Motivation:
There is no truly decentralised, community-owned and run money market out there. I believe there is a tremendous value in having a global financial commons on a public blockchain as governments and big businesses start to step into the space - to provide non-discriminatory, non-censored financial services at the best terms available and with the wide variety of services/products for lending and borrowing.
So I think we can and should strive to become just that: a cornerstone DeFi app built from the ground up by its users and offered to anyone who’s willing to use it and help make it better.
I want to call it Hundred as a reference to the Hundred Percent versus the One Percent of people that it wants to empower. And also stressing that you can only keep it one hundred in this community or go home. Just the way @vfat handled things after the incident. 100% transparency, accountability and dedication. That is what community ownership truly means.
I hope this new project starts a new the Hundred Percent Movement towards financial liberation of people worldwide.
Product:
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Money Markets based on Compound’s well-tested and audited new generation smart contracts that allow for adjustments/updates (so we don’t have the same issue as we just did).
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Added to it is the combination of Chainlink price oracles + Uniswap TWAP-based oracles, which will allow us to list the largest variety of tokens, based on risk assessment.
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Specifically we want to re-launch the money markets with vault and LP tokens to be allowed as collateral, while still accruing returns/fees and liquidity mining yield for their owners.
Also, we want to add new functionality like:
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protocol token-based credit union that allows members to borrow without collateral.
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ability to wrap money market positions into NFTs and trade them instead of having to close or liquidate. Or maybe one could create wrappers around multiple positions on the market and create derivative assets based on that. Not someplace else but directly with the protocol allowing both the supply and debt to be tokenised.
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pro-active vertical integration with wallets, apps and fiat on/off ramps, so that our money market is embedded into the most user-friendly DeFi interfaces. Proactive means the team helps these interfaces to integrate Percent, so that we’re quick and effective in expanding the user base.
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other products that the community votes and executes on
Governance:
We will issue the new token, taking a valuation of $2m as a basis, which corresponds to the rough valuation Percent had before crashing.
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holders of ~$400-500k worth of funds permanently stuck after the unwinding of the money markets will receive a pro-rata share of protocol tokens at such valuation, except for the addresses that ended up in profit, corresponding to ~25% of new tokens. Here’s the the list of relevant addresses. Their tokens will be locked up for linear vesting over 12 months or opted out for token liquidity provision on their behalf by the Treasury with the same vesting for redemption. Any single holder of >6% stake that wants to take their tokens at the time of vesting (as opposed to liquidity provision on their behalf) would have their tokens mandatorily market sold on their behalf by the Treasury, until their stake reaches 6%, but only if the market cap is above $2m at the time, as we want to reward them for taking risk with the original project.
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Balancer and Uniswap PCT LPs who are still holding PCT (snapshot at block 11213614 will also receive a pro-rata share of their PCT-only holdings (not ETH) at a $0.1 valuation (corresponding to roughly ~$250k, excluding the Treasury PCTs, which is ~12.5% of new tokens). Their tokens will be locked up for linear vesting over 12 months or opted out for token liquidity provision on their behalf by the Treasury with the same vesting for redemption. Any single holder of >6% stake that wants to take their tokens at the time of vesting (as opposed to liquidity provision on their behalf) would have their tokens mandatorily market sold on their behalf by the Treasury, until their stake reaches 6%, but only if the market cap is above $2m at the time, as we want to reward them for taking risk with the original project.
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50% of the new tokens will be given out as incentives for the use of the protocol over a course of 12 months. For money markets we will incentivise supply-borrow calculation of one’s share of rewards to disincentivise levering up with the same protocol reserves to juice the liquidity mining rewards.
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up to 7.5% of tokens will be sold at a 2m protocol valuation to community members willing to finance the protocol development and work for it. I believe we need no more than $150k worth of initial funding. So this sets a cap of 7.5% to be sold, but could turn out less. Buying the token and working for the protocol eliminates the risk for the token to be deemed a security. The people willing to finance would need to disclose to the community the amount they are willing to provide and the obligations they are willing to take up as a mandatory 12-month service in the execution multi-signer team of the protocol. Their token is linearly vested for the duration of the service. 1 person can provide a maximum of $50k and the community needs to vote whether they agree the person will provide value with their work. If there’s multiple bids and limited capacity, the community needs to vote on who they want to see in the exec team and top-4 ppl will get the pro-rata allocation, divided to: Product/Strategy, Marketing/BizDev, Community building, Risk Management/Token economics. As a disclosure, I’m willing to offer myself for the job and put up $50k for it. The initial execution team is made up of currently active multisig members (none of whom has to buy in): @Bluecrypt, @vfat, @pyggie, @brisket, @Spartacus and myself and voted in/out by the community on a bi-weekly basis in the first 2 months, and then monthly. By end of the first 2-month period only 5 members of the original execution team can remain + 1 new person voted in + lead dev joining them as a 7th multisig signer from the community. If any of those leaving the exec team at any time within the 12-month period originally bought in, their tokens continue vesting, but at 2x faster pace.
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5% or more (depending on how much is sold to execution team) is given as a 2-year-vested allocation to the developer team (see Hires for vesting conditions).
