What is the future of SpiritSwap? What are we working on?
We have noticed that SPIRIT community are curious about the direction of the project, and how the team plans to tie the tokenomics and inSPIRIT model together. With this article we hope to clarify some things without giving too much away.
Let’s start by pointing out not all users are seasoned veterans. In fact, most are not. This is a good indicator of DeFi’s continual growth. But what it does mean is we may need to explain the bigger picture in a simplified format for the less experienced DeFi users among us. No worries! This article aims to give those users a better understanding of what’s next and how these moves will impact the protocol and SPIRIT token at large.
The next 6 months
Currently, we have a lot on our plate, as we have been focusing on the bigger picture. This may lead the community believing we are being inactive or not shipping quickly. This is inaccurate and contrary. Our next steps can be broken down into three main categories, some we can go into detail on, others we can’t (for security of IP and competitive purposes). However, we can appreciate you are all hungry for updates so we will be as transparent as possible with you.
Phase I — Transition to DAO and migration to boosted farms
Currently, one main focus of ours is to implement and connect the final link in the “inSPIRIT chain” to unlock the full potential of this tech. This involves setting up governance and voting to take place as we transition into a DAO. Once this platform is established, we can then finally migrate all the farms to boosted farms.
The end goal here is to create a system where protocols have in their best interest to acquire inSPIRIT to boost the APRs of their farms. The more inSPIRIT a project has available to vote, the higher the emissions that can be allocated to their farm and the higher the rewards for liquidity provider.These are the DAO to DAO interactions that DeFi 2.0 is all about.
What does this mean?
Quite simply, in order to vote on increased emissions to their “boosted farm”, protocols will start to acquire SPIRIT and lock that SPIRIT up for inSPIRIT to retain voting weight towards their pools emissions. This is quite a huge update to the inSPIRIT model, as up until this point inSPIRIT acquisition has primarily been driven by SPIRIT community members directly. By connecting this “missing link”, the inSPIRIT model effectively opens up from a P2C (protocol to customer/community) driven initiative to a P2P (protocol to protocol) one also. Protocols want to have a higher APR on their pool, as this incentivises more liquidity for that protocol’s main trading pair. By establishing sufficient liquidity we enable more reliable oracles and integrations into lending networks, which also dampens price impacts. This is a positive for the entire FTM ecosystem as a whole.
So the TL;DR here is that with migration of farms to boosted farms it will be within each protocol’s best interest to:
- Acquire SPIRIT
- Lock that SPIRIT up for inSPIRIT
- Use that inSPIRIT to vote for a higher weight of emissions (APR) on their pool
** Note that if a protocol does not have a farm but wants one, by acquiring inSPIRIT it can propose a vote on our DAO forum, where the community can decide whether to add the proposed farm to SpiritSwap’s boosted farms.
The end result will be
- Potential for an increase in adoption of SPIRIT token (via protocol acquisition P2P).
- Reduction in circulating supply, as a result of these protocols locking up large amounts of SPIRIT into inSPIRIT.
- A potential bribe system which benefits all inSPIRIT holders (not winSPIRIT holders). Continue reading below for more info about this.
The deployment of this model could lead to increased acquisition pressure + less supply in circulation = potential for positive price action (although this is not our focus, nor do we guarantee any of this price action happening). What we are focused on is building new tech and innovating, not inciting a centralized pump of our token.
This being said, if positive price action takes effect as a result of the aforementioned process, this will ultimately make farming more lucrative as price is pegged to APR. This establishes a positive feedback loop whereby higher liquidity can enable higher volume which means more fees for buying back SPIRIT and distributing to inSPIRIT holders.
The bribe system — get paid to cast your votes
With this said and done, the cherry on top with the whole P2P narrative is that there is potential and intention to introduce a bribe system. Without getting too technical, this bribe system rewards inSPIRIT holders to allocate their votes to certain pools via other protocols bribing users to swing votes in certain directions.
Let’s say XYZ protocol wants to increase liquidity for their token on SpiritSwap, but the only way to do that is to boost the incentives for liquidity providers.
In order to increase emissions (incentives), XYZ would allocate a set amount of their own token, as a bribe to inSPIRIT holders who are willing to cast their emission votes towards that pool.
