A proposal to take SpiritSwap multi-chain (AMA with Upper Octave)
What Does The Proposal Offer?
Recently there has been a proposal by the UpperOctave team, which promises to take SpiritSwap to multi-chain if it meets the quorum and gets a yes vote.
You can read the proposal and vote on it here: https://snapshot.org/#/spiritswap.eth/proposal/0xb037eedc0a43a37347b694386fd5cc8ae1d379f3a55537c623346c499ad96147
There has been a massive sentiment in our community in recent weeks regarding the need of going multi-chain, especially considering the decrease in TVL on Fantom. The move is now an essential one in order to:
- Retain the revenue stream going to SpiritDAO
- Create more revenue streams for the treasury
- Become more agile in the market
- Increase the number of opportunities by expanding to new markets
UpperOctave team has suggested taking us to a new and promising layer 1 called Canto Network (https://canto.io/). It is a very young and newly emerging blockchain that has a special feature, which would allow SpiritSwap to get 25% back from the gas fees spent while using our product. By gas rebating back to SpiritSwap, the DAO will receive a consistent incentivization from the usage of the AMM and will be able to earn a constant flowing revenue. Considering the fact that stablecoin inflows and usage of the chain have been increasing for a while, this 25% gas fee rebate can be very advantageous for SpiritSwap in the future.
On the other hand, some things are obliged to change on the tokenomics side when deploying to another chain. If the proposal passes, while expanding on to the Canto chain SpiritSwap will use a new token, which is going to be called SOUL. While the SPIRIT token on Fantom will continue as it is, and inSPIRIT holders will receive 50% of the lock drops that will happen on the Canto chain, SOUL will be separate from SPIRIT.
Soul’s initial supply will be 10,000,000 and it will be lock-dropped based on the compensation numbers on the proposal (50% inSPIRIT holders, 30% other protocols, 15% UpperOctave team, 5% AdminGuru). The first week’s emissions will be 400,000 SOUL tokens and it will decay by 1% every week until it hits the tail emissions mark which would be 0.2%. 5% of the emissions each week will go to the DAO, and strengthen our treasury. There won’t be a max supply and emissions will continue at 0.2% indefinitely. And lastly, due to the rebases, the locked tokens will always keep their share to the market cap. So even though there’s no max supply, no locked token will ever be diluted. Locked SOUL (veSOUL) will be used for governance and deciding emissions, it will earn voting fees and as stated previously due to the rebases will never get diluted.
While it’s tricky in software development to figure out a clear timeline for any implementation, the UpperOctave team believes that this process will take 2,5–3 months of time, and will update the community step by step during the building phase.
AMA with Upper Octave on 10 Oct 2022
(You can listen to the recording of this AMA on Youtube.)
JJBeGood — Thank you very much, everybody, welcome to this episode of Fireside Chat with Soully! We have a very special topic as in SpiritSwap going multichain. There has been a proposal that was placed last week by the UpperOctave team and it’s still on our Commonwealth forum. You can read the proposal there, and also we have a special thread on our Discord channel where you can discuss the proposal itself. And today, DEVIN from UpperOctave is joining us, in order to answer some questions from the community, and also explain the whole process and answer questions from the community. Welcome, Devin!
Gooro D (Devin) — Hello everyone!
JJBeGood — Hello Devin, good to have you here. Could you give us a small introduction on who you are maybe?
Gooro D — For sure! Hello everyone, I am Devin and I am from Seattle. I have been holding SPIRIT since the beginning and I basically saw a lot of demand in the blockchain scene I have established a staffing firm, Upper Octave, for software development. I have basically staffed different blockchain and non-blockchain projects and what I saw was SpiritSwap has an incredible product with the current market conditions and a lot of different aspects + people asking to go multichain this is a great opportunity to keep SpiritSwap alive and thriving. I decided to make the proposal for SpiritSwap to go multi-chain because I know our team can do that. And so yeah, that’s more about UpperOctave and we are a staffing firm for software development.
