In Defi you have idle assets and traditional LP tokens. We realize some users don’t want to deposit idle assets; Hence, why they are idle. This is because they do not want to take on the additional risk of impermanent loss which may come when being a liquidity provider. Because of this, we have decided to repurpose idle LP tokens instead. What this means is that a user can deposit their LP token into the protocol and forge HAID. This is our first decentralized investment vehicle that we are focusing on that will be completely composed and managed by the HAI DAMO ecosystem. Users who forge HAID will have the ability to provide liquidity with it on the secondary market and in return receive the HAID LP token. From there, they can stake this LP token to receive additional rewards. (there will be different staking contracts for each DIV). Through the staking contract, users will receive the underlying LP fees plus the HAID secondary fees as well. This means you are earning "double" the rewards. Simply put, two sets of pools , two sets of fees, double the yield. Best bit is that with a normal farm token, an attractive yield is unsustainable as it leads to significant sell pressure, as to why 80% of lp positions are not in profit, but because you’re generating real rewards the sell pressure is mitigated.
DAMOs Use Case
This is where DAMO comes into play. DAMO is the governance token that determines which LP tokens make up the "portfolio" and allocation adjustments needed to manage DIVs. We’ve introduced complex bribenomics to sustainably incentivize governance participation within the system. For instance, users vote with sDAMO which means they are always staked and earning rewards whilst participating in governance. A demand for DAMO will come as its positive expected value is for protocols to have their tokens within our DIVs, this is because we are driving deep liquidity to their secondary market. It is then in their best interest to buy large amounts of DAMO to swing the vote in their favor. Opening up the doors for MetaGovernance.
Bribe-economics
What protocols/whales can also do in order to influence proposals is donate to one side of the decision. For instance, we are voting to include ohm in $HAID, an ohm whale can donate ohm or any other token to the people who vote yes, this means they have earned real rewards for governance, this has not been done before. Rewards are distributed based off voting power not the amount of tokens you used to vote. This is inline with our REE (Rewarded, Engaged and Early) model which we shall now explore. When you stake damo you mint an nft, this will show the amount of votes you have and will slowly increase over time. This means that your voting power is always increasing to its total vote limit. That means that if you bought $1000 worth of DAMO now and staked it. 6 months later someone comes along with 10k worth and stakes it. You would still have more voting power then him, which means you have more influence and are therefore entitled to more rewards from the bribenomics.
Protocol Incubation
We also are forming a team to manage the treasury and more specifically incubate projects on behalf of the DAO. The purpose of this is to redistribute tokens from incubating protocols to DAMO stakers. Our target investments are generally productive assets in that they generate yield. This yield will allow for the flexibility of our multi asset reward system which will be utilized throughout the ecosystem to encourage participation. In the later life of the ecosystem, we will also be building a growth DIV, targeted specifically at small to mid-cap tokens with potential for explosive growth. This will be key in allowing our stakers to participate in driving deep liquidity to newer protocols.
This means users are incentivized to stake and remain staked, Otherwise they lose that voting power which has access to large rewards, as well as growth tokens. I cannot stress the importance of these rewards being real which can be sold/hodled in a sustainable manner, imagine getting eth and btc for participating, not just more of the governance token. Its classic game theory, we are incentivising you to be rewarded, engaged and early.
The HAI DAMO Value Proposition
Extraordinary and eye opening insights on the future of currency here. My wife may disagree but I consider DAMO a much better investment than a house at the moment
Insightful and superbly written. The progress being made in this space will power the financial system of our generation