a win-win staking design for $BPRO
solution requirements
the staking model should:
- add value to the protocol
- incentivize long term holders
- give the token a valuable utility
- be as simple as possible for newcomers
- consider the volatility of $BPRO
the main idea is to feedback the $BPRO into the backstops to create larger backstops,
that in turn would generate bigger liquidation gains.
To accomplish this there are several approaches,
here is my solution
creating a stable coin (a Liquity clone) that can be collateralized only using $BPRO
this stable would be backed by our very own backstop (much like Liquitiy’s stability pool)
so user deposits BPRO borrows “BUSD”
and then stakes the BUSD.
this backstop would be a general-purpose backstop to be used by all of Bprotocl’s backstops
This reduces friction for newcomers
the general-purpose backstop would convert some of the “BUSD” into Uniswap LP tokens to create liquidity without impermanent loss and when a liquidation happens it would be easy to swap and liquidate any debt.
This would give $BPRO holders great liquidity as well if they want to cash out they can borrow at a 100% of their BPRO and get liquidated
only BPRO holders can generate BUSD,
only BUSD stakers get profits (kind of like Liquity’s LQTY reward),
This gives the token a utility, the only way to become a liquidator is by staking BPRO
to conclude
this design gives great value to BPRO holders and the protocol
and creates a self-reinforcing loop for $BPRO generating profits and pushing the BPRO price higher
while still accounting for all of the solution requirements
- add value to the protocol
(adding funds to the backstops) - incentivize long term holders
(stakers get profits and BPRO value increase as they hold) - give the token a valuable utility
(the only way to liquidate without building bots and allocating capital is by staking BPRO a very valuable utility) - be as simple as possible for newcomers
(staking once on one backstop to provide for all backstops) - consider the volatility of $BPRO
(using a stable coin users gets to decide how much $BPRO they want to risk as collateral)
lastly, I would like to add that besides giving $BPRO holders short term value,
the main long term goal of the project creating a huge backstop for all of Defi liquidations
still has a big promise so holding & staking makes snese not just for short term profit.
BPRO holders would get antifragile returns meaning whenever something goes wrong on Defi liquidations happen and BPRO holders profit it could become a hedging tool for Defi investors driving the value even higher.
any questions or feed back would be highly appreciated
Best