Background:
When it comes to DaaS platforms, sustainability and platform flexibility are often significant areas of weakness. One issue that stands out most is the unsustainable daily reward rate that projects initially launch.
Projects often realize that runway with current rates is unsustainable soon after launch, so they decide to reduce rewards. However, when trying to solve this retroactively by reducing rewards after, rather than before launch, many unintended consequences occur, including incentivizing old holders to cash out, penalizing recent holders who bought in before announcements of reductions are made and increasing the risk of the token price not holding at a floor where the majority of users can break even on a dollar cost basis.
As for flexibility, often, node projects are strict in the type of assets required to create a node, with most offering only the native token and sometimes a stablecoin or lp as options.
These are unsatisfactory.
While lp tokens and USDC bonds can help boost a treasury, alone, they don’t do much to bring value to the native token. Moreover, once the onboarding of new users slows, new money coming into the treasury begins to come to a halt. However, multiple asset types are needed for a truly derisked treasury, and multiple strategies need to be employed to ensure consistent streams of external revenue that bring backing to the token price.
Projects often try to solve the revenue dilemma by using monthly maintenance fees and other internal measures, but this ultimately depends on the willingness of existing users to maintain their nodes — so it still essentially follows a ponzinomic model.
We feel there is a much better approach to solve some of these issues.
Our approach uses yield vaults with active strategies that generate a consistent asset return on asset. These yield vaults are similar to yearns, running unique strategies designed to maximize the yield of deposited assets. These vaults are created by incentivizing users to create different “types” of nodes by contributing to pools of different tokens in specific ratios (in exchange for varying rewards). We then allow users to “combine” these nodes with other types of balancer-pool nodes for even greater rewards, incentivizing the creation of several multi-asset pools, all of which are employed with dedicated strategies in our yield vaults. This is done using balancer pools that users can zap into using USDC.
This allows external revenue to be consistently generated by the treasury, independent of internal measures such as fees, and incentivizes users to continue investing in the platform.
What exactly is potion and what makes you different ?
Potion is an Enchanted Defi-As-A-Service Plaform(DaaS) on Avalanche.
On our platform, users will be able to create magic potions (NODES) using lp tokens, single sided tokens, or a combination of tokens — using a balancer pool. Mixed potions can be created by providing several tokens in specific ratios to each other in order to undertake specific investment strategies, with rewards (rates and types) differing depending on the tokens provided.
These can be magically combined to create multiple yield bearing cauldrons. All potions will be transferrable nfts
Cauldrons are a hyper-node — essentially a node made up of other nodes whose composition determines its reward rate. Different types of cauldrons, with varying rewards, can be produced with different combinations of potions. Combining these potions will create cauldrons with increased rewards, that vary depending on the type and number of potions used.
Unlike other platforms, we’ll also have flexible micro-potions that can be made with any amount of tokens, whose size can change and whose rewards can be compounded onto itself until it reaches the minimum size of at least 10 spell, after which it can be upgraded to a “full” potion.
Although we share a similar theme to Elixir, we are entirely separate. What we are building can best be considered a cross between Strong + Cubo + Balancer. Simply, Potion’s idea is to use native tokens+balancer pools+lp tokens to zap potions into different yield-producing vaults, with gamified elements that encourage exploration of different combinations of assets in the search for maximum yield.
Potionomics and Protocol Mechanics:
Tokenomics are still being fleshed out and are subject to change. Rather than receiving a flat 1%/day as seen in other strategies, we’ll be using an incentivized model with different rewards and rates.
Tentatively, this will look as follows:
Total Supply: 500,000 SPELL
Presale Price: $10 / SPELL
Public Price: $7.5 /SPELL
Wallet Limits: 5,000 SPELL/wallet or the equivalant in potions.
Potion Types:
Spell Only: 10 Spell @ 1% daily
Spell/USDC LP: The equivalent to spell only in terms of dollars, but at 1.1% daily. Supply half spell and half usdc. You’ll be able to zap into lp tokens using usdc in a single step directly on the app.
Single Tokens:
The dollar equivalent in various tokens can be used to create potions at a variable discount.
The discount rate for single tokens will vary depending on the token and amount held by the treasury.
The equivalent amount of tokens equal to the dollar value of 10 spell @ 1% daily
USDC Only — The equivalent to spell only in terms of dollars but at 15% discount
wAVAX — The equivalent to spell only in terms of dollars but at a 10% discount
wETH and wBtc and other tokens will be added later down the line.
Mixed Potions:
Mixed potions are balancer pools that can be created by providing several tokens in specific ratios to each other in order to undertake specific investment strategies, with rewards (rates and types) differing depending on tokens provided.
An example of a mixed potion might be something like 25% usdc 25% wavax 25% weth and 25% crv.
You’ll be able to instantly zap into the specific tokens required for a mixed potion using a zap feature on the app by just providing usdc.
