gachouchani1999
commented
2 years ago A Visual Diagram that explains more the process: https://lucid.app/lucidchart/eb1b6273-86ac-475f-a0f1-d5398f79a910/edit?invitationId=inv_7ae7a45f-0c50-4a5e-9128-46b3c4809361
Gold Standard Protocol
Project Description
This is the next DEFI protocol after Anchor where 0% permission-less lending will be introduced in the ecosystem with a floor price token. Gold standard protocol is based on tokens that when purchased are allowed to be used as collateral to be able to take up to 95% of their total price in SCRT. This will allow permission-less 0% fee lending in the ecosystem, where holders of these tokens have a floor price of 95% their value (backed by the smart contract) So for example if tokens are purchased for 1 SCRT each, they can sell it back directly to the smart contract for 95% the price. Holders are incentivized to keep borrowing and holding the coins since each default/sell of the token increases the price at a stable rate. This will mean that after a while the token will reach 101% of initial price where lending becomes profitable + holders can sell at a profit increasing the price of the token for the new holder.
This makes it a decentralized 0% permission-less loss-less protocol all backed by mathematics.
Problem / Solution
The problem is that we are still not solving the issue of decentralized lending in the blockchain (barely addressed by flash loans) and people are looking more and more for stable long term winning investments with incentives to use our token as collateral to borrow money waiting for the token to raise in price later on when others default/sell. Also, users do not want to get into long term investments and lose important capital that they could use elsewhere in the meantime. Our protocol offers them the chance to keep their capital and also invest our tokens through 0% lending whenever they need the cash.
Detailed product description
The most important aspect of the project is its mathematics that never fail. Our token starts at a base price and the smart contract directly locks 95% of the funds for the lending protocol. Whenever a holder wants to lend or sell their initial SCRT (or stablecoin) would remain intact (-5% at first). Then when a portion of the people default on their loans (collateral returns to smart contract) or sells their tokens back to the smart contract,a portion of the remaining tokens(from the 5%) are kept to raise the base price of the borrowing (this means that other holders can now borrow and sell their tokens at 96% of their initial token capital), but the price of future tokens will also increase by 1% for future buyers. Locking 95% of funds directly will create a floor price that is unbreakable, since selling for lower will create a direct arbitrarge opportunity. Also any transfer that is not in direct contact with the smart contract will be subjected to a 1% fee that is also added to the total floor price to increase it. This will lead to a fast price increase due to the amount of sellers (even those that sell for a profit) and amount of transfers in a day. ww
Why 0% lending is important in decentralization?
Permission-less fee-less lending is vital in decentralization since it offers chance to investors in long-term projects to get access to liquidity, allows user to close their positions in futures before liquidations and also offer people that were rejected by banks a chance at fast lending for a good collateral.
Value capture for Secret Network ecosystem
Secret Network will be the first ever to introduce a protocol of this sort, and will benefit of the lockup of the SCRT in the smart contract during the borrowing period where people will be incentivized of keeping their SCRT locked up in the smart contract for our protocol tokens. Also, people will be able to borrow their SCRT at 0% fee multiple times, paying it back in SCRT, therefor a double influx of SCRT tokens is added to the ecosystem, where possible lenders will have to purchase SCRT to be able to close their positions.
Team members
Team's experience
We are all of the same region and have a lot of connections in the ecosystem to hire the best of the best.
Team Code Repos
Team LinkedIn Profiles
Development Roadmap
We will require 3 months to complete this project. We intend to have 4 developers full-time and 1 mathematics PHD part time, at a total cost of $60,000.
Milestones:
Milestone 1
Implement white paper with all mathematics and possibilities. We expect to have a detailed scientific whitepaper with all proof of the protocol and how it works, to incentivize future investments and proof of concept.
Milestone 2
Complete frontend + initial smart contract of the protocol. We will be working on frontend and backend at the same time to be able to speed up development while also keeping up meetings, podcasts and marketing from the front.
Milestone 3
Project goes live. This is where the open source contracts are launched. We will make sure to continue updating and migrating for further use if any issue occurs, but most of the work will be automatic from there.
Ideally, we can receive payments in 3 (or more) disbursements, one at the beginning of the grant, one after implementation of the second milestone and last payment when the development work is completed (can be divided into more if it feels more safe to the ecosystem).
We would be willing to consider part payment in SCRTs, up to 100%.
Additional Information