JJBeGood — Yes, thank you. And I haven’t mentioned it in the beginning but we know that the market sentiment has been very volatile recently and I wanted to thank you and the other people for joining in this Fireside for us. This will be a very important decision for the DAO, which consists of inSPIRIT holders, I want to thank everyone who came here to listen to this episode. This is about the direction that SpiritSwap will take, so I would like to thank all of you for joining us today.
So, as an introduction before we move to the questions first, can you tell us a bit about the proposal itself? For example, we can start with the question: “Why the Canto Network?” What can you tell us about the Canto Network for the ones who are not familiar with it?
Gooro D — Yeah definitely. At first, it’s a chain that the DeFi OGs have always had something good to talk about since the DeFi summer (2020). Second, Canto is really bright right now. Not too competitive and is also talked about.
But in terms of the tech, this is the perfect opportunity because there is an AMM on Canto called ForteSwap and we can partner with them to bring in this new model of AMMs that collaborate, and use the same underlying liquidity. And then, Canto has also seen a lot of stablecoin inflows recently, so that’s also positive to show that people are moving towards Canto and they like what they are doing. And also there’s something really cool that they do, they have a 25% gas fee rebate to the developers. It’s hard coded to the chain, not based on TVL and it will always go back to the developer.
JJBeGood — So, it’s really like a never-ending incentive, right? Since it’s already coded on the chain the incentive will always be there.
Gooro D — Yeah, exactly. There are a lot of positives there with Canto and I think it’s just the perfect time.
JJBeGood — A lot of people I know are not familiar with the network so we’ll try to introduce the network to our new users. As you mentioned, it’s a very important aspect that 25% of the gas fees go back to the protocol. That’s something all the protocols can capture.
And also, you’ve mentioned another AMM. If the proposal passes, SpiritSwap will not create a whole new AMM structure there, but rather use the technology we have with V2 + already found DEX on the Canto chain. Is that correct?
Gooro D — Yeah, ForteSwap is an AMM there we can partner with. And in terms of the tech, nothing changes on the structure side. We can deploy SpiritSwap V2 we know there, without a problem.
JJBeGood — On ForteSwap, there’s going to be a new token that will not be SPIRIT, it will be SOUL. Could you bring out more information to us about the tokenomics structure, since a lot of users are asking why not bring the same token with us to Canto Network?
Gooro D — Yeah, definitely. I know that’s one of the main concerns, so why not use the same one… Believe me, if we would be able to use the same one we would’ve. The SpiritSwap system is all on the Fantom chain. Voting rewards are on-chain so it’s not that feasible to do something cross-chain. The reason why is that there’s something called reads and rights and it would require writing all the contracts from scratch, it’ll require audits, etc.
We’re gonna need inSPIRIT balances on Fantom and we’d have to do it over and over again. It’s too difficult, not just too difficult but part of it is impossible. The cross-chain system since the one on Fantom is already coded we can’t edit contracts. Nothing changes with SpiritSwap on Fantom, we’ll get into it but it’s only going to benefit SpiritSwap & inSPIRIT holders. There’s no negative that we’ve seen.
JJBeGood — Yes, that’s something that I empathize with. SpiritDAO’s treasury will benefit from this so I can not see much of a negative aspect here as well. I have another question though, in the tokenomics model, how is it going to work? I think this is already mentioned in the proposal but if you’d wanna talk about it a little bit of course, how will the locking mechanism work on Canto?
Gooro D — Oh, the locking system is pretty much the same. It’s like 50% going to the inSPIRIT holders, 30% going to the protocols, and so on, so when we’ll deploy we are going to announce a date on snapshot, and inSPIRIT holders will receive a percentage on the SOUL tokens. It’s not going to be an airdrop, because it’s instantly locked. People are asking, why there isn’t a max supply. And that shouldn’t be a concern because Canto does a rebase and it stops the locked tokens from being diluted, and you’d always keep the same percentage marketcap-wise. That’s about the no-max supply.
