DEUS improvement Proposal — 3

For the last five days after my blog post of V2, we have started in-depth Documentation on DEUS V2 we will release in the upcoming days, but together with the Documentation and already before I realized how big of a project this will become in the future.

I will now, in this proposal, lay out the foundation of changes needed to position the DEUS protocol so it can achieve the transition smoothly.

The too long didn’t read of this proposal:

Implement a fractional reserve of DEA of 25%

Implement a fractional reserve of DAI of 75%

(improve its TWAP with Muon, implement FailSafes like FRAX to avoid something that happened at IRON (Amos & scaleable Redeeming fees)

Buying DEI would burn DEA, based on Muon Oracle price.

Selling DEI would mint DEA, based on Muon Oracle price.

Install “Algorithmic Market Operations Controller” to unbreakable peg DEI to 1$.

https://docs.frax.finance/amo/overview

Quick example:

Trader A creates a 1000$ TSLA position. He pays 1000 DAI, 250 DAI gets swapped into DEA and burned, 750 DAI gets deposited into the DEI minting contract, the Trader gets a 1000 DEI TSLA position.

Now Countertrader B enters the game, he now takes a 1000$ TSLA short position to countertrade Trader A and farms his funding plus the arbitrary rewards that the system is paying out to Hedgers.

He also pays 1000 DAI, 750 DAI get deposited into the DEI minting Contract, 250 DAI are buying DEA from the Market and burning them.

Creating an individual Counterposition trade, when TSLA is rising 95%, the Countertrader B needs to either put up more collateral to hold the position or get Liquidated and the TraderA gets deleverage.

Trader A trade gets immediately listed again to be filled by a countertrade.

The Liquidator (potentially a Muon node) gets the 5% outstanding Collateral of the Countertrade as a reward.

Benefits for the DEUS ecosystem and Token holder

Remove the need for overcollateral of the Vaults, and create a more capital efficient system.

Incentivize traders and attract more of them by doing so.

Implement a Referral System to overall increase the awareness of DEUS

(referrals receive a percentage of all their referees’ fees & liquidations)

Have auto counter trading for Vault stakers, which will increase the APY for Vaults by several orders. They will be farming spreads + funding + arbitrary DEA rewards for taking the counterposition.

It also introduces the field for first “Contractor” like behaviors, which will make it easier to transition to V2.

Todos:

DEUS V1.2 — Stablecoin

-> release it as DEUS V1.2 with a big Staking event like in the early days of DEUS.

(time estimate of this will follow after proposal reaches quorum)

DEUS V1.3 — AccountManager Countertrading

-> release it as DEUS V1.3( From this moment, capital efficiency is several orders of magnitudes better, and APY will get another significant increase, decrease Inflationary rewards from here on.)

DEUS V1.4 — Leverage

DEUS V1.5 — Referral

DEUS v2.0–3rd Party Contractors

DAO member of DEUS Finance @lafayettetabor in telegram.