$GLB to become an algorithmic reserve currency backed by other decentralized assets (DeFi 2.X)
🚀 BeGlobal.finance, the first DEX to migrate to “DeFi 2.X”.🚀
💫Dear BGlobians!
I know you were all waiting for it. What is the first project that the BeGlobal team is going to start with? After all, the roadmap is loaded with different projects:
It turns out that the first feature that we have been working on (actually, since prelaunch) was not public! However, we are very excited about it since we believe it guarantees the long term viability of BeGlobal.finance, which is what we all want (the team, the investors and the users).
🔥 $GLOBAL token is going to switch from a token used to give rewards for adding liquidity to be an algorithmic reserve currency backed by other decentralised assets.🔥
Ok, this sounds a bit complicated. Let’s go step by step.
tl;dr -> BeGlobal will purchase its own liquidity to be used in the DEX (POL AKA Protocol owned liquidity). This way, you can always come to BeGlobal to have the best swap rate in the market. Besides, the token $GLOBAL will be backed up by different decentralised assets, giving an intrinsic value to it (a floor price).
👀 This is going to be a long post. However, in case you don’t read it all because you already know the basics of the so-mentioned “DeFi 2.0”, just know that we are not going to be a typical DeFi 2.0 (we are not just a fork, remember?). We believe the current 2.0 systems are powerful but there is room for improvement. Thus, we are rebranding it to DeFi 2.X, as we will apply different strategies to purchase liquidity and change our treasury management. Today, we are going to explain the basics of what becoming a POL means, but we will disclose more details of how we are going to implement it as we design and develop the changes in the following days. And, ah! We are hoping to have it all ready around new year.
What are the current problems of the typical DeFi ❓
▶️ The idea of giving tokens in exchange for liquidity is a very good one: Investors have high incentives to deposit LP for yield-farming, which is perfect for decentralised exchanges. However, most of them want to realise profit as soon as possible (dumping the token used as rewards), and they will move to other DeFis with higher APRs if there is a chance to do so. There is no loyalty to the protocol and that’s actually normal. All in all, investors are here to make money, one way or another. Current DeFis “1.0” have tried different ways to stop this from happening and not many have been successful in doing so. What actually works is to be able to keep people restaking their awarded tokens and keep the price stable. But as you can see, this is not always easy.
How are we planning to solve this problem❓
▶️ The original idea comes from OlympusDAO, an ETH protocol which was the first one to design this system. Instead of renting liquidity, the protocol will buy it to you. In very simple terms, imagine the following:
- You have 1 GLOBAL-BUSD worth 1000$.
- The protocol gives you an offer: it will give you 1050$ in tokens (5% extra). Rewards have a little vesting period.
▶️The % of interest is not fixed and it will vary depending on different conditions. With the system above, the investor achieves quick profit and BeGlobal protocol now owns 1000$ of liquidity that can be used in the DEX for swaps, without paying so many rewards to yield-farmers.
Does this mean that there won’t be any more yield-farm rewards❓ Absolutely not. It means that we will be switching from one system to another over time. This can’t be done in one day.
This, of course, is based on the idea that the tokens are not dumped in the market immediately. Do not worry about it, because it will be way more profitable to hold than to sell them. Also, the more liquidity that BeGlobal owns, the least rewards for yield-farmers will be awarded.
We could have the system integrated as it is within 3 days. However, we are going to apply many modifications to it. What worries us about it is that it’s solely based on the prisoner dilemma. And it works for the majority of the cases, but it does not consider what happens when an actor behaves against his own interest (for instance, in a heavy market crash). As you probably know, our founder Samuel Jiménez has game theory knowledge background and, even if recognising how game-changing a protocol that owns liquidity is, he wanted to apply some changes. In his own words, from a team meeting:
Deciding the best strategy is not straight forward and it would probably require lots of aggregated data for analysis (machine learning) that we don’t have available at the moment. However, I think there are some key issues that must be addressed and even if the overall idea of acquiring liquidity persists, the system clearly needs more flexibility.
