VADER PROTOCOL: Incentivised Liquidity, Stable coin and Lending platform

WHAT is VADER?

VADER is a liquidity protocol that combines a collateralized stable coin with liquidity pools. The stable coin, USDV, is issued by burning VADER tokens, which is issued by burning VETH tokens. Liquidity pools use USDV as the settlement asset. A daily emission rate of VADER funds liquidity incentives, a protocol interest rate, and impermanent loss protection. Pooled capital can be lent out by borrowers, who lock collateral such as pool shares or VADER. The collateral is used to pay an interest rate which is added into the pools to increase returns.

In short - the Vader Protocol will incentivize liquidity pools with continual dividends, impermanent loss protection for liquidity providers, and allow holders of collateral to borrow assets out of the pools. It is being built with the long-term in mind

KEY FEATURES

  • Uses a collateralized stablecoin settlement asset
  • Holders of VADER can burn their VADER to mint USDV, driving value accrual into VADER
  • Holders of USDV can earn interest by locking up USDV tokens
  • Impermanent Loss protection for Liquidity Providers in the pools
  • Incentivised pools that receive continual dividends
  • Holders of collateral can borrow assets out of the pools

HOW TO ACQUIRE VADER?

The genesis supply of VADER can only be acquired by burning VETHER 1:1. There will be no other way to acquire VADER ahead of time. After launch, VADER can be bought thru its own pools. VADER and USDV will both be liquid and do not need CEX or any other liquidity protocol.

WHAT IS VETHER?

VETHER: A strictly-scarce Ethereum-based asset.

  • VETHER is designed to be a store-of-value with properties of strict scarcity, unforgeable costliness and a fixed emission schedule.
  • VETHER mimics characteristics of Bitcoin where miners compete to expend capital to acquire newly-minted coins and chase ever-decreasing margins.
  • Instead of expending capital, VETHER participants compete to purchase it by destroying capital on-chain.
  • As a result, all units of VETHER are acquired at-cost and by anyone. This mechanism is called Proof-of-Value.

HOW TO ACQUIRE VETHER?

VETHER can only be acquired (mined) by destroying Ether. All assets are destroyed by sending them to an unspendable Ethereum address.

Emission Period

Vether is auctioned off in Days of around 23.5 hours. 244 Days make up 1 Era. The 12th Era is 1064 Days long and the total Emission Period is 10 years. The overlapping time periods ensure Day and Era changes happen across different time periods and seasons globally. The Emission begins with 2048 per day, which halves each Era until it is 1 Vether per day in the 12th Era. After exactly 10 years the total emitted supply of Vether will be exactly 1,000,000 and cannot ever be increased.

Network Fee

Each transaction of Vether incurs a small fee of 10 basis points, which is returned to the contract. These fees accrue and will be emitted only after the Emission Period, at 1 Vether per Day. At a monetary velocity of 1, enough fees accrue in the first 10 years to power emissions for another 30 years. At higher velocities, the fee acts as a deflationary force.

Stock-To-Flow

Vether begins with a stock-to-flow of 1 that doubles each Era to be 2670 after 10 years. Since all units are acquired at-cost and emitted continuously, if Vether develops a market the halvings will function to reduce supply and increase value. This will reinforce Vether as a store-of-value. After the Emission Period, accrued fees provide on-going flow that fixes the stock-to-flow at a minimum of 2670 indefinitely. Thus, as long as there is economic activity, Vether can absorb value from Ethereum-based assets in perpetuity.

Conclusion

Vether is a strictly-scarce asset that has a fixed emission schedule and can only be acquired at-cost. Halvings are built in to the emission schedule to target a stock-to-flow of 2670 after 10 years. Beyond 10 years accrued fees power the emission, and thus the contract will run for as long as Ethereum exists. If Vether attains a monetary premium it will become one of the most valuable assets on the Ethereum network, with the widest and fairest distribution.