DefiDollar

DefiDollar DAO Token (DFD) buyback vault

Abstract

The DefiDollar team is proposing a DFD vault hereby referred to as the Interest-Bearing DFD (ibDFD) which is similar to the ibDUSD savings product. It also introduces protocol fee sharing and liquidity mining incentives for staked DFD.

Specification

  1. Users will deposit DFD tokens and get interest-bearing DFD (ibDFD) which are interest-bearing versions of DFD and can be transferred freely.
  2. This vault will have income sharing alongside ibDUSD i.e. it will receive a portion of yield (denominated in $DUSD) being generated from the underlying integrations with curve and the Yearn yUSD vault. We propose 50:50 revenue sharing to start with; open to be changed by governance in the future.
  3. The accrued $DUSD will be utilized to purchase DFD from the uniswap DFD/DUSD pool.
  4. This vault also receives a fixed weekly DFD emission that will be claimed in a pro-rated manner every time harvest is called on the vault. I propose to start with at least 20K DFD weekly emissions *(actual amount may vary depending on the allocation to other incentivized pools - tbd later).
  5. A user will be able to redeem their ibDFD for more DFD tokens that they deposited, as a result of protocol fee sharing and liquidity mining incentives baked in.
  6. The vault will have a 0.5% exit load to prevent front-running attacker vectors. This fee will accrue to other ibDFD holders.

So basically this vault acts as a DFD buyback machine.

Notes

A. The vault is a precursor to a full-fledged stability module that will come later. In a nutshell, staked DFD while bear the peg failure risk and hence get a share of protocol income + DFD emissions - Very similar to synthetix staking.

B. Procotol earns income from the following sources:

  • Trading fees generated on the integrated y curve pool.
  • The yield from the yUSD Peak
  • DUSD redeem fee — 0.1%
3 Likes

This is an excellent proposal and should be implemented as soon as possible.

Once it’s implemented, the DefiDollar DUSD-DFD ecosystem will have balance. Users will also be incentivized to HODL DFD and earn. It’s also put bullish pressure to offset the emission rate. As someone reiterated on Discord already, this has to be put in motion as soon as possible because it is damn hard to reverse sentiments when they turn sour.

I think the ball is really rolling here for this to be one of the leading stablecoins for DeFi. So let’s make it happen by ensuring sentiments stay positive among DFD holders. If we do that, then the sky’s the limit toward the recognition and adoption DeFiDollar deserves.

Nice write-up @atvanguard, let’s make it happen :wink:

1 Like