Operation: Swallowtail - Treasury Bootstrapping Event
0xE90c
December 8th, 2021

To commence the birth of the [REDACTED] Cartel and the first of a four-phase mainnet rollout, the DAO will launch operation Swallowtail, a two-day treasury bootstrapping event (TBE) to ensure fair price discovery and sustainable treasury backing. This is the first opportunity for the general public to mint $BTRFLY to participate in the governance of the network. All proceeds will go to the [REDACTED] Treasury, a smart contract entirely controlled by $BTRFLY token holders. Please refer to this step-by-step guide on how to safely participate in the dutch-auction like TBE.

The 3 assets you can bond are:

  • CVX
  • CRV
  • OHM

The TBE will begin on December 15 at 12pm EST.

🦋

What is a TBE?

The concept of the Treasury Bootstrapping Event is an alteration of a dutch auction with a linearly falling price, with commitments being able to be made CVX CRV or OHM.

In this slight alteration of a Dutch auction, the price is set at a higher value per token than justified to mitigate against bots and descends over time, with the eventual price being settled on once all tokens have been sold. Practically, this means participants individually decide at which point they're happy with a token price and commit their funds - yet the auction continues until everyone is happy with the token price. This can be an active decision by a project, as often it leads to a lower total amount raised (and thus less treasury funding); however, everyone buying will be getting the cheapest possible token.

Bond Parameters

Unlike standard forks, which implement a floor value of 1 reserveToken per OHMForkToken, we will set floor prices to be equivalent to $1 worth of the given token - based on the 1-day SMA immediately prior to launch. While this may be unheard of in the realm of OHM forks, we have several reasons for implementing this custom valuation logic.

  • We are building reserves with assets which are non-stable and not strongly correlated with each other
  • Having an RFV that’s simultaneously 1 OHM ($500) and 1 CRV ($4) is ridiculous
  • CVX and CRV trade well above $1 and we want to generate treasury profit, without making bonders feel cheated by early investors

From a wide variety of reputable angels in the space aligned with both ours, Curve/Convex and Olympus vision, we have accrued roughly $1.25M to kickstart our treasury. We will use this funding to do the following :

  • Deploy $100K of raised capital to reserve $BTRFLY supply
  • Deploy $500K of raised capital to fund initial liquidity provision of OHM/BTRFLY
  • Deploy remaining capital to fund treasury

To prevent the seeding of liquidity before the end of the Treasury Bootstrapping Event, and diverting capital away from REDACTED, we are integrating a token freeze into the $xBTRFLY and $BTRFLY token contracts. This means that only authorized contracts can move these tokens.

This will limit user’s functionality to the following, in the first week :

  • Bonding

The following actions will be prevented :

  • Adding liquidity
  • Transferring tokens
  • Staking

Approvals will not be affected.

Bond Parameters

We would configure bonds such that their initial configurations share the following characteristics:

  • Auction starts: December 15th 12pm EST.
  • 100,000 total tokens available
  • 40,000 available for CVX
  • 30,000 available for CRV
  • 30,000 available for OHM
  • Starting bonding price (~$5000 , $500M MC)
  • Reserve bonding price (~$50, $5M MC)
  • 4% debt ratio at launch
  • Auction end: December 17th 12pm EST. (unless tokens sell out prior)
  • Token address: To Be Updated Post-Deployment

Determining a Final Price

We will launch liquidity a price decided by volume weighting the simple moving averages of the assets committed during the dutch auction. Simple moving averages are calculated during the period between auctions starting (1700 UTC wednesday 15th) and the launch of the protocol(1700 UTC friday 17th)

Volume Weighted Average Price
Volume Weighted Average Price

This will be calculated by collating bond event data, to gain the following data for each bond :

  • BondPriceUSD
  • Trade Value USD
  • Date

All bonds will be logged and their event data will be logged and processed using a tool such as Flipside

  • Price * amount of each given bond
  • Sum of (price * amount) of all bonds
  • Sum of amount for all bonds
  • VWAP

We will conclude Swallowtail by atomically :

  • Unfreezing the token
  • Use Treasury.mintRewards() to draw excess reserves to seed liquidity
  • Add liquidity on Sushiswap based on the VWAP price of the bonds, and the LIVE price of $OHM

How to participate?

