The time has finally come. Redacted v2, which includes a new BTRFLY token and rlBTRFLY, are ready for launch. This change will complete Redacted’s transition from a bond-centric, dilutive token model to a model focused on producing real yield for rlBTRFLY holders.
On August 8, 2022, holders of the BTRFLY v1 token will need to migrate to the new BTRFLY v2 token. From there, users will be able to lock their BTRFLY v2 tokens as rlBTRFLY for 16-17 week epochs and earn revenue (paid in ETH) plus BTRFLY inflation (i.e. pulse) emissions.
We outline all action items in detail below.
The Redacted ecosystem is a product suite of smart contracts empowering on-chain liquidity, governance, and cash flow for DeFi protocols. We’ve built two core products in line with this mission, Pirex and Hidden Hand, which are described later in the report. Stay up to date with Redacted here.
Since the start of the quarter, the market situation has evolved drastically. However, our treasury remains strong, productive, and continues to allow us to solidify our position in the market.
Revenue diversification, particularly in down markets, is of the utmost importance.
Over the past few weeks, a number of DeFi treasuries have swapped out of their native protocol tokens into productive, or risk off, assets. Here at Redacted, we’ve always put an emphasis on acquiring revenue-generating assets and building functional products that accrue value to the treasury — starting with the bonding of CVX during our launch.
While the roster of assets has expanded, the core goal of diverse yield has not. In addition to collecting yield on our treasury assets, Redacted built and launched Hidden Hand, which currently facilitates token bribes for Balancer, Floor DAO, Frax, Tokemak, and Ribbon. Vote-escrow token implementation continues to soar as a more efficient way of collecting, and unlocking, value from protocols.
Over the past week, Balancer and Floor DAO have both completed bribe rounds through Hidden Hand. Bribe markets serve to direct liquidity to where it’s most in demand, measured by willingness to pay, as well as earn locked-token holders yield.
Not long ago Pirex went live, offering a new range of benefits for CVX / vlCVX holders. In this blog post we’ll outline what those benefits are and why users should consider using Pirex going forward.
Like any good Convex bull would know, CVX holders can get the most out of their position by “vote locking” their CVX in return for vlCVX. vlCVX is an illiquid representation of CVX that is locked for up to 17 weeks. During that period, users can delegate their vlCVX to Votium to receive bribes from various protocols participating in the Curve Wars.
As of this writing, the APR from locking CVX and collecting bribes is 54% (source). First, this yield is paid in various governance tokens, which (due to gas costs) prices out small holders from taking full advantage of the yield. Second, vlCVX is illiquid, as highlighted before, which means users are stuck with their CVX position for the 16-17 weeks and don’t have the opportunity to leverage that locked CVX for other opportunities. Third, there’s no opportunity for users to monetise future rewards or give protocols the ability to pre-purchase future votes.
CVX is the governance token of Convex, a platform built to boost rewards for CRV stakers and liquidity providers. Convex boosts rewards thanks to the large amounts of veCRV that are under its control and the distribution of its CVX token as additional rewards.
CVX can be locked for 16 to 17 weeks for vote locked CVX (vlCVX) which cannot be traded or transferred. Therefore, when the market moves, vlCVX holders are unable to exit their positions and realise profits or minimise losses. CVX that is not locked can be traded, but does not benefit from the significant yield that vlCVX does.
vlCVX holders can claim a portion of Convex platform fees and can vote for Curve governance proposals, including bi-weekly Curve gauge weight votes. There is a bribe marketplace called Votium where vlCVX holders can receive token incentives for voting for bribed gauges.
DeFi is about community-driven and logical liquidity allocation.
It’s the reason why the Curve Wars raged so intensely last Winter. It’s why we acquired Votemak and why we continue to amass governance power across various protocols. Our goal was, and will always be, to create a systematic and efficient way to allocate bribe rewards. Most importantly, for now, it’s why we’re excited to support and be a part of the third cohort in Tokemak’s C.o.R.E.3.
As of tomorrow, protocols can bribe users to vote for their Tokemak Reactor and TOKE holders can soon begin earning bribes through the Hidden Hand marketplace:
A few months ago we introduced Hidden Hand. Since then we’ve been hard at work building out the contracts, crafting the UI, onboarding partners, and educating bribers to bootstrap the marketplace.
We’re excited to announce that the Hidden Hand marketplace is now live and supports the following partners:
In the coming weeks we will also be launching marketplaces with key players across various chains and ecosystems including: █████, ████, and ██████.
For the first time ever, Convex users will be able to collateralize their vlCVX positions, allowing them to earn yield (i.e. bribes) and leverage their assets at the same time. This will be accomplished through a new technical collaboration with Tribe DAO and Redacted Cartel.
Pirex is a new incentives platform that we’re launching for vlCVX holders that introduces exotic liquidity for bribes and vote escrow tokens. It’s powered by a liquid marketplace for futures notes that provide fluidity, flexibility, and optionality on locked token rewards.
The premise: Users lock their CVX tokens in Pirex for pxCVX, a liquid wrapped CVX token, with a bit of a twist. Rather than a more traditional module in which the user stakes the liquid token for the underlying benefits of the locked mechanic, stakers of pxCVX get airdropped Bribe Futures Notes, or BFN for short. (1 BFN for each 1 vlCVX) at the time of staking.