🔥 Some of the improvements we are thinking of include:
▶️The premium interest paid will be based on market conditions.
▶️Payout won’t be just a linear vesting of a few days. There are three variables that can be adjusted here: how much premium we pay you, for how long you vest, and if you can remain liquid even if you are vesting (more on this in the next days… NFTs might be involved here…).
▶️The amount of tokens minted might depend on the liquidity already available in the protocol. Why would we want to have (for instance), 500.000.000$ in a BNB-BUSD LP, generally speaking? We can probably redirect our efforts and ecosystem to better uses. That’s to say, we will establish different parameters to control the flow of the assets.
▶️Treasury management. We want the treasury to be used as liquidity for swaps (in our core, we are a DEX!). However, it would be a shame if it simply stays there, right? There are more use-cases available… But this will come in Q1/22, so we will talk about it later on. Don’t forget this bullet point, it’s going to be something important.
▶️There will be a curve of how this is going to be managed: at the beginning, the premium will be higher. Over time, it will be lesser. Alongside with the fact that less rewards from yield-farming will be distributed, you can expect GLOBAL supply to be quite elastic and end up with very low inflation or, after all features are deployed, deflation.
There are three fantastic and successful POL protocols out there: olympusDAO [ETH], Wonderland Money (TIME) [AVAX]and Spartacus [Fantom]. There are many, many other forks of these protocols but they are simply forks with no real use-case and just trying to capture the current hype of the moment. Implemented by people that are not even devs and can’t change a coma due to their lack of knowledge. Actually… Have you noticed that there are no real successful 2.0 DeFis in BSC? Mmm something to think about. We need one, don’t we? In BeGlobal, we are different. The POL system is being implemented by a top dev who used to be the technical lead director of smart contracts in different reputable blockchain companies of various chains (cardano, avalanche…). This is how we want to make a difference. We are going to do the changes we need to. Technical difficulties are not going to be an issue. We are not going to simply fork existing code (like 99% of others out there…). We will take what we like and improve what we don’t like. That’s why we estimate 2 to 4 weeks to have the changes applied and audited before we are ready for production (= have the system available to everyone).
As far as we know, 🚀We are the first “DeFi 1.0" to start migrating to “DeFi 2.0”. Well, as we said, “DeFi 2.X”🚀. The systems mentioned above (2.0) pays premium in exchange for a 5 days vesting. If you check the changes proposed by the BeGlobal team, there will be multiple strategies to have higher stability vs. different market conditions. We are aiming to have a more stable protocol in any circumstance.
This week, we are discussing the final changes. If you have game theory knowledge or a deep understanding of POL, please feel free to share your ideas with the team. We will definitely consider them! A community is stronger than any team.
We will post several medium posts detailing how the new protocol system works. For now, just now that we are going to be migrating how BeGlobal works to a more sustainable one. Actually, let’s look at some “DeFi 1.0” tokens vs. “DeFi 2.0", once the later ones became popular:
Converting BeGlobal to a POL has many advantages. To be a first to do such migration in BSC is probably already awesome on it’s own (because be real, we only have pointless forks right now). And if you look at how different both kind of tokens behave… You have to wonder: what do you want to do with GLOBAL token now?
✍🏻 We are going to be updating you way more often now that we have started multiple projects (as promised from the very beginning). We needed some time to work before we can bring you news. We won’t be hyping you with something that is not closed yet. But… Many projects are kicking off already. And, oh! We have the first project that wants to be launched through BeGlobal soon (90% confirmed). As we haven’t got time to develop the launchpad we want, we will use GLOBAL-BNB token for the presale with the overflow method. Stay tuned for more updates! 📣
Official references and All things about BeGlobal:
💬 TG Chat: https://t.me/BeGlobalFinance
📣 News Channel: https://t.me/BeGlobalAnnouncements
🕊️ Twitter: https://twitter.com/Beglobaldefi