There’s a lot to talk about, so want to break it down. To give more details about no max supply, the emissions, if it decreases by 1% each week until 0.2%, this allows us to retain the LPs and doesn’t dilute the inSPIRIT holders because of the stuff that I’ve mentioned, and that’s everything about the no max supply.
JJBeGood — I believe that in the future not many DEX is going to have a cap for their tokens. What’s important is how the emissions are going to be controlled. With the rebase system that you’ve mentioned, it’ll keep the emissions and stop lockers from getting diluted. This is not very peculiar to this situation/scenario but also a lot of protocols are doing the same. Max supply is really history, I can say from my own experience.
You’ve mentioned a little bit of the compensation, 50% locked tokens will be given to them. You’ve also mentioned 30% to the protocols, which protocols are we talking about here? Is it already predetermined?
Gooro D — It’s not predetermined and it’ll be decided by the DAO. The reason we need 30% allocated is that it’s determined by the DAO what protocols we’ll want to have onboard/partner with. The protocols we’ll join are going to be incentivized by us, that’s how we’ll onboard protocols to our system on Canto. And it’s also all locked and they can’t dump it. The reason we are doing this is so that they have voting power right off the bat, so they will be able to vote on their farms, this is the whole Spirit system and how it works right now. We selected 30% just to give us some room to onboard these new protocols.
JJBeGood — I know that the success of a DEX relies heavily on the protocols on the boat that day. It’ll be like an incentive from us to the protocols in order to deploy their liquidity on this new AMM on the Canto chain. That’s going to be an important aspect, I definitely agree with you.
JJBeGood — There has been another question about the APYs on the Canto Network, which is like 300% APY at the moment. How are we going to exactly compete with that?
Gooro D — We’re not really competing with that. It’s a great question, and the reason why it’s a question is that when you look at that you might think how are we going to succeed? But those pairs are all Canto native pairs so they can reward those pairs way more than any other protocol, so it makes sense. But Spirit is allowing for more pairs and protocols, and it’s going to be tough to compete with Canto pairs. But that’s just for the pairs on there now. Any protocol that’s not going to get native emissions on that AMM, that’s when Spirit will come in. Canto just does it for the native pairs.
One thing though, we have an idea about how to utilize those pairs but they’ll require a new contract so we can do that after this multi-chain implementation.
JJBeGood — That would be very useful for the new users who’ll join the Spirit family on the Canto network. For sure.
I have another question, I know that developers hate this question and many protocols have a tough timeline but want to ask you. What is the rough timeline we can expect as users?
Gooro D — Oh, I really hate that question! (laughs) It’s always tough with software development because you never know what you’re going to run into. But people need to hear a timeline, so I want to buffer it to 2,5–3 months, and we’ll update the community consistently. If we finish it earlier, that’s great! If there’s any reason why there’s a delay we would be communicating with the community way before so it won’t be a last-second delay for sure. I’ll just keep everyone updated.
JJBeGood — That’s even more important than providing a timeline I believe. If you ask me, communicating with the community is even more important than the time it takes to build something. It would be really appreciated.
Gooro D — Oh, for sure. By the way, I just want to clear out something. UpperOctave, the proposal we’re doing is taking SpiritSwap multi-chain. We don’t handle the current SpiritSwap on Fantom chain, that’s DAOs business. We’re just folks on the multi-chain implementation and that’s what we’re focused on.
JJBeGood — Yes, and I am just going to add to that. We recently had a proposal from the Revenant team. A group of developers from the Revenant team are handling the small bugs or maintenance for SpiritSwap V2. At the moment, UpperOctave will have nothing to do with the maintenance on SpiritSwap’s V2 on the Fantom network, but they’ll be responsible to build the infrastructure on Canto Network, and a few maintenance time as well (depending on how everything will go on)
JJBeGood — I do have one more question because that’s a very heated topic. Governance holders, the inSPIRIT holders will benefit from this the most. They will be the most benefited group in this compensation token, but what about the people who only hold the SPIRIT token? They might say that “It doesn’t seem like we’re winning/having any benefit from this.” What would you say to those people?