It’s time to reveal the new use case of BTRFLY that we have been working on. An extension of the cartel that will empower the protocol to be at the forefront of DeFi bribes — the Hidden Hand bribe marketplace. Hidden Hand enables protocols with vote-escrow tokens to access a marketplace that lets others bribe their token holders to vote for their best interests.
Currently, BTRFLY holders are able to access a diversified index of governance tokens but are not able to either leverage their underlying voting power efficiently in the treasury nor receive worthwhile bribes and revenue on their tokens. With our new Hidden Hand marketplace, we will create a bribe platform on top of the DAO that lets protocols create markets for their ve-tokens where Redacted captures a fee that is distributed back to lockers of the BTRFLY token.
In an effort to place ourselves at the forefront of the imminent TOKE wars, we have conducted a strategic acquisition of the bribe facilitators for Tokemak reactors, Votemak. This acquisition will be overseen by elected community members of the cartel, LiquidityWizard of Tokemak, and the core-team of Votemak, 0xTomoyo, DCF Intern, 0xMattyb, and DCFGOD.
Votemak lets protocols bribe $TOKE holders to vote for their reactors via smart contracts. Protocols put up bribes in any ERC20 and $TOKE holders can collect those bribes after voting.
To learn more visit https://twitter.com/VoteMak
Last CORE event, Votemak generated over $130,000 of profits from over $2M in bribes and we expect the bribe amounts to be higher in future rounds (just as convex bribing played out). Votemak is currently the leader in the space and the clear decider of 3 of the 5 reactors from the last vote.
DOCUMENT █████-A ORIGIN: PDF FILE DISTRIBUTED DURING RECRUITMENT FOR A DECENTRALIZED AUTONOMOUS ORGANIZATION (DAO).
TOP SECRET (BTRFLY) █████
MR ███ █ ████ CLASSIFIED STORAGE CONTROL OFFICER WAREHOUSE 6 INSCOM
TO: ███/ ███ ████
The $BTRFLY treasury bootstrapping event (TBE) will take place on our app at December 15 2021 at 12:00 EST and end either after 48 hours or when all tokens are sold, whichever occurs first. When the auction ends, tokens from the TBE will be eligible to be claimed.
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.
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.
Chaos is not simply randomness or disorder. Chaos is what happens when tiny seemingly insignificant changes create ripple effects and eventually form tidal waves of change in future scenarios. Deterministic chaos was glimpsed by Edward Loranz as small rounding errors in mathematical computations leading to large-scale variations in future outcomes. Another term was coined for this ripple effect - The Butterfly Effect. A single butterfly flapping its wings could lead to a chain of events leading to a storm all the way over on the other side of the world.
When one looks DeFi straight in the eyes, what looks back at you is just one thing: capital efficiency, whatever DeFi “2.0” is, is just a continuation of this trend. So, what is capital efficiency? A business or person wants to do something with their capital (money) and they want to feel like they got a good deal on that service. In DeFi, the “good” part comes from capital efficiency. If their friend starts chatting on about how they found a 20% coupon that person missed, well, then that “good deal” looks less good. They didn’t use their money as well as they might have. Most of what businesses and persons wanted to do in DeFi this summer was swap between their filthy dog coins, but unfortunately decentralization hasn’t quite caught up with that need yet, so that story ends here, for now.
When you’re not swapping dog coins, there are good equivalents to forex markets in DeFi—capital-efficient AMMs (automated market makers). If you’re swapping stablecoins, the AMM you want is Curve Finance. Despite the intimidating UI, the engine under the hood running Curve pools is liquidity utilization like you have never seen before.
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:
The TBE will begin on December 15 at 12pm EST.
Increasingly, Computer Aided Governance is a methodology used in DAOs and decentralized projects to improve the quality of decisions made by incorporating evidence from data, analysis, and various types of modeling including integrative “complex systems” simulation modeling.
In general, the types of evidence used during the course of DAO governance decision making, from most to least “value added” are: Reports / Analyses; Integrative Simulation Models; Supervised AI / ML / Statistical Models; Clustering and Unsupervised Learning; Data Visualization; Raw Data.
The figure below describes a prototypical Evidence-Based decision making process that incorporates Computer Aided Governance.
“In ███ theory, with the butterfly effect, ████████████████████ a small change █████████████████████████████████ can result in large differences █████”
In its short lifespan, Curve Finance has established itself as one of the key building blocks in the DeFi ecosystem, utilizing its DAO and gauge mechanism as a gatekeeper for success among some of the fastest growing protocols in DeFi such as Convex and Abracadabra. Yet, many participants are not aware of the full extent of Curve’s influence in DeFi. Being the black hole for liquidity that it is, anyone who has experimented with DeFi protocols, will find that quite a few of those DApps use Curve to source liquidity and yield without you even recognizing it.
REDACTED Cartel is an initiative using the POL mechanics of OlympusDAO to accumulate as much liquidity as possible from the Curve ecosystem in order to have a majority say over the Curve gauge. The cartel does not aim to act maliciously, rather gamify and decentralize the process of bribing the gauge through a DAO. Using concepts from the Olympus model, we will make a blackhole for CRV, CVX, and Curve LP tokens and manifest a DAO that has a majority say in the Curve gauge? The first DAO political party? ██████? Gauge-as-a-service? Why not?