This is a win-win for inSPIRIT holders, as these voters will capture rewards from XYZ protocol for simply casting votes in their direction.
If the penny hasn’t dropped yet, inSPIRIT holders have the potential to earn passive income simply by being strategic with where they cast their emission votes. It is important to note for the sake of transparency, that at this point the bribe model won’t be available to winSPIRIT holders, as voting weight is not allocated to winSPIRIT holders, but rather the protocol that owns that winSPIRIT contract. Protocols who have engaged the winSPIRIT model may introduce their own version of bribes at a later stage, but this is at the discretion of each individual winSPIRIT protocol.
At this stage, we expect the DAO transition and the migration to boosted farms to take place Q1 2022 . However we want to stress that there is a lot of effort that goes into orchestrating such a process, so this is a soft deadline for now.
Phase II — UI 2.0 and complete site rebuild
Yes, a full revamp of our UI is underway. This isn’t just an extension to our existing UI to make it better, we are building a new UI from scratch. We have a dedicated team that has been working on this.
The reason for this is two fold:
1. In order for the DEX to run more efficiently than any other DEX on Fantom, we need to get rid of all forked legacy infrastructure to improve code function and deliver better user experience to our community. If we continue to build on top of this of this forked code we will come to a point where adding new features will take 10x longer than it should. This initial upfront investment of building a new UI from scratch will make SpiritSwap one of the most efficient DEXs in the world. Although we can’t take all the credit. Big thank you to the Fantom team for building such an amazing blockchain as our foundation.
2. We want to really make our mark on the DeFi ecosystem, and in order to do so we need to stand out and offer the best user experience possible. Our focal point will be designing in a manner that caters to all experience levels, with a core foundation of education built into the DEX. SpiritSwap’s new design will be a hub for accommodating all experience levels of DeFi enthusiasts.
As I’m sure you can all appreciate at this point, this is a monumental undertaking, as we want to do this right! Currently, designs are pretty much complete (apart from us nitpicking small design optimizations) and development is underway.
Without giving too much away, here is a sneak peak at two of our early design concepts for UI 2.0:
Phase III — Upgrades to the internal workings of the DEX for increased performance
So, inSPIRIT holders will govern the boosted farms, now we need to ensure the AMMs (Automatic Market Makers, that is to say…) those boosted farms incentives are highly demanded and worth governing. We are working on some non-disclosable projects that will make SpiritSwap one of the most technologically advanced DEXs on Fantom. Initial modeling depicts that it will result in SpiritSwap providing the lowest slippage on the whole network among core pairs. We won’t mention any more on this matter for now, however the end game will likely see more volume and deeper liquidity established, leading to an increase in TVL and volume. This is ultimately beneficial to inSPIRIT holders as more volume = more distribution rewards, but it also benefits liquidity providers as more volume means more swap fees, and therefore higher APRs. These updates are actually the most important and hence the least we can discuss for the sake of competition.
We have a vision that is well crafted and thoughtfully planned. Currently, we are taking a methodical approach towards achieving this vision and technical domination/superiority. This being said, a lot of these tasks need to be done in parallel with one and other, in order to be work flow efficient. This means we are working on both linear and vertical development scales. As I’m sure you can understand, this requires a tremendous amount of focus and coordination.
Right now, we are in the process of building out a superstructure of a protocol. As the aforementioned goals and ambitions are incredibly complex and intricate, sometimes things may appear to be slower than they actually are. We want to reassure you that under the hood the metaphorical Spirit engine is running at 10,000 RPM.
Those who share our vision and are dedicated enough to educate themselves and understand the end game, will ultimately be the ones who share our success. SPIRIT is not a short term pump and dump token. It is a token based on solid foundations, with intricate economical mechanics and offers the potential to tap into endless utility (even past the 4 year planned emission cycle unlike competitors). We hope that by sharing these segments of our vision the Spirit community may better understand the direction of our protocol and subsequently the SPIRIT token.
Thank you again for your ongoing support, loyalty and participation in our pursuit of becoming Fantom’s number #1 DeFi hub and DEX.