Gooro D — First, let me clarify something. The DAO is responsible for SpiritSwap on Fantom. No one is abandoning it. Remember, the DAO can only survive and thrive if the SpiritSwap ecosystem is doing well and earns enough to pay for maintenance and to pay for research, development and building of any new protocols/additions/features in the future. The way we can maintain and allow DAO to thrive is by doing this implementation. The fees go back to the DAO in Canto. If this succeeds this will mean more revenue for SpiritDAO, and means more income for SpiritSwap on Fantom. It actually only helps the ecosystem on Fantom.
For the SPIRIT holders, you’re just holding a token, nothing changes there. But inSPIRIT holders benefit more greatly because they are locked and that’s just how the model is structured from the beginning. Just wanted to point this out and mention it.
JJBeGood — I don’t really have any questions left, if there’s anything from the community… I see Grop is typing something, oh okay. Grop is asking “So your argument is a new token on new chain = more income for DAO, so SPIRIT will use this money to keep developing on Fantom?”
Not only Fantom, but for any possibility to expand on other chains, any kind of maintenance, or expansion from Fantom this treasury money will be used if needed. So not only the Spirit platform on Fantom will get some share from out of it. We’d like to be as expanding as much as possible. Why? Because it’s good to be chain agnostic. If there’s an issue on a chain you can still bring income to your users on the other chains. And 2, I honestly think multichain is the way to go. If you have a strong team and can keep the developing team going from chain to chain, in order to keep developing for yourself, that’s also good for both the newcomers and the existing ones. Devin, if there’s you’d like to add there?
Gooro D — Great explanation. The goal is to add revenue streams to DAO, the more revenue streams we can open up, the higher the likelihood we can earn money for the DAO. No one knows how the market will react to Canto implementation or anything. It’s just adding more and more opportunities for DAO to earn money. To answer your question, yes. That’s the plan.
JJBeGood — I was reading other comments as well, and ix said that “There should be a clear path for funds to come from outside Fantom to our ecosystem. Our value should spread out from Fantom and having something like having buybacks from all the chains is the best thing Spirit can do and which can definitely be explored.”
There’s not a certain structure on how multichain structure is going to be handled, so that’s also a thing that DAO needs to discuss and handle. By the way, I agree with you personally. I have always seen Fantom as the home to be personally, don’t mind the market sentiments but it’ll thrive in the future and when it thrives I’ll tell you SpiritSwap will be here because we have the structure in hand. Thank you so much for your comments ix, definitely appreciated.
JJBeGood — First of all, thank you very much for coming here guys and Devin. If there’s anything you’d like to discuss, please use the thread under the proposal and make your voice heard. Devin, do you have any closing comments?
Gooro D — Appreciate everyone listening. Go ahead, take the time, and vote. It’s good to see as many people involved in the proposal as possible. It’ll definitely benefit everyone in the ecosystem, so I am looking forward to it. It just depends on the proposal. Go ahead, take the time to vote. And yeah, appreciated!
JJBeGood — Take care and bye-bye, see you guys!
Why Should You Vote?
By voting “yes”, you can give the UpperOctave team access to the SpiritSwap repos, for them to build out a new structure and the expansion to Canto Network will start.
And by voting “no”, you’ll be voting for doing nothing.
You can find the proposal here: https://snapshot.org/#/spiritswap.eth/proposal/0xb037eedc0a43a37347b694386fd5cc8ae1d379f3a55537c623346c499ad96147
This will be the first-ever chance for SpiritSwap to expand to other chains, so make sure that your voice is heard! As always, thank you for your contribution and we appreciate each and every one of your opinions. Thank you for participating!
SpiritDAO
