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Detailed explanation of the decentralized asset management agreement BlackHoleDAO

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The innovative extreme deflation model based on the agreement, as well as the Stake and Bond deflation model, have solved the problems of high inflation, insufficient liquidity, and user loss that have always appeared in the industry.

Original source: BlackHoleDAO

BlackHoleDAO is a decentralized asset management protocol based on DAO governance. On the basis of DeFi 3.0, a brand-new standardized model was built, called "BlackHole DAO Protocol (BHDP)". The BHDP destruction mechanism used traditional stock market split and merger principles to solve the gap between high inflation and deflation in the market. imbalance problem. Launched credit lending service based on DAOs.

Simply understand it as an asset management company service agreement, which includes split and merge functions, and based on the agreement itself, unsecured credit loan service .

Part of the 1.0 protocol

An important part of the protocol:

BHDP: BlackHole DAO Protocol (Black Hole Asset Autonomous Management Protocol)

BHDP extreme deflation formula: X-【X/(Y*H)】=Z

VC Pool: A fund pool with all high-quality Token assets

Donation Pool: An asset pool that can be invested by investment institutions, DAOs and individuals to obtain high returns.

DAOs: refers to various DAO communities

Transaction Fee Pool: transaction tax Cumulative asset pool

Black Hole Reactor: When a certain amount of BUSD is reached, the reactor will be opened

1.1 BHDP Design Highlights

BHDP is the full name of the BlackHole DAO Protocol, as can be seen from the above figure, the protocol is supported by a treasury, in which smart contracts connect VC Pool and Donation Pool, VC Pool supports multi-asset certificates to invest, part of which is used to destroy the BHO in the liquidity pool, and the other part is used for credit loans after successful investment in DAOs, and Donation Pool accepts investment institutions, DAOs teams Personal BUSD direct investment will eventually be returned in BUSD. The Transaction tax pool supports the operations of Donation Pool, DAOs community, Black Hole Reactor, etc.

3 ways of deflation in the protocol:

· 60% of Transaction tax is directly destroyed by BHO. This method of destruction is very common, but the proportion of BlackHole DAO Protocol destroyed is already very high in the DeFi field.

· 50% of the VC Pool is also used to destroy the BHO in the liquidity pool, which means that the more BHO in the Swap pool enters with the VC Pool, The more burned, the faster the currency price will be.

·The extreme deflation mechanism of the agreement means that it will be triggered in the event of extreme inflation:

When When the stock (BHO) in the market reaches a certain amount, the support rate is equal to 0. At this time, the deflation mechanism will be triggered, and the interest of Stake will gradually decrease according to a certain proportion. The proportion of stocks purchased through Bond (BHO) will gradually decrease. Secondly, the stocks (BHO) cast through VC Pool will also gradually decrease. If the support rate is less than 0, Stake will stop generating interest at this time. Bond and VC Pool The minting of new coins will be stopped, and the deflation mechanism will be triggered at the same time, and the stock circulation will be destroyed according to the time and corresponding ratio, until the support rate is greater than 0.

X-[X/(Y*H)]=Z

x: trigger The quantity when the mechanism is destroyed

y: destruction ratio

h: time (days)

z: the quantity when the support rate of destruction is greater than 0

On the whole, the economic model surrounding the protocol design is moving forward, and the business model is very distinctive. It is a set of models that are universally representative in the DeFi industry. The business is highly correlated. Among them, 3 types of deflation mechanisms have been developed The adjustment mechanism prevents the product from being adversely affected due to too much circulation in the early stage. This is also a problem that has always existed in this DeFi field, so the mechanism itself is remarkable. However, all this has yet to be verified by the market and is worth looking forward to.

2.0 cleverly uses the stake and bond principles in Olympus

Stake mining has always existed in the DeFi industry, but because of this, there has always been a problem of high inflation. Since Olympus quoted a high APY compound interest mechanism, almost many products have followed this mechanism. The user has achieved remarkable results, but it also failed to prevent the product from entering the death spiral, but it accelerated the speed of death.

2.1 Evolution of stake and bond

After OlympusDAO is pledged, the interest is minted according to The total circulation is calculated. With the increase of the number of pledges, the daily pledge interest is also increasing rapidly. There are a large number of pledge speculators flooding in, and it is inevitable that there will be such behaviors as profit fleeing; while BlackHole DAO Stake is based on the total amount of pledges. The casting ratio is dynamically adjusted, which means that when the market is in an inflationary situation, the pledge interest will gradually decrease, and when the market is in a tight state, the pledge interest will gradually increase. But it will never exceed the total pledge amount. The advantage of dynamic adjustment is that it is a free trade behavior in the market and avoids collective profit-fleeing behavior.

