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SORA network development public Request for Proposal development process
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[RFP]: Introducing XDBT the Buying & Selling of Time-Locked Synthetic Wrapped Debt on Polkaswap #99

Open porkchop315 opened 6 months ago

porkchop315 commented 6 months ago

Proposal Due Date

09/01/2024

Proposal Overview

The proposal introduces two distinct utilities within the SORA ecosystem: time-locked synthetic wrapped debt and synthetic tokens based on that debt, each offering unique benefits:

Time-Locked Synthetic Wrapped Debt: Diversified Investment Opportunities: By offering commitments of locking various Tokens (XOR, PSWAP,BTC, ETH, DOT, KSM, TBCD, KUSD, KEN,KARMA, KAUG) spanning 3 years, 6 years, and 9 years, time-locked & in return receive a % yield on a 30, 60, 90, day pay out cycle while in return Polkaswap can offer the trade of synthetic wrapped debt which provides investors with diverse investment options. This allows for tailored investment strategies and longterm planning within the SORA ecosystem.

Stable Yield Generation: Investors can benefit from stable yield generation on a monthly basis, providing a predictable income stream. This stability can attract risk-averse investors seeking consistent returns over time and contribute to ecosystem liquidity.

Enhanced Financial Planning: The time-locked nature of the debt instruments enables investors to plan their finances more effectively, aligning with their long-term investment goals and risk preferences.

Synthetic Tokens Based on Debt (XDBT): Speculative Trading Opportunities: Synthetic tokens based on debt introduce speculative trading opportunities within the SORA ecosystem. Traders can engage in speculative activities based on the value of debt instruments, potentially capitalizing on market fluctuations and price movements.

Diverse Trading Strategies: XDBT tokens enable traders to diversify their trading strategies beyond traditional assets. This introduces a new dimension of trading complexity and flexibility, appealing to traders seeking alternative investment opportunities.

Market Liquidity Enhancement: The availability of synthetic tokens based on debt can enhance market liquidity on Polkaswap, attracting more traders and liquidity providers to the platform. This increased liquidity benefits all participants by facilitating smoother trading operations and tighter bid-ask spreads.

By offering both time-locked debt and synthetic tokens based on that debt, the proposal provides investors and traders within the SORA ecosystem with a range of financial instruments catering to different investment objectives and trading preferences.

Proposal Goals

The goal of the proposal is to introduce a new financial instrument within the SORA ecosystem by enabling the buying and selling of time-locked synthetic wrapped debt on Polkaswap, along with the secondary utility of synthetic tokens (XDBT) based on that debt. This proposal aims to address several key problems and achieve the following objectives:

Diversification of Investment Options: By introducing time-locked synthetic wrapped debt with commitments spanning 3 years, 6 years, and 9 years, the proposal aims to provide investors with a wider range of investment options. This addresses the problem of limited investment choices within the SORA ecosystem and allows investors to diversify their portfolios according to their risk preferences and investment goals.

Stable Yield Generation: The proposal seeks to offer investors stable yield generation opportunities through time-locked synthetic wrapped debt, providing a predictable income stream on a monthly basis. This addresses the problem of income volatility and uncertainty faced by investors, especially in decentralized finance (DeFi) markets, by offering a reliable source of passive income.

Speculative Trading Opportunities: Through the secondary utility of synthetic tokens (XDBT) based on the time-locked debt, the proposal aims to introduce speculative trading opportunities within the SORA ecosystem. This addresses the problem of limited trading options and market activity by providing traders with alternative assets to speculate on and trade, potentially increasing market liquidity and trading volume on Polkaswap.

Enhanced Market Efficiency: By enabling the buying and selling of time-locked synthetic wrapped debt and synthetic tokens, the proposal seeks to enhance market efficiency within the SORA ecosystem. This includes improving price discovery, increasing liquidity, and fostering a more dynamic and active trading environment on Polkaswap, ultimately benefiting all participants by providing better access to financial instruments and trading opportunities.

Overall, the goal of the proposal is to expand and diversify the range of financial products available within the SORA ecosystem, provide investors with stable yield generation opportunities, introduce speculative trading opportunities, and enhance market efficiency. By addressing these key objectives, the proposal aims to contribute to the growth and development of the SORA ecosystem while addressing the needs and preferences of investors and traders within the community.

Scope of Work

Implementing the proposal to enable the buying and selling of time-locked synthetic wrapped debt on Polkaswap, along with the secondary utility of synthetic tokens (XDBT), within the SORA ecosystem involves a significant scope of work across various domains.

Smart Contract Development: Develop smart contracts for creating, managing, and redeeming time-locked synthetic wrapped debt instruments.

