Graveyard Management Fund
or, how to give back to community earnings?
Need for Not-a-Ponzi utility
GRAVE DIGGERS, as described in previous paper, provides utility case for $TOMB. A quick recap:
- locking $TOMB up to 4 years yields a random $DIGGER
- $DIGGER is digging $GRAVE and $GEM at the graveyard
- $GRAVE can be exchanged for equipment — $SHOVEL and $FOILCAP
- $GRAVE can be spent on levelling up equipment
- $SHOVEL and $FOILCAP boosts $DIGGER characteristics
- $GEM exists to be a supplementary non-fungible rarity-based incentive
However, this setup does not provide enough utility for $DIGGER and $GRAVE — a question rises:
Why would I need to earn $GRAVE if, besides earning more $GEM, it leads solely to earn more $GRAVE?
A possible solution is going to be discussed.
Index
- GRAVE DIGGERS
- GRAVEYARD MANAGEMENT FUND
- DIGGERS’ GUILDS
Terminology
- $TOMB — main “ecosystem” token
- recruiting — an irreversible process to recruit a $DIGGER for $TOMB
- $DIGGER — primary non-fungible token
- digging — a process, which occupies $DIGGER with digging $GRAVEs
- $GRAVE — incentive fungible token, which is mined through digging
- $GEM — non-fungible token, which may be mined through digging
- $SHOVEL and $FOILCAP — non-fungible tokens, which may be used to enhance $DIGGERs characteristics
- $GDHR — fungible token, which is used to claim a share of protocol earnings
Protocol earnings management
Primary Token Inflows
In previous paper, ways of accruing $TOMB and $GRAVE for Graveyard Management Fund were disclosed, such as:
- fees in $TOMB from signing an employment contract with $DIGGER
- penalties in $TOMB from firing $DIGGER
- sales in $GRAVE from The Auction
- upgrade costs in $GRAVE from The Lab
Listed inflows may not be correlated and balanced between themselves.
Secondary Token Inflow
Secondary Token Inflows are created by management strategies. For example, a protocol can claim assets from Primary Token Inflows and earn more by providing liquidity on DEX. Protocol-owned Liquidity Vault handles that task in this project by executing a specific strategy at certain time.
Token Outflows
Two strategies to distribute earnings back to community are Human Resources HQ Vault and Tournaments Vault.
Human Resources HQ Vault is used to give back earnings for $GDHR token supporters, and to emit $GDHR as reward for executing strategy-dependent tasks, for example, renting or selling liquidity.
Tournaments Vault is used to distribute rewards to players, based on their relative success in regular competitions.
To manage all assets flows, a set of management phases is developed, which represents and fulfils current project demands:
- Phase 1 — Generation
- Phase 2 — Farming
- Phase 3 — Tail
Phase 1
Initial phase can be described with low vAMM-TOMB/GRAVE liquidity. Thus, main tasks of first phase is to:
- accumulate Protocol-owned liquidity
- accumulate 1st Tournament Prize pool
- incentivise renting or selling liquidity in vAMM-TOMB/GRAVE
Primary Token inflows
First phase inflows will be managed, mainly, to Protocol-owned Liquidity Vault, with little flow to Tournaments and HQ Vaults. This will provide relatively enough liquidity in Protocol-owned Liquidity Vault to enter liquidity pool.
The other way for protocol to claim liquidity will be Bonding service — which will provide an option to sell LP-tokens for incentive.
Protocol-owned Liquidity Vault flow
At Phase 1, all assets accumulated in Protocol-owned Liquidity Vault will be locked upon entering next phase.
This is done to avoid operations, while DEX has low liquidity.
Human Resources HQ Vault flow
To incentivise providing initial liquidity in vAMM-TOMB/GRAVE two strategies are introduced: staking LP vAMM-TOMB/GRAVE and selling LP vAMM-TOMB/GRAVE. Staking LPs will yield in $GDHR emission over staking time, selling will yield in $GDHR emission per bonding period.