As a user looking to participate in the TBE, you can navigate to our website where you will be faced with a similar UI experience to (1,1) in OlympusDAO. Above it, you can see a graph showing the current price of each asset to see what would be the price you are bonding at.

What's Next?

Following the 2-day period of Operation Swallowtail, we will seed liquidity for the $BTRFLY token, based on the volume weighted average bond prices of all bonds we launch. This liquidity will be used to seed a Sushiswap LP of OHM/BTRFLY. Post LP seed, the protocol will launch the second phase of mainnet, titled “Operation Red Admiral”. From that point onward, the bonds programmes offered Through Swallowtail will remain, however, they will be accompanied by a LP bond, in order for REDACTED to incentivise and take ownership of (OHM / BTRFLY) liquidity. With this second phase, the token will be unfrozen and be able to be traded on secondary markets such as the Sushiswap LP established by the DAO. There is still two phases to commence post Red Admiral, for a total of four.

  1. Swallowtail - Predetermined parameter launch focused on bootstrapping the treasury with core reserve assets.
  2. Red Admiral - Public, permissionless, DAO-governed launch of the $BTRFLY token with a focus on purchasing back our entire LP position on Sushiswap
  3. Blue Holly - Transition LP position into range Uni V3 position, expand out from the Curve wars into ████, ███, and █████.
  4. Orange Tip - Migrate codebase to an Olympus V2 model. Push all decision making from off-chain to on-chain governance.

About [REDACTED] Cartel

[REDACTED] DAO is complimentary subDAO for OlympusDAO which aims to extend OlympusDAO’s influence to the greater DeFi ecosystem in an efficient and sustainable manner without making OlympusDAO stray away from its initial values (being reserve currency for DeFi space). [REDACTED] DAO aims to achieve this by introducing the $BTRFLY token. When interacting with [REDACTED], a person holding a curve ecosystem token will bond their tokens through ‘metamorphosis’ and receive an equivalent amount of discounted $BTRFLY. By locking up curve ecosystem tokens to [REDACTED] DAO’s treasury, we are essentially reducing the supply of these tokens from the secondary market. The tokens will be further used to aggregate yield strategies to grow the treasury and increase both $BTRFLY and curve ecosystem token’s intrinsic value. $BTRFLY price will be determined by the concept of a dutch auction where discount increases if there is a lack of buyers and vice versa. [REDACTED] DAO will have similar rebase tokenomics to OlympusDAO. Users can stake $BTRFLY and in exchange they will receive $xBTRFLY. Every epoch, rebase rewards will be allocated to the stakers. While [REDACTED] DAO is focused on the Curve ecosystem, the DAO is looking to add more strategic risk assets, such as: ███, ███ and more.

The information provided in this Mirror Post pertaining to Redacted Cartel DAO, Inc. (“Redacted Cartel DAO” or the “Company”), its crypto-assets, business assets, strategy, and operations, is for general informational purposes only and is not a formal offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction and its content is not prescribed by securities laws. Information contained in this Mirror Post should not be relied upon as advice to buy or sell or hold such securities or as an offer to sell such securities. This Mirror Post does not take into account nor does it provide any tax, legal or investment advice or opinion regarding the specific investment objectives or financial situation of any person. Redacted Cartel DAO and its agents, advisors, directors, officers, employees and shareholders make no representation or warranties, expressed or implied, as to the accuracy of such information and Redacted Cartel DAO expressly disclaims any and all liability that may be based on such information or errors or omissions thereof. Redacted Cartel DAO reserves the right to amend or replace the information contained herein, in part or entirely, at any time, and undertakes no obligation to provide the recipient with access to the amended information or to notify the recipient thereof. The information contained in this Mirror Post supersedes any prior Mirror Post or conversation concerning the same, similar or related information. Any information, representations or statements not contained herein shall not be relied upon for any purpose. Neither Redacted Cartel DAO nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this Mirror Post by you or any of your representatives or for omissions from the information in this Mirror Post. Additionally, the Company undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed in this Mirror Post.

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