Calculation formula for pledge income:

< img src="https://image.blockbeats.cn/upload/2022-03-28/d6233b06be03fbcd178eeeb674c7d7e345275424.png">

Interest is calculated according to compound interest, which is presented through APY, which stands for annual rate of return. It measures the actual return on your principal by taking into account the effects of compound interest. The BHO you stake represents your principal, and due to the rebase mechanism, compound interest is added periodically every epoch (approximately 8 hours).

rebase happens 3 times a day and there are 365 days in a year, this will give 365* 3 = rebase frequency of 1095.

BlackHole DAO Bond looks the same as Olympusdao, both are designed to reserve treasury assets to support market circulation, and also to An effective way to supplement the liquidity pool, this mechanism is almost common in Defi3.0, including Ve(3 3) and Tokenmak have adopted this mechanism, so this mechanism has become a standard configuration in this field .

The essence of Bond is that users purchase securities through BUSD or the Token supported by the agreement. After the purchase is successful, the agreement will form BUSD into LP Added to the liquidity pool, LP directly enters the treasury, and at the same time mints the corresponding BHO to the user and DAO pool. But it needs to be locked for 5 days to get all of them.

However, BlackHole DAO has made some improvements based on the original bond mechanism. These improvements are actually the same as Stake, with certain innovations , a very strong reference value for the development of this field.

Improvements:

· Olympusdao is Token can be minted all the time, but BlackHole DAO dynamically adjusts the proportion of Token minted according to the inflation rate. When the inflation rate is relatively high, the proportion of BHO minted by Bond will gradually decrease. When the support rate is equal to 0, Bond will stop minting coins.

· There is a discounted price for purchasing Token through Olympusdao, but the purchase of Token through BlackHole DAO is the same as the market price, but you can save 15% transaction tax.

In fact, the most attractive or valuable point of these two points is that when the market circulation value is equal to the treasury value, Bond no longer It is the previous high premium minting, but the minting is stopped, indicating that before the market enters inflation, the proportion of minting channels will gradually decrease until the minting is stopped to prevent further shrinkage of assets during inflation.

For example: the U.S. dollar issued by the Federal Reserve has already been inflated, and it will not continue to issue U.S. dollars in essence. According to the previous logic of Olympusdao, users It is possible to obtain newly issued U.S. dollars from the Federal Reserve, but the cost of obtaining them will be relatively high. If the amount is huge, the influx of the market will further shrink the existing users who hold U.S. dollars. Therefore, the result of high premium coinage is that assets continue to shrink.

In summary, the improvement of BlackHole DAO Stake and Bond is innovative and iconic.

2.1 VC pool with all certificates

From the official The document reveals that the nature and concept of the VC pool is actually very clear, that is, it is defined as a "VC pool with certificates". Of course, the document describes it like this: [Any project Token entering the VC pool will be strictly reviewed by DAOs and screening will be allowed to prevent malicious behaviors from causing long-tail loss effects on potential assets, causing stock (BHO) to shrink and inflate, and will not be able to play a role in locking the Token project itself into the VC pool. If there is a long-curve growth trend like BTC, this will go against our original intention of establishing the VC pool, so any certificate that can enter the VC pool must have a long-curve growth trend. ]

From the content, we can see that the VC pool is the asset management business, and it may eventually become the most diverse digital asset management community organization. And relying on the professional ability of the members of the autonomous community to discover and recommend excellent and brand-new digital asset types to enter the asset pool. Once this method is established in the agreement, its imaginable space is very large. If there are many certificates to enter the VC pool, other The value also increases, and the final stock is reflected in the intrinsic value of the VC pool. It is conceivable that if the US stock market contains a lot of high-quality stocks, the US stock index will also perform very well, but it is a bit different from the US stock market. But in its operation, BlackHole DAO is all DAOs community behavior.

The certificates entering the VC pool can be non-Stablecoin, NFT, liquid LP and other valuable certificates, and when these certificates are in the VC pool After reaching a certain amount of assets, LP will be formed, and liquidity and LP lending services will be provided to third parties. All the proceeds will go into the VC pool to support the circulation value of the stock (BHO). Secondly, one of the potential values of the VC pool is to act as a credit lending pool, which is bound to the DAOs community, uses the DAOs community agreement to accumulate credit, and finally conducts unsecured loans based on the credit.

In addition, the VC pool also has a regulatory effect on the entire agreement

When the stock (BHO) is in a tight state, the proportion of the stock (BHO) cast by the VC pool will gradually increase

· When the stock (BHO) is in an inflationary situation, the proportion of the stock (BHO) minted through the VC pool will gradually decrease

· Passed VC pool casting stock (BHO) 50% of the assets entering the VC pool will be destroyed BHO in the liquidity pool. The other 50% will be reserved in the pool for DAOs community credit loans

3 Benefits are equal, 3.0 ensures a more reasonable distribution

BlackHoleDAO transaction tax is to prevent whales from causing malicious behavior and behavior on the disk The operation of the entire project provides financial support for the community and different DAO communities. Provides assurance for the eventual Black Hole Reactor and destruction.

Transaction tax: buy 15% (BHO), sell 25% (BUSD), the total tax will enter the transaction tax pool, and it will be shared by multi-signature addresses Guarantee the security of funds and settle weekly. The transaction tax will gradually decrease with the growth of liquidity until it is cancelled. Of course, all of this is for the better development of the project itself.

The distribution method of the transaction tax pool:

BUSD in 60% of the total transaction tax Directly enter the Black Hole Reactor, and BHO directly destroys

· (BUSD+BHO) 10% returns to investment institutions in the donation pool

· (BUSD+BHO) 10% enters the marketing wallet

·(BUSD+BHO)10% Development Team

·(BUSD+BHO)5%DAOs Community Ranking Reward

·(BUSD+BHO)3 %DAOs Community Investors

· (BUSD+BHO) 2% Individual Investors

4.0 Reverse investment, adapting to different groups of people

A stable investment method has been introduced for all users, divided into three different Investment methods:

Investment institutions

The investment amount starts from 10000BUSD, and you can get the transaction tax (BUSD+BHO) 10% double return, after the end of the return period, the income will stop. After the investment is successful, it will be displayed in the display area. Investment institutions can edit their own names and logos, and all this data will be saved on the chain.

DAOs Community

The investment amount starts from 1000BUSD, and you can get transaction tax (BUSD+BHO ) 3% double return, after the end of the return period, the income will stop. After the investment is successful, it will become a DAOs community advocate by default, and the corresponding invitation connection will be authorized. Through link sharing, you can form your own DAO community. The DAOs community will receive 10% of the DAO pool + 5% of the transaction tax. At the same time, the name and logo of the community tribe will appear in the official display area. The DAOs community can obtain unsecured credit loans from the VC pool according to their final credit value. DAOs community investors can edit their own name and logo, and all this data will be saved on the chain

Personal

From an investment amount of 100BUSD, you can get a double return of 2% of the transaction tax (BUSD+BHO). After the return period ends, the return will stop. After the investment is successful, it will be displayed in the display area.

5.0 Black Hole Reactor ( Black Hole Reactor)

The essence of the black hole reactor is a bit like the prize pool set by the project at different times. 60% of the tax. By default, when the market circulation reaches 10 billion BHO and the reactor amount reaches 100 million BUSD, the reactor will be opened. Of course, there may be many stages of reactors with different amounts. Perhaps the second phase reactor amount will be 10 billion BUSD.

For special reasons, its reactor also sets several additional opening rules

· When the market circulation triggers the black hole protocol mechanism and finally deflates to 10 billion BHO and the reactor amount reaches 100 million BUSD, the reactor will be opened

Regardless of the result, 3 years After the expiration, the black hole reactor will be opened

During the casting process, the black hole reactor will be opened when the 100 million BUSD is full, and the casting will stop

6.0 Summary

On the whole, the design of the BlackHoleDAO protocol is actually linked by the economic system between different business modules. The design concepts in the protocol such as VC pool and black hole reactor are outstanding. The most important thing is the extreme deflation model based on the protocol. And the Stake and Bond deflation model, which is very cutting-edge in the entire DeFi field and represents versatility, and solves the problems of high inflation, insufficient liquidity, and user loss that have always appeared in the industry. Whether it can develop in this field in the end still needs to be verified by the market.