To incentivise providing liquidity at DEX — $GDHR-emitting gauges exist: vAMM-TOMB/GRAVE and vAMM-TOMB/GDHR.
More on Bonding service. This service (while active) will be divided in Bonding periods (~ 1 day long). Through single Bonding period, accounts can spend their vAMM-TOMB/GRAVE LP tokens. At the end of current Bonding period, a fixed, constant, per-period amount of $GDHR will be distributed to all, who spent LP tokens in current period, in dependence of their share in all spent LP tokens in current period. Bonding service will be active only for 1st Phase.
As earnings distribution mechanism, $GDHR locks exists — this way, $GDHR investors can have a share of project’s $TOMB and $GRAVE earnings by locking their $GDHR for arbitrary period from 1 week to 4 years.
During 1st Phase Human Resources HQ Vault and Bonding service will handle tasks of:
- acquiring initial liquidity in Protocol-owned Liquidity Vault with Bonding service
- incentivising liquidity providing with $GDHR emission
- incentivising $GHDR lockers with $TOMB and $GRAVE redistribution
Tournaments Vault flow
Tournaments are $DIGGER employers’ periodic competitions for prize pools and leaderboard chart. Single Tournament is divided in 3 stages:
- preparation (~4 days)— beginning of this stage determines prize pool, and enables access to transfer $DIGGERs from Graveyard to this Tournament
- competition (~1 day)— $DIGGERs, assigned to the Tournament are locked and work hard to earn Tournament Points and score themselves up in leaderboard.
- contraction(~ 2 days) — $DIGGERs stop working and ready to be withdrawn from Tournament. The prize pool is distributed among participants.
$TOMB, accrued at Tournaments Vault prior to next Tournament’s preparation stage will be distributed proportionally into next 4 Tournaments’ prize pools.
Additional rewards in arbitrary ERC-20 tokens may be distributed by project partners, or arbitrary account to incentive, promote specific Tournament.
Tournament prize pool is divided between $DIGGERs based on their position in leaderboard as exponential-ish curve, which depends on number of participants.
Shown above equation illustrates share of prize pool (y) in dependence of number of participants (n), and arbitrary participant position in leaderboard (x, starts at 1).
Note on some specific mechanics:
- $DIGGERs, assigned to a Tournament, will be locked in it prior to contraction stage.
- $DIGGERs, which are assigned to a Tournament do not yield $GRAVE nor $GEM.
- $DIGGERs, yield Tournament Points at the same speed as they would mine $GRAVE in Graveyard.
- $DIGGERs, which will be forgotten to be un-assigned from a Tournament when contraction stage ends, will be executed and burned. Their underlying $TOMB will be transferred to Graveyard Management Fund, as if it were firing penalties.
Tournaments Vault flow will be unchangeable between Phases and will handle task of redistributing earned $TOMB back to active players.
NOTE: It may seem, that competing in tournaments is useless for $DIGGERs with low $TOMB locked in them, as only the most “powerful” $DIGGER will claim the biggest share of pool. This statement is truthful and a solution is described in the next paper.
Phase 2
Second phase may be described with accumulated liquidity, thus requires a strategy to earn more on it. The main tasks of second phase are to:
- reduce accumulating Protocol-owned Liquidity
- manage Protocol-owned Liquidity to earn $TOMB
- rebalance incentive from providing vAMM-TOMB/GRAVE liquidity to vAMM-TOMB/GDHR
- increase Tournaments and Human Resources HQ Vaults gains
Primary Token inflows
Second phase inflows will be managed to maximise Tournaments and Human Resources HQ Vaults, because Protocol-owned Liquidity Vault generation will be completed, thus Bonding service will no longer exist and flow rates will be rebalanced.
Protocol-owned Liquidity Vault flow
At Phase 2, Protocol-owned Liquidity Vault will start earning $TOMB via described below liquidity farming strategy.