Implement functionality for locking funds for specific time periods (3 years, 6 years, 9 years), calculating yields, and distributing monthly payments to investors.

Develop smart contracts for creating and managing synthetic tokens (XDBT) based on the underlying time-locked debt instruments.

Protocol Design and Development: Design the protocol for issuing and trading time-locked synthetic wrapped debt on Polkaswap, including mechanisms for price discovery, order matching, and settlement.

Develop protocols for managing the secondary utility of synthetic tokens (XDBT), including mechanisms for fractionalizing debt, trading, and redeeming tokens.

User Interface Enhancements: Update the user interface of Polkaswap to support the buying and selling of time-locked synthetic wrapped debt instruments.

Design intuitive interfaces for investors to browse available debt options, lock funds, and monitor their investments. Develop user interfaces for traders to buy and sell synthetic tokens (XDBT) based on the underlying debt instruments, providing access to speculative trading opportunities.

Regulatory Compliance and Legal Considerations: Conduct legal research and analysis to ensure compliance with relevant laws and regulations governing financial instruments, securities trading, and DeFi activities.

Develop compliance frameworks and risk management policies to address regulatory requirements and mitigate legal risks associated with offering and trading debt instruments and synthetic tokens.

Security and Risk Management: Conduct comprehensive security audits of smart contracts, protocols, and user interfaces to identify and mitigate potential vulnerabilities and security risks.

Implement risk management mechanisms to protect investors' funds and ensure the security and stability of the platform, including measures for addressing counterparty risk and market volatility.

Liquidity Provision: Develop strategies for incentivizing liquidity provision on Polkaswap for time-locked synthetic wrapped debt instruments and synthetic tokens (XDBT).

Implement mechanisms for managing liquidity pools, providing liquidity incentives, and maintaining market depth to ensure smooth trading operations and price stability.

Community Engagement and Education: Engage with the community to gather feedback, address concerns, and promote awareness of the new features and opportunities available within the SORA ecosystem.

Provide educational resources, tutorials, and documentation to help users understand how to participate in buying, selling, and trading time-locked synthetic wrapped debt instruments and synthetic tokens effectively.

Integration with the SORA Ecosystem: Integrate the new features seamlessly with existing components of the SORA ecosystem, including the Polkaswap decentralized exchange, SORA Wallet, and other DeFi protocols.

Ensure interoperability and compatibility with other projects and platforms within the Polkadot ecosystem to leverage synergies and maximize the reach and impact of the new features.

The proposal to enable the buying and selling of time-locked synthetic wrapped debt on Polkaswap, along with the secondary utility of synthetic tokens (XDBT), within the SORA ecosystem requires a coordinated effort involving smart contract developers, protocol engineers, user interface designers, legal experts, security professionals, community managers, and integration specialists. It also involves thorough testing, regulatory compliance, and ongoing community engagement to ensure the successful launch and adoption of the new features within the SORA ecosystem.

Current Roadblocks and Barriers to Success

While the proposal to enable the buying and selling of time-locked synthetic wrapped debt on Polkaswap, along with the secondary utility of synthetic tokens (XDBT), presents several opportunities for enhancing the SORA ecosystem, it also brings forth various considerations and potential challenges:

Market Dynamics and Volatility: The backing of the debt by real-world assets, goods, or services such as carbon credits and metal alloys offers a solution to mitigate the impact of market dynamics and volatility on the value of synthetic tokens (XDBT). By anchoring the value of the tokens to tangible assets, the proposal provides stability and intrinsic value, reducing the susceptibility to price fluctuations. Additionally, transparent asset verification mechanisms can enhance investor confidence and mitigate uncertainty.

Regulatory Compliance: Navigating regulatory considerations and compliance requirements is crucial for implementing the proposal. Ensuring that the backing assets comply with relevant laws and regulations governing asset-backed securities and financial instruments is essential. Transparent documentation and verification processes can facilitate compliance and mitigate legal risks associated with offering and trading synthetic tokens within the SORA ecosystem.

Security and Risk Management: Robust security measures and risk management mechanisms are vital for protecting users' funds and ensuring the stability of the platform. Thorough security audits, secure coding practices, and continuous monitoring for vulnerabilities are necessary to safeguard against potential risks and security breaches. Additionally, implementing mechanisms for asset quality assurance and transparent asset tracking can enhance security and mitigate risks associated with asset-backed tokens.

Liquidity Provision: Adequate liquidity provision is essential for facilitating smooth trading operations and maintaining market stability. Developing effective liquidity provision strategies, incentivizing liquidity providers, and implementing mechanisms for managing liquidity pools are crucial steps. Ensuring transparent liquidity reporting and monitoring mechanisms can help prevent liquidity shortages and market manipulation, enhancing overall market efficiency.