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Any stake in the new token has a maximum of up to 2% of the voting power for governance. Only stakes that weren’t reduced or added to in 2 months prior to voting can vote. Essentially, broad community governance starts 2 months in, before it the protocol is governed by an execution and developer team evaluated bi-weekly via rough community consensus voting tools. Alternatively token holders can signal their support or lack thereof to items proposed by execution/dev team via tools like this.
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after governance kicks in, proposals can be made only by execution and dev team or community members, who disclose their voting addresses 2 months prior to a vote on any of their proposals and if those addresses satisfy the earlier-mentioned criteria for the move of funds. Essentially, they would need to announce their intention to participate in governance beforehand and no-one, including execution team members, can prevent them from making proposals, however multisig team can veto the proposal if there is a 100% consensus among them. Any community member that wants to propose something for the vote but isn’t eligible under the criteria above can post their proposal on any community forum and rally those with power to propose to support them. Buy-in execution team members, vesting devs and ppl affected by the Percent losses will not be able to vote with unvested tokens.
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after initial 12-month period we may consider a full-flegded vote-based governance a-la Compound with the same 2% and fund movement history limitations. Thresholds for quorum and other details need to be discussed separately to make sure it’s robust and non-gameable.
Token Utility:
We will need to work on the token economics concurrently with the launch and ideally have a dedicated team for it, so I will only outline some of my thoughts here.
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Token cannot be used for direct protocol profit sharing (for regulatory reasons), instead we can equate the economic outcome of profit sharing to staking certain amount of tokens in the protocol - e.g. you stake protocol token up to the full size of the reserve factor of all your deposits or borrows to get 100% discount on the protocol reserve, i.e. the protocol doesn’t add any % on top of the rate given to you by the markets. In return your stake gets slashed in a pro-rata fashion if the protocol needs to use reserves to cover for some money market losses by re-distributing those tokens.
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Token can be used for credit union staking (cont’d from one of the new Product ideas above). This can roughly work like this: in order for you to get an uncollateralised loan, some number of union members need to vouch and stake their tokens for you (only protocol tokens, not what you will borrow in) in return for pro-rata share of protocol “profits” - e.g. monthly/quarterly distribution of accumulated reserves. Or you need a small amount of protocol tokens (say 10-15%) worth of the amount you want to borrow without collateral, that gets distributed over the length of your borrowing (set at the outset) to your vouchers - the longer you borrow, the larger the sum. Alternatively, vouchers can receive newly minted tokens, which is done by this cool project Union that originated the whole concept, but I’m personally inclining to have capped token supply.
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You will need to pay a small protocol fee in native tokens in order to mint NFT that wraps all of your market positions (both supply and borrow, could be an ERC1155). Essentially, this should be cheaper in both gas and protocol cost than closing out the positions in order for it to be feasible (cont’d from one of the new Product proposals above).
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Alternatively, anyone can create an asset corresponding to multiple positions at risk that haven’t yet hit the liquidation threshold by bonding the amount that equals to the value of collateral factor levels of positions at risk at then current market price of protocol token. They can then pocket the difference (profit or loss) by selling such an asset on the NFT/ CLO-like instrument market. Whoever ends up holding the asset can only un-bond the protocol tokens if all of those positions ended up liquidated. This can create an additional protocol security layer in response to users staking gov tokens to reduce their cost of borrowing via reduction of protocol reserves. Obviously this needs more research, it’s a very rough idea.
Hires:
In my opinion, we need the protocol tokens to incentivise lead developer and their team and use the rest of the initial executive team contribution of up to $150k on other hires and costs. Execution team remuneration (if any) should be decided after an initial 12-month period. This fully aligns the team with other token holders.
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Lead Developer
We need to collectively agree on the product roadmap the lead should pursue and the timeline for milestones - gauging feedback from the candidates so that it’s most realistic.
Based on that we will assign vesting based on hitting those milestones. The lead can then decide if they want to make hires to their team and manage allocations within the overall dev share between the team as they see fit. Community just wants the devs to report on milestones and thus provide tokens in return. No other compensation should be given to core devs.
I’d like to nominate @Splix for this position. He is the most renowned developer to actively take interest in our project and has full stack skills to be able to work on both the back- and the front-end and he also managed the team that supported all of Ethereum Classic development until end-2018 (with things turning sour for that chain after they left). So he is capable of managing other devs and work on complex blockchain engineering tasks.
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UI/UX designer/coder
If the lead dev has no time to handle it them-self (due to other tasks) or hire people to the team for this, we can hire external UI/UX person to put together slick-ass webpages for our money market and protocol dashboards for a one-time bounty. The candidate would need to provide portfolio and proposal mockups to win the bounty from the community.
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Marketing/ Bizdev lead/ Community spokesperson
If we end up not having marketing professionals in the execution team - as we currently don’t after @clivespader left the project following the incident - we may want to hire such a person. If the community deems it acceptable we can also invite Clive to return. The candidate would need to provide verifiable info on their past experience, even if they wish to remain pseudonymous. Although I personally believe that this job, especially on the bizdev side, should be public and transparent.
Misc spending:
We can use the remainder of the funding pool to secure a little marketing and infrastructure spend, as well as to use it for bounties like security audits, minor improvements etc.
Discussion:
I suggest we use both this forum and the dedicated Discord channel to discuss this proposal and arrive at final parameters.