Because $TOMB and $GRAVE inflows may not be correlated — a balancer is required to achieve 50/50 equilibrium, based on liquidity pool.
A balancer will sell or buy $GRAVE from DEX, that leads to implications:
- Employing and firing $DIGGER may lead to selling excess $TOMB for $GRAVE -> increasing the price of $GRAVE
- Buying and upgrading equipment may lead to selling excess $GRAVE for $TOMB -> lowering the price of $GRAVE
The flow of protocol-owned liquidity is defined as:
- Rebalanced assets are used to mint SOLIDLY LP tokens
- LP tokens are gauged at SOLIDEX to earn $SOLID and $SEX
- $SOLID, earned from LP gauge is exchanged for $SOLIDsex
- $SOLIDsex is staked at SOLIDEX to earn $SOLID and $SEX
- $SOLID, earned from $SOLIDsex staking is swapped to $TOMB
- $SEX, earned from LP gauge and $SOLIDsex staking is locked for max. period to mint $vlSEX
- $vlSEX is used to vote for LP tokens at SOLIDEX
- All claimable earnings from locking $SEX (fees, bribes, $SOLIDsex) is swapped to $TOMB
As $SOLID, $SEX emissions does not depend on trading volume of pool, but solely on votes, and fees, bribes will be dispersed from other SOLIDEX pools, infinite $GRAVE emission contains no negative drawbacks for providing constant liquidity.
Thus, protocol-owned liquidity will generate $TOMB from underlying assets and a secondary $TOMB inflow. All earned $TOMB from Protocol-owned Liquidity Vault is transferred to Human Resources HQ Vault and Tournaments Vault evenly.
NOTE: It is a subject of discussion whether SOLID/SOLIDSEX remains profitable enough in relation to other liquidity framing strategies, so this strategy may be changed prior launch.
Human Resources HQ Vault flow
Human Resources HQ Vault flow will be changed to minimise incentive to provide liquidity in vAMM-TOMB/GRAVE. This pair, because of unlimited $GRAVE supply and no burning mechanism, expected to be relatively volatile and constant subject to impermanent loss. Thus, is is a safe measure to limit community in providing liquidity in this pair at this phase.
The main share of earned $TOMB will be distributed to $HR lockers, while $GDHR mint remains will be mainly used to incentivise vAMM-TOMB/GDHR gauge.
Phase 3
Third phase may be described with accumulated Protocol-owned Liquidity, diminishing GRAVE price, diminished $SOLID / $SEX / $GDHR emission, thus requires a new strategy to manage Protocol-owned Liquidity. The main tasks of third phase are to:
- create mechanism to diminish $GRAVE unlimited supply
- earn more $TOMB based only on accumulated $TOMB itself
Primary Token Inflow
Last phase $TOMB inflows will still be managed, mainly, to Tournaments and Human Resources HQ Vaults, will little flow to Protocol-owned Liquidity Vault.
Furthermore, from this point the will be no way to earn $GRAVE, other than mining at Graveyard, as all earned by protocol $GRAVE will be burned.
Protocol-owned Liquidity Vault flow
At phase 3, there will be no $GRAVE inflow from protocol operations, so, single-assed farming is required to maintain secondary inflows.
The flow of Protocol-owned Liquidity at phase 3 is defined as:
- $TOMB is transfered to lending balancer
- lending balancer, based on time-weighted APY selects proportionally which protocols will be used for new batch of $TOMB
- $TOMB is deposited at lending protocols / single-asset farms such as TAROT, IMPERMAX, MARKET, etc…
- Accrued $TOMB is withdrawn from lending and distributed to Tournaments and Human Resources HQ Vaults.
Thus giving an option to earn more $TOMB from single-asset staking.
NOTE: All $GRAVE which were left in Protocol-owned Liquidity Vault from Phase 2 will be burned upon phase migration.
As result of this paper — a way for arbitrary $DIGGER to earn $TOMB is presented, along with Protocol-owned Liquidity management strategies.
