create an automatic CounterTrade Keeper on Muon that will countertrade the position of every Trader after 5 minutes.
- Create the Liquidator Keepers that liquidate positions after assets move 90% into one direction, and the Trader didnt add additional collateral. (called maintenance margin)
- Ease out the Staking Process, by now only accepting DAI/DEI. (DEA gets burned in the process).
- Remove Balancer pools. Only introduce an sDEA / DEA pool.
-> release it as DEUS V1.3( From this moment, capital efficiency is several orders of magnitudes better, and APY will get another significant increase, decrease Inflationary rewards from here on.)
DEUS V3.2— Leverage
- Implement Leveraged positions.
DEUS V3.3 — Referral
- Create a referral system that enables users to invite others into the platform. (1 Month)