A new money god: introducing VOLT

A new money god: introducing VOLT

TLDR; this post introduces Volt Protocol, an authorized or “friendly fork” of RAI, as the newest member of the money god league. VOLT is multicollateral RAI. The FLX-like governance token of the system is VCON, the voltage control token. A portion of the VCON supply will be distributed to the Reflexer community.

Money God League?

RAI is the first “reflex index”, a free floating stable currency on Ethereum whose price is stabilized by an incentives system without a dollar peg or reliance on trusted collateral.

The fact that RAI can be minted only against ETH is both a strength and a limitation – it ensures RAI has minimal collateral risk and can be regarded as the most trustworthy stable asset on the Ethereum network. On the other hand, it means most types of borrowing collateral don’t have access to the robust stability mechanics of RAI.

Enter the money god league. The Reflexer team has explored making the technology behind RAI accessible to other protocols and assets. For example, there was previously a proposal to create a DPI-backed reflex asset, take a look at it here.

It’s our belief that there is room in the market for several “money gods”, each with a different backing and thus different risk profile and yields available. If RAI sits at one end of the spectrum (the safest possible collateral, minimized governance, focused on being the most secure and trustworthy stable asset possible), what’s on the other side?

Why VOLT Protocol

Imagine a future with thousands or tens of thousands of on chain assets. It’s impossible for MakerDAO style governance (with a vote needed every time collateral factor is adjusted, new asset onboarded, etc) to scale to this level. The objective of VOLT is to bring the stability mechanisms of RAI to every legitimate on chain collateral.

Volt v1 is the same code as RAI applied to new collateral types such as DeFi tokens. Like MakerDAO, governance will judge which collaterals to include and adjust their parameters. The goal at launch is to support assets underserved by other lending providers like Compound or Maker, that will also have the high yields needed to promote supply growth for VOLT.

Our longer term vision (our flavor of “ungovernance”), is unbundling the powers that are normally used for DAO-wide votes so they can be used by individual VCON holders. For example, in v2, instead of a single staking pool like FLX staking, VCON holders will stake per collateral asset, underwriting risk and earning fees from the target asset as well as influencing parameters like the asset debt ceiling. More details on v2 plans to come, but I wanted to share the goal and mindset we are taking.

Community Alignment

Volt Protocol is a friendly fork working cooperatively with the Reflexer team on our launch. In