Interpretation of New DeFi 3.0-BlackHoleDAO
BlackHoleDAO is a decentralized asset management protocol based on DAO governance. “BlackHole DAO Protocol (BHDP)” is a brand new standardized model constructed based on DeFi 3.0. The BHDP burn mechanism, by drawing on the stock split and stock merge in the traditional stock market, resolves the imbalance between high inflation and deflation in the market. It also rolls out the DAOs credit-based loan service.
1.0 BHDP Components
1.1 BHDP Design Highlights
From the above picture, BHDP (BlackHole DAO Protocol) is supported by a Treasury, with smart contracts to connect VC Pool and Donation Pool. VC Pool supports multi-asset certificate investments, part of which is used to burn BHO in the liquidity pool and the rest for credit loans after the DAOs investment succeeds.
3 BHDP Ways of Deflation:
- It is a common way to burn directly 60% BHO of the transaction tax
- 50% of VC Pool is also used to burn BHO in the liquidity pool,
- The BHDP extreme deflation mechanism will be triggered when the extreme inflation happens:
When the stock (BHO) in the market reaches a certain amount with a 0 support rate, the deflation mechanism will be triggered. The interest on Stake will gradually decrease by a proportion.
x: amount when the burn mechanism is triggered
y: burn rate
h: Time (days)
z: amount remained when the support rate is greater than 0
2.0 Wise Use of Olympus Stake and Bond
2.1 Evolved Stake and Bond
BlackHole DAO Stake regulates minting dynamically by the proportion of the total staking amount. In other words, when the market is in inflation, the staking interest will decrease, while in deflation, it will increase. However, it will never exceed the total staking amount. The advantage of dynamic regulation is, this free market transaction prevents the collective behavior to flee after making a profit.
Staking reward is calculated as:
- Olympusdao can mint tokens all the time, while BlackHole DAO dynamically regulates the proportion of minted tokens according to the inflation rate. In a relatively high inflation rate, the proportion of BHO minted by Bond will decrease. Upon a 0 support rate, Bond will stop minting.
- It provides a discount to buy Tokens through Olympusdao, while to buy Tokens through BlackHole DAO is the same as the market price, but saves 15% of transaction tax.
For both choices, the most valuable point is that when the market circulation value is equal to the treasury value, Bond is no longer the previous high premium minting, but stopped minting, indicating that before the market is in inflation, the proportion of minting in the channel will gradually decrease until the minting is stopped, preventing further asset shrinkage during inflation.
2.2 VC Pool with All Vouchers
According to the official document, it is defined as a “VC pool with vouchers”. The document describes: [Any project Token that enters VC Pool will undergo rigorous review and screening to prevent the malicious behavior from causing the loss of the long tail effect on potential assets, resulting in deflation and inflation of stocks (BHO) and failure to play a locking role in the Token project entering into VC Pool.
We can see that VC Pool is the asset management business.With the final stock reflected in the intrinsic value of VC Pool.
VC Pool accepts such valuable vouchers as stablecoins, NFTs and liquidity LPs. These valuable vouchers, upon up to a certain amount in VC Pool, will group LP and provide liquidity and LP loan services to the third party. All the claimed earnings will enter the VC Pool to support circulation value of the stock (BHO). Besides, one potential value of VC Pool is to serve as the credit pool. Bound with the DAOs community, it uses the DAOs community protocol to accumulate the credit and issue unsecured credit loans according to the accumulated credit.
Meanwhile, VC Pool plays a regulatory role in BHDP
- In deflation, the proportion of the stock (BHO) minted through VC pool will increase
- In inflation, the proportion of the stock (BHO) minted through VC pool will decrease
- For BHO minted through VC pool and entering VC Pool, 50% assets will be used to burn BHO in the liquidity pool. The other 50% will be kept in the pool for DAOs community credit loan.
3.0 Reverse Investment to Cater for Different Customers
The investment starts at 10,000 BUSD, able to receive earnings from transaction tax (BUSD+BHO)10% until the investment doubles.
The investment starts at 1,000 BUSD, able to receive earnings from transaction tax (BUSD+BHO)3% until the investment doubles. The earning will stop at the end of the return period.
The investment starts at 100 BUSD, able to receive earnings from transaction tax (BUSD+BHO)2% until the investment doubles. The earning will stop at the end of the return period.
4.0 Black Hole Reactor
The nature of the Black Hole Reactor looks like the prize pool set by the project at different stages. To meet a certain condition, the prize pool will be opened. The funds are mainly from 60% of the tax. when the market circulation reaches 10 billion BHO and the reactor amount reaches 100 million BUSD, the reactor will be opened. It’s certain that the amount varies depending on the stage of the reactor, and the amount of the reactor in the second stage maybe 1 billion BUSD.
For special reasons, there are exceptions for opening the reactor
- The reactor will be opened when the market circulation triggers the Blackhole Protocol mechanism with a final deflation to 10 billion BHO and the reactor amount reaches 100 million BUSD
- Regardless of the result, the Black Hole Reactor will be opened after 3 years.
- During the minting process, upon up to 100 million BUSD, it will open the Black Hole Reactor and stop minting.
More detailed article：https://blackholedao.substack.com/p/interpretation-of-new-defi-30-blackholedao?s=w