4.3 RPC Flow mining and DAPP pledge

1) RPC flow mining

We have developed the RPC liquidity mining protocol. The agreement is based on an agreement on Ethereum to build a pool of assets based on changes in supply and demand to algorithmically calculate interest rates. The supplier and borrower of the asset interact directly with the agreement to earn or pay the floating rate. Our important step in designing a liquid mining scheme is to determine the exact objectives of the scheme. Here are our general goals:

-Encourage long-term, sticky liquidity;

-Attract a lot of hot money to create momentum and improve product visibility;

-Distributes tokens without icO and decentralizes protocol governance.

In order to achieve the goal of decentralized governance, many protocols inject governance rights into their tokens. However, if the ownership of governance tokens is highly centralized, it is difficult to guarantee the decentralization of protocol governance. One of the main challenges facing the protocol team is how to distribute their governance tokens to their users. To solve this problem, our designed RPC liquidity mining can be used as a powerful tool (relative to other methods, such as directional air drop).

The RPC pledge lending model follows the automatic liquidity agreement based on the "constant product formula". Each transaction pair stores a pooled reserve of the two assets and provides liquidity for the two assets, maintaining the feature that the product of the reserves cannot be reduced. The basic formula for price prediction is:

We establish the platform mortgage model capital pool, introduce the insurance pool management, and reduce the mortgage rate. We capture the market value of collateral in the market through smart contracts and predictions. When the value of the mortgaged token fluctuates beyond the set range, the warning will be automatically executed in the form of smart contract, reminding the user to cover the corresponding position.

If the user cannot complete the cover, the smart contract will automatically clear the position and sell the assets mortgaged by the user to ensure the income of the asset lender. For the insurance pool will pay 70%, but not exceed the total limit of the insurance pool. In insurance pool management, interest rates increase with demand; when demand is low, rates should be low and vice versa.

2) DAPP pledge

In the RPC pledge loan agreement, the user realizes the continuous financing through the risk classification of the pledge target. After the platform provides the initial liquidity, the market maker locks the LPToken as collateral in the RPC agreement, thus continuing to obtain liquidity buying. When the user provides liquidity in the RPC and sets a large range, the value of the liquidity target based on the standard currency fluctuation range is small.

If the supplier edges LPToken in the RPC, the pledge will significantly improve the risk resistance under extreme market, which will also make the booster pool system more robust: provide reasonable risk warning when the project token rises sharply; and risk buffer when the token falls sharply. RPC can eventually allow high-quality assets to rise in the long term, and non-performing assets will gradually decline and be eliminated.

In the platform, in order to achieve more accurate risk pricing, it is necessary to classify risks, so as to form a fixed income classification fund. In addition to the project sponsor (IP), there are two main types of role participation, divided into important participant (GP) and fixed income (LP). Both roles will provide continuous funding input for the project. GP, as the direct investor of the project, will convert all the principal into project tokens, while LP funds will be used as leverage for GP to help the project achieve greater value growth.

RPC allows IP to pledge high-quality assets, which adds a layer of security for GP and encourages a large amount of GP capital inflows. Each inflow of GP funds will be injected into Vault to deposit LP's risk reserves and profits. With the increase of Vault capital volume, LP's investment willingness has also been gradually enlarged.

as follows:

LPwocVaultocIPcolGPturnoverIPItv GPturnoveroGPw among:

-IPcol is the pledge of the IP

-IPltv is the current pledge rate of IP

-GPturnover Is the turnover rate of the GP

-The GPw is the investment willingness of the GP

-LPw is

LP Vault For the reserves

It can be seen that through effective signal transmission, the underlying assets with smaller IP pledge volatility can effectively drive the capital capacity of LP. LP capital, as the most important part of the market feedback loop, will play a positive multiplier effect. If the project is a non-performing asset, and the GP participants change the standard coins into the token of the project, the volatility of the GP leverage target will be much higher than that of the IP pledge. At this time, the GP may be removed first due to the decline of the project asset price. The remaining GP is more willing to enjoy the pledge after the IP is cleared, thus reducing the turnover rate. This time directly leads to the shrinkage of Vault increment, which greatly reduces the investment willingness of LP, and then gradually eliminates the inferior projects.

LPwocIPcol*GPturnover

GPturnoverI n LPwI

Such transmission mechanism can not only make RPC operate well and become a scavenger of non-performing assets, but also transmit a large amount of effective market information, as the external feeding data of RPC risk pricing, to provide decision-making feedback to investors and liquidity providers.