Micro-Potions:
Any amount @ .50% — .75% daily.
Rates are determined by the type of micro-potion created (spell-only, lp tokens, single tokens..)
Can’t afford to create a full potion? Use any amount of spell or the market-value equivalnt of other tokens to create a potion of any size, albeit with a reduced reward rate.
Cauldrons:
Cauldrons allow you to combine multiple potions together to boost rewards. The overall boost you receive will depend on the type and number of potions you add to a cauldron. Say you have ten spell-only potions, every 10 potions you have can be used to create a cauldron. This will boost you’re daily rewards by 10% per every 10 potions. So for a cauldron of 10 spell-only potions, you’re daily rewards rate would be 1.1% daily. For a cauldron of 50 spell-only potions, you’re daily rewards rate would be 1.6% daily, for 100 potions, 2.5% daily etc…
We’ll all be providing rpc endpoints through chainstack at launch, available to both users and developers.This will allow faster transactions and access to the AVALANCHE blockchain.
As for transferability, we may do something unique if potions are to be tradeable as nfts, since we dont want people to be taking their mixed potions and selling them on 3rd party nft marketplaces and undercutting the platform. Basically, we may only allow a speficic number of mixed potions of a given type to ever be created, and after this point enable transferability once all potions of a given type have been minted. This would be a plus for the protocol since people wouldnt be undercutting us and it would also provide an element of scarcity to the potions.
Potion Governance
At potion, we intend to use a decentralized governance model when it comes to major decisions. We’ll be incorporating governance features to allow potion to operate independently of the potion team, enabling stakeholders to vote on specific investments and treasury allocations and other decisions that impact the future of our platform, with votes weighted based on the number of potions held. This is possible since potions are erc721 tokens and are fully addressable. This will be done via snapshot.org.
Safety & Transparency:
We know the space is filled with bad actors that have betrayed the trust of project backers and users. For this reason, prior to our presale and launch, the project lead will be doing a KYC (private dox) with Assuredefi.
We will also be using multisig gnosis vaults to manage the treasury (and liquidity, if needed). A 3-way multisig will be used, with two signers from the potion team and one signer nominated by the community
Security
Lately, many projects have chosen to launch without first getting an audit. This pattern is typical but unfortunately poses a significant risk to investors. Recently, one well-known node project, which was not audited before launch, had a vulnerability exploited in which users could spoof the price for bonding, effectively allowing the attacker to set the token’s value to zero and create thousands of nodes. This was quickly patched; however, had the contract been audited from the getgo, the vulnerable function calls may have been noticed and fixed before release, avoiding the headache faced altogether.
For this reason, especially given the complexity of what we are trying to do, Potion will be getting an audit from coinscope before launch. Additionally, our code & all contracts will be published on GitHub for all to inspect, and we will have a responsible disclosure bug-bounty program.
NFT Presale:
Mid Q1 2022
TBD. Between February 24th — March 14th
Our NFT sale will work similarly to Valifi’s.
In the presale, for those whitelisted, users will be able to purchase nfts that give a guaranteed allocation of Spell tokens and Potions at a fixed price. Buying an NFT will give them the right to purchase up to certain amount oof cauldrons at the presale rate( each cauldron is made up of 10 potions minimum, and each Potion is made up of 10 SPELL).
The max cauldron buy limit is TBD. We’re still fleshing out the max number of cauldrons that a whitelisted user should be able to buy from the presale. We definitely want to reward early supporters/ people who we’re whitelisted, but at the same time not make it so that they own a disproportionate percentage of the supply of spell. Exact numbers will be released soon.
Launch and Public Sale:
End of Q1 2022
TBD. Between March 14th — March 28th.
More details, such as an updated roadmap with pricing details and specific dates, will be communicated via Discord and our site.
Token Distribution:
Team wallet 7.5%
Marketing and Development 5%
Treasury and Reward Distribution: 70%
Liquidity: 17.5%
Our Roadmap:
- Launch On Discord and Other Social Channels
- Open up whitelist with on Discord and work on community building.
- Release Site & at https://potion.financial and first medium article/litepaper
- Release whitepaper with a detailed timeline
- Audit Contracts with Solidity.Finance or Coinscope
- KYC with Assuredefi
- Audit with Coinscope
- NFT Presale
- Release Dapp with single, lp, and mixed potion functionality. Release the first three cauldron types — spell only, lp, and the first mixed type (balancer pool).
- Public Launch. Allow whitelisted users to buy a guaranteed allocation at the fixed presale rate. Add initial liquidity to treasury and open up buying to the public. Additional details concerning launch will be released in the future to address antibot measures, whale taxes, transaction taxes, and initial buying limits.
- Continue to expand the protocol and its features. Focus on marketing and outreach efforts and growing all social channels.
A more detailed roadmap with pricing info and finalized dates will be communicated via Discord and shared on our site.
Stay tuned!
