Tokenomics

Vision

HODL Dao intends to be a synthetic crypto index platform and provides different indexes for major crypto assets like BTC, ETH etc.
In the V2 version of the HODL Dao, we now introduce HODL as the governance token for the HODL Dao.

Function

  • The HODL will be the reward to the index token (BTCH / HETH) stakers.
  • HODL stakers will be rewarded with the protocol income.
  • HODL stakers can also vote to decide what yield protocol will be integrated for income.
  • HODL will be a tool to balance the index backup rate.

Details

Rewards will be replaced with HODL

In the HODL current version, BTCH stakers get BTCH rewards when rebalancing and bonding sale. This attracts BTCH holds to stake BTCH instead of selling it on the market, which helps the index stays at the target price. However, additional minted BTCH will decrease the backup rate.
After HODL is introduced, when rebalancing and bonding sales happen, instead of newly minted BTCH, HODL will be minted, 50% of HOLD be exchanged to USDC, and the USDC will pair with the left 50% HOLD and put into balancer as Liquidity, and the LP token will be sent to the stake reward pool. BTCH stakers (and other index token stakers) will claim the LP token as the staking rewards.

HODL Staking

When staking, HODL holders will be asked to lock their HODLs for a certain period of up to 4 years. Locked HODL will in turn become veHODL. The voting power and Income Share Power of veHODL will decrease linearly as the staking duration reaching to the end of the locking period.
HODL holders can stake HODL to get the following features:

Protocol Income

In HODL Dao V2, the protocol will be integrated with yield generating Defi protocols to generate additional income. The income will be shared among all HODL stakers who voted for the protocol connected.
The yielding income will be collected daily, and exchanged to USDC. The same US$ value of HODL will be minted and distributed to veHODL holders to claim. The same HODL distributed to veHODL holders will also be minted and paired with the USDC got and put into the Dex as liquidity, the LP will be managed by the Protocol Control Vault.
As referred in the Governance Feature of HODL, veHODL can be used to vote which yield protocol HODL Dao is integrated with, per index token. For example, BTCH can be voted to integrate with Notional BTC liquidity providing pool, and HETH can be voted to integrate with Convex sETH/ETH pool. veHODL can be assigned to different index tokens, in total not more than 100%. Only those veHODLs that are assigned to vote for a specific index token, would be assigned the HODL minted as rewards, for the specific index token income. That means, yields from BTCH via Notional would only be distributed to those veHOLDs which are voted to Notional for BTCH, and yields from HETH via Convex would only be distributed to those veHOLDs which are voted to Convex for HETH. The distribution percentage would also consider the Income Share Power, which will decrease as the staking duration reaching to the end of the locking period.

Governance Features

  • Vote for Yield Generation Integration
As specified in the Protocol Income Share section, veHODL can be used to vote which Defi Protocol would be integrated with to generate yields, for each specific index token.
  • Vote for New Proposals
veHODL can be used to vote for new proposals of the HODL Dao. Especially for new index tokens.

Seigniorage used to balance the index backup rate

A Protocol Stability Vault will be created. For the LP tokens that are generated from rebalancing and bonding sale, 1% of the LPs will be sent to the Protocol Stability Vault, for each specific index token.
After a successful proposal voting, the native asset in the LP (BTC or ETH) will be extracted, the HODL extracted from the LP will be exchanged into the index token, and the index token and the native asset will be put into the Protocol Control Liquidity, to increase the backup rate, when the backup rate is low.

Fair launch

For the initial launch, HODL will use Balancer BootStrapping Pool for the initial HODL sale (USDC/HODL). The final USDC will be paired with HODL to provide liquidity eternally, controlled by the protocol controlled vault.
To reward early BTCH participants, based on the end price of the HODL LBP sale, the same US$ value of HODL as the rewards for BTCH the early participants from rebalancing, bond sale and genesis participation reward, are distributed to the early participants, with a 20% unlock at the time HODL is online, with the rest 80% unlock linearly during the rest of 6 months, by claiming.
Image: rewards flow for BTCH Staker and HODL Stakers
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