Pathway-as-a-Service: token pricing algorithmization for your DAO

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February 18th, 2022

A view on how Pathway can be implemented by DAOs existing on the market

🧬Pathway is a pricing algorithm used by ⚜️🏛𝔾ℂ DAO that conducts liquidity operations on AMM DEXs with the liquidity of its governance token GTON. This liquidity almost fully belongs to the DAO, which is an approach called protocol-owned liquidity (POL). 

In the traditional, passive approach to DAO-operated liquidity, the market value and the intrinsic value of a DAO token are correlated weakly. The market value stability can be disrupted by external noise, intricacies of traders’ behavior, as well as incomplete or asymmetric information.

On the other hand, algorithmic governance tokens such as GTON, can use proactive liquidity management strategies in order to smooth and stabilize the price of the token by linking it to an intrinsic value peg. Pathway protocol is a tool that DAOs can use to formalize a set of fundamental factors that influence the pricing of a token and establish a market making system that amplifies and sustains the correlation between intrinsic and market values.

⚜️🏛𝔾ℂ DAO uses 🧬Pathway to algorithmically peg GTON to a weighted sum of the tracked performance parameters of the DAO, such as total liquidity and volume. Through Pathway, $GTON becomes an algorithmic governance token (AGT), and thus the price of GTON will tend to stay within a specific corridor, while maintaining a correlation with the fundamentals voted by the DAO. On the whole, we see Pathway as one of the key features of GC which will distinguish it from other DeFi projects.

However, 🧬Pathway is not restricted in use to ⚜️🏛𝔾ℂ DAO. We fundamentally believe that in the future other DAOs will be able to use the same set of tools for their own algorithmization use-cases, through what we call Pathway-as-a-service. The exact details of this approach are still being discussed in the DAO, but we predict that the team behind 🧬Pathway will be providing paid services that involve the deployment of all the necessary infrastructure, including but not limited to: decentralized oracle networks with pricing feeds, smart contracts, liquidity intervention and arbitrage bots, and other elements of a 🧬Pathway system. 

🧬Pathway can be applied easily to those business models of the DAO that are not limited to managing and balancing a portfolio of assets, but oriented towards achieving some goals set for development of infrastructure and products, in order to increase the success metrics of the ecosystem as a whole. We believe that integrating such mechanics into a DAO can increase market efficiency and prosperity of the organization and its token holders through establishing positive feedback loops that correlate with the fundamental growth factors of the token.

Alongside with the pioneering implementation for ⚜️🏛𝔾ℂDao, 🧬Pathway will be integrated into different subDAOs that will be spawned within GCEco, such as Candy with $CANDY governance token and OGS with $OGS. Most importantly, Pathway-as-a-service will serve as one of the primary sources of income for the ⚜️🏛𝔾ℂ DAO Treasury.

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