User Education and Support: Providing comprehensive user education and support is essential for ensuring that investors and traders understand how to participate effectively in buying, selling, and trading synthetic tokens. Developing educational resources, tutorials, and documentation, as well as offering responsive customer support, can help address user inquiries and concerns, fostering trust and confidence in the platform.

By addressing these considerations and challenges, the implementation of the proposal can be navigated effectively, maximizing the benefits while mitigating potential risks and ensuring the successful integration of new features within the SORA ecosystem.

Evaluation Metrics and Criteria

Technical Implementation:

Smart Contracts: All necessary smart contracts for enabling the buying and selling of time-locked synthetic wrapped debt and synthetic tokens (XDBT) are developed, audited, and deployed on the blockchain.

Protocol Development: The protocols for managing time-locked debt instruments, trading on Polkaswap, and secondary utilization of XDBT tokens are designed, implemented, and tested for efficiency, security, and reliability.

User Interface: The user interface of Polkaswap and other relevant components are updated to support the new features, providing users with intuitive access to time-locked debt instruments and synthetic tokens.

Regulatory Compliance: Compliance Framework: A comprehensive regulatory compliance framework is established, ensuring compliance with relevant laws and regulations governing financial instruments, securities trading, and decentralized finance (DeFi) activities.

Legal Documentation: Necessary legal documentation, including terms of service, privacy policies, and risk disclosures, are prepared and made available to users, addressing regulatory requirements and legal risks associated with the new features.

Security and Risk Management: Security Audits: Smart contracts, protocols, and user interfaces undergo thorough security audits to identify and mitigate potential vulnerabilities and security risks.

Risk Management Mechanisms: Robust risk management mechanisms are implemented to protect users' funds and ensure the stability and security of the platform, including measures for addressing counterparty risk, market volatility, and liquidity constraints.

Liquidity Provision: Market Depth: Adequate liquidity is provided on Polkaswap for time-locked synthetic wrapped debt instruments and synthetic tokens (XDBT), ensuring smooth trading operations and market stability.

Incentive Mechanisms: Strategies to incentivize liquidity provision and active participation in trading activities are implemented, encouraging liquidity providers to contribute to the ecosystem.

User Education and Support: Educational Resources Comprehensive educational resources, tutorials, and documentation are provided to help users understand how to participate effectively in buying, selling, and trading time-locked debt instruments and synthetic tokens.

Customer Support: Adequate customer support channels are established to address user inquiries, provide assistance, and resolve issues related to the new features, ensuring a positive user experience.

Submission Requirements

Technical Feasibility: The submission should demonstrate the technical feasibility of implementing the proposed features within the existing infrastructure of Polkaswap and the broader SORA ecosystem. This includes an assessment of the required smart contracts, protocols, and user interfaces, as well as any interoperability considerations with other components of the ecosystem.

Regulatory Compliance: The submission should address regulatory considerations and compliance requirements associated with offering and trading financial instruments and synthetic tokens within the SORA ecosystem. It should demonstrate an understanding of relevant laws and regulations governing securities trading, financial services, and decentralized finance (DeFi) activities, and provide a plan for ensuring compliance with these requirements.

Security and Risk Management: The submission should prioritize security and risk management, with plans for implementing robust security measures and risk management mechanisms to protect users' funds and ensure the stability and security of the platform. This includes measures for conducting security audits, implementing secure coding practices, and monitoring for potential vulnerabilities and security risks.

Liquidity Provision: The submission should address plans for ensuring adequate liquidity provision on Polkaswap for time-locked synthetic wrapped debt instruments and synthetic tokens (XDBT). This includes strategies for incentivizing liquidity provision, managing liquidity pools, and maintaining market depth to facilitate smooth trading operations and market stability.

User Education and Support: The submission should prioritize user education and support, with plans for providing comprehensive educational resources, tutorials, and documentation to help users understand how to participate effectively in buying, selling, and trading time-locked synthetic wrapped debt instruments and synthetic tokens (XDBT). It should also include plans for offering responsive customer support to address user inquiries and concerns.

Community Engagement: The submission should demonstrate a commitment to community engagement and participation, with plans for transparent communication, feedback mechanisms, and opportunities for community input throughout the implementation process. This ensures that the proposed features meet the needs and preferences of users within the SORA ecosystem and fosters a supportive and engaged community environment

Submission Method

Blockchain: Mainnet

Project Due Date

09/12/2024

Budget Amount

This is up to the discretion of the development team.