Please consider this document un-edited and grammatically incorrect.
In only used Grammarly for correcting spelling errors, there will be a professional writer looking over it next week, but until then:
This document purpose is solely to transport information in the best way I am capable.
Why use a continuous market maker?
The most honest answer would be, because we don’t think we are wise enough nor have enough data points to predict the needed Token Supply for DEUS at this time.
DEUS itself is a platform to create “Registrars” that mirror other assets. Anyone will be able to
- Create Registrars Contracts (Derivatives that mirror assets)
- Pay Ethereum and Mint Registrar Tokens with pre-created Registrar Contracts (minting is the process of creating a Token inside of a continuous contract)
So while DEUS is a Platform to create Registrar Tokens, DEUS itself is a Registrar mirroring all Registrars. You can think of it like the Genesis registrar. It will have some differences from other registrars and some advantages/disadvantages.
So the answer to why we chose a continuous market maker is simple, its the only thing that suits a protocol that needs to meet endless demand potentially.
DEUS is the Genesis Registrar
Every Registrar will be using a continuous market maker.
If DEUS supply is infinite, is my DEUS share being diluted then?
In a continuous token model, the total amount of token minted before it determines the Price. The Market Maker’s price movement counters the dilution of the single person DEUS.
The continuous weight variable defines the degree it gets countered.
100% continuous weight results in a static price.
10% continuous weight results in an exponential price movement, that crafted the term “Bonding Curve.”
The DEUS Bonding curve has two unique features:
- Static phase that transitions to a Bonding Curve
- A contribution that fills the DAO Reserve continuously to fund the project.
Let me explain these two unique Ideas in Detail and how they work:
Standard Bonding Curve:
Token Price = Bonding Curve Treasury / (Circulating Supply x Continuous Weight)
In our model, we also added a DAO Treasury to that equation.
The DAO Treasury gets filled on every DEUS sell. Currently, we are proposing a DAO reserve of 500 ETH. If the community thinks this is too much and should be changed, we will have the ability to vote.
Having a higher DAO reserve also means lower risk because we could still fund the project in times of less interest.
Having a lower DAO reserve only benefits trader that want to opt-in for a quick profit by buying and selling shortly after.
We have to decide as a community which amount is reasonable.
My votes will always be for the long term.
Rome wasn’t built in one day, and DEUS will not revolutionize the world of derivatives next week.
If we want this project to be successful, we have to go through hard & beautiful times.
We should be equipped to sustain the unsustainable.
Affects the DAO contribution the Price?
If the Bonding Curve Treasury determines DEUS’s Price and there is a percentage flowing to the DAO instead of the Bonding Curve Treasury, there is a price distance between buying and selling on the same axis.
Let’s call this the DAO Contribution gap.
We propose this gap at a maximum of 1% currently.
That percentage is also to be set by the community.
But it is also already not fixed at 1%. It decreases with every ETH that already flowed to the treasury.
Let me explain the math.
(Current DAO Holdings / Maximum DAO Reserve — 1 ) * Maximum DAO contribution gap percentage
We have current holdings of 250 ETH
The desired DAO Reserve is at 500 ETH
We set the Maximum gap to 1%
There would be a current percentage of 1% in place at the next buy, at DEUS Swap.
DAO contribution does not affect the person that BUY the DEUS. It would only affect the person that buys DEUS and sells them immediately afterward.
Deus token economics are designed to benefit long term contributors while disadvantaging short term traders in the beginning.
Current DEUS Swap implementation. Road to Bonding Curve and Transition Phase.
The current DEUS Swap contract is plain simple. It only mints DEUS for 0.63$.
Next week, we will deploy another script with all the math inside needed to calculate the bonding curve and the transition phase between static
100% Continuous Weight and our Continuous Weight Goal of 40%.
At Block 10,888 Million, this will automatically switch from 100% to the transition phase, which lowers the CW continuously with every ETH added.
To be continued in part II