Overlay Community's (PCD holders, Litter Box 1 and Litter Box 2 participants, and Litter Box 3 registrants), DegenScore Beacon holders, and community members from selected DeFi protocols such as Gearbox, Element Finance, CoW Swap, Sense Finance, NFTPerp, Ambire Wallet and others, will be able to claim OVL tokens in a rolling basis starting March 1st, 17:30 GMT.
The whitelist has been sourced from the current members of the above communities, and a snapshot has been taken as of Feb 22. Overlay has collaborated with these protocols to ensure that qualified community members are on the whitelist.
To encourage the continued testing of Overlay, the claim contracts will have a limited number of tokens available. For DegenScore Beacon Holders, there will be 222 “seats” available, each address will be able to claim 10 OVL, on a first-come, first-served basis. Overlay community will have 200 seats, and all subsequent protocols will have 100 seats.
10 OVL may not seem like much, however it allows holders to participate in Overlay, vote in governance, and be a part of the Community Rewards Program. TLDR is if a user’s PnL on all positions at the end of Litter Box 3 is 100% or greater, community members can earn a Gold NFT, which will open up significant gates in the future. Silver and Bronze NFT’s are also available for lower PnL %’s.
Users must close all their positions before the end of Litter Box 3 to become eligible for reward NFTs. The final date will be announced at least one week in advance.
Users are able to bridge their tokens to Ethereum and use the protocol on Ethereum if they wish, as there will be slightly different markets on Ethereum versus Arbitrum. The final results of the Litter Box 3 reward program will include Ethereum. Claiming will only be available on Arbitrum.
There is no liquid market for OVL (no way to buy or sell, currently).
“Wait, what’s Overlay?”
If you’ve read this far, you may be asking yourself “Why would I want to spend my precious ETH to claim some OVL and then use my ETH to build positions on Overlay?”. It’s a good question, so let’s dive in.
Overlay is a new DeFi primitive that is solving the liquidity problem faced by today’s perpetual markets. Overlay does this by sidestepping the liquidity problems that all perpetual markets have. It does this by settling PnL in a native token, OVL, and does so without traditional counterparties or liquidity, thus Overlay can offer nearly any scalar data feed as a market for creating long or short positions with leverage, opening up available markets by a huge margin.
A recent study by Boston Consulting Group shows that tokenization of global illiquid assets is estimated to be a $16 trillion business by 2030. Overlay is already on the path to making a ridiculous amount of currently illiquid assets liquid.
Overlay allows OVL holders to build positions on nearly any scalar data feed you can imagine. With Overlay, community members can take OVL and lock it to a market as collateral long or short with leverage. Upon unwind of their position, the Overlay Protocol smart contracts either MINT new OVL and return this along with the original collateral back to the user, or BURN part or all of the collateralized OVL. To read more about the mechanism and to understand risks, our docs center is here:
The prior sandbox environments have seen a 10.7% BURN of circulating OVL over the course of just a few months.
Markets passed by governance:
**
Arbitrum:**
-*ETH/USDC (UniV3)
-BTC/USDC (Chainlink)
-BAYC floor (NFTPerp)
-LINK/USD (Chainlink)
-AVAX/USD (Chainlink)
-ApeCoin (Chainlink)
-SOL/USD (Chainlink)
-MATIC/USD (Chainlink)
-Gaussian Model (Siwa) *
Ethereum:
-ETH/USDC (UniV3)
-wBTC/USDC (UNIv3)
-BAYC Floor (Chainlink)
-angleEURO(UNIv3)
-Azuki (Chainlink)
-Punk (Chainlink)
-ClonEx (Chainlink)
-Doodles (Chainlink)
-MAYC (Chainlink)
Any pair on UniV3, any market on Chainlink, and any non-manipulable, non-predictable scalar data (ETH Burn rate, BTC Mining Difficulty, Twitter Sentiment, Earth’s Geomagnetic Field, Market on number of active users for a given platform, Gold Reserve, Esports statistics, Chess ratings of Magnus Carlsen, EU gas outages, Squeeth strategies, Yield rates, Funding rates on other perps…..the list goes on and on and on.)
*it’s important to remember that some data can be easily manipulated or predicted, ie. daily temperature in New York. These markets are not suitable for Overlay.
You can participate in Overlay Governance, you can create more OVL by being correct in your convictions (conversely, you can lose/burn your OVL by being incorrect), you can stake your OVL for rewards (forthcoming), you can hodl your OVL.
Overlay has been live on Eth Mainnet since October 7, 2022. There has been no liquidity for OVL itself (no place to buy/sell the token) so that the community can test this novel system. As things stand, the target date for a liquid market (and therefore full launch) is early April, 2023.
The rewards program for Litter Box 3 consists of point accumulation, which can be redeemed for Gold, Silver, and Bronze NFTs. To be eligible for rewards, users must collect a certain number of points as follows: 100 points for Gold, 33 points for Silver, and 10 points for Bronze. The points can be earned through the following means:
Opening a single position: 1 point (maximum of 3 points)
Unwinding a single position: 1 point (maximum of 3 points)
Total PnL is X% after the end of Litter Box 3: X points
Total PnL is -X% after the end of Litter Box 3: X/6 points
To ensure fairness, there are rules that must be followed. These include:
Earning 1 point from building a single position is limited to 3 points.
Earning 1 point from unwinding a single position is limited to 3 points.
The DAO has the right to exclude any wallets, traders, community members, and addresses that attempt to exploit the Litter Box 3 rewards program.
Any conduct by participants that is deemed unlawful, malicious, or criminal in nature will result in immediate disqualification from the program.
**It is important to note that participation in Litter Box 3 is voluntary and rewards are not guaranteed. The program may be canceled at any time. Participants are responsible for their own gas fees, and there is no guarantee of any gains, especially financial ones. The rewards program is for testing purposes only as Litter Box 3 is a test environment in production, and there may be significant bugs. The token and all contracts may need to be redeployed if any issues are found.