I’m OneTrueKirk, working on Volt Protocol, a floating price stablecoin based on RAI but backed by a wide range of collateral assets. We’re a “friendly fork” and are sharing 6% of our governance token VCON with the Reflexer community in exchange for Reflexer Labs’ permission to use the RAI code.
We’ve been pursuing close cooperation with partners including Rari and Olympus. When setting out to build a new product in DeFi, I believe cooperating with existing DAOs is the best approach.
You may have seen a similar proposal I posted in the Fei Protocol forums. By cooperating with leading decentralized stablecoin issuers, we will largely avoid the need for conventional liquidity mining in which most participants farm+dump.
Instead, we’ll engage with DAOs who have long term alignment in our mission and share ownership of the Volt Protocol among those best suited to govern it, existing community-governed projects.
We’d love to work with the Fraximalists, allocating 6% of the VCON supply in exchange for support with our liquidity needs for launch and other forms of collaboration described below. We hope that Frax will become one of our long term partners in launching and growing the Volt Protocol.
Liquidity support. We plan to use a Fuse stablecoin swap pool as a major liquidity venue. Users can mint VOLT, deposit it into the pool, and borrow against a more liquid stablecoin. We hope to see the FRAX protocol support our launch by providing a substantial amount of FRAX liquidity into this pool. FRAX has a flexible ability to expand its supply to meet market demand in diverse venues, we would love to get this support behind our launch. The VOLT Stable Swap Pool will allow VOLT as collateral and support FEI, FRAX, RAI, DAI, and other stablecoins for lending. This will be a primary venue for future liquidity incentives, allowing us to reward partner DAOs for liquidity services.
VOLT as a high-yield PCV asset. VOLT can be considered a proxy for exposure to long tail DeFi assets that might be too volatile to include in FRAX’s backing. Onboarding VOLT as part of FRAX’s PCV backing reduces the protocol’s exposure to USDC while also offering an opportunity for yield.
Flexible leverage for FRAX lenders. In various high demand Fuse pools, users will be able to mint VOLT against their fFRAX, giving FRAX users access to more capital efficient lending opportunities.
Control over VOLT credit allocation through VCON. Allocating VCON to the Fraximalists means that in Volt v2 they will be able to direct a line of credit among assets of their choice, including PCV assets, preferred Fuse pools, or other opportunities for yield generation. The Fraximalists owning VCON is like a larger bank taking an income-producing stake in a smaller bank with a riskier collateral basket.
Bootstrapping decentralization. A large portion of the VCON supply is being distributed to partner DAOs. Our hope is to bootstrap an effective and decentralized community. We’d like to see the FXS community (as well as other partner DAOs) select one or more delegates to participate in VCON governance. In the future, we expect a “bribe” ecosystem to emerge around VCON as protocols seek to incentivize VOLT liquidity against their ecosystem assets, much like exists around Curve today.
If you’d like to learn more or get involved, please join us in our Discord.