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:
Voting for the C.o.R.E.3 round goes live on May 2nd, 2022 — after which users will be able to vote for specific Reactors to earn bribes. That said, projects can add bribes at any time between now and the end of C.o.R.E.3. For projects that need help getting set up, you can reach out to us and we’ll get you taken care of.
How does it work?
The process is very simple. First protocols can visit hiddenhand.finance where they can select which reactor they want holders to vote for, and deposit a bribe into the smart contract. Protocols are able to upload multiple bribes before the deadline (when voting ends).
Users can then see the total bribes for each reactor on the Hidden Hand website (we recommend waiting until the last few hours to vote as new bribes may come through).
Users do not have to interact with our smart contracts to vote, they simply vote on the Tokemak website — even those who don’t know Hidden Hand exists will be able to claim bribes after the event concludes.
After the vote ends, the distribution of the rewards will be initiated. Voters can then collect their respective piece of the bribe.
Voters should look at which reactors already have votes and vote based on which bribe will pay them the most per vote.
For example, assume the following:
- The BADGER reactor has $100,000 of bribes and 1000 votes
- The LUNA reactor has $200,000 of bribes and 3000 votes
In this case voters should vote for BADGER even though LUNA has a higher total bribe amount because they will get more $ per additional vote.
What does it cost?
For voters there is no cost to using Hidden Hand, instead the protocol takes a fee from each bribe. The fee is currently set to 4% which is split evenly between BTRFLY lockers and the Redacted treasury.
Voters should be aware that there are Ethereum gas costs when they claim their bribes, so smaller voters should concentrate all their votes on one protocol so they only need to claim one bribe.
What is Tokemak?
The inefficiencies of many approaches to yield farming are widely observed at this point and have been highlighted by Nansen’s analysis of the MasterChef contract.
The data they provide confirms what your gut already knows: the vast majority of yield-farmers only support liquidity as long as they are incentivized to do so. So, rather than fostering game-theory around liquidity, the current strategy of paying mercenary capital largely just results in inflationary tokenomics and short-term investing.
Tokemak addresses this through a few key mechanisms:
- Liquidity is sustainably produced and capital efficient. Tokemak uses dynamic yields to ensure that Reactor Pools are balanced, and the most in-demand pools are rewarded accordingly.
- Liquidity is Democratically sourced. Tokemak users receive votes based on deposited TOKE. More popular protocols, or those who campaign to earn TOKE votes, will naturally receive more liquidity allocated.
- Liquidity is Superfluid. Dynamic rewards adjust according to users’ allocated votes. As new reactors come online, or interests change, votes adjust. This, in turn, adjusts rewards and re-allocates liquidity.
This approach to sustainable liquidity development is why competition for Tokemak Reactors is so fierce and is why we’re eager to help support and facilitate this competition through Hidden Hand.
Vote for BTRFLY
We’d also like to highlight that BTRFLY is part of C.o.R.E.3, where Redacted will compete against over 50 other projects, all vying for only five Reactor spots. Projects will receive votes from users who have deposited TOKE and the top five most highly voted protocols at the end of the event will have Reactors created.
Needless to say, this is an important milestone in the Redacted’s quest to control liquidity and bribes across DeFi, while also keeping the Cartel Familia strong. With a Reactor, BTRFLY market depth will become much more resistant to large trades, and maintain its integrity across volatile markets.
Again: the vote launches on May 2, 2022 — be sure to put your faith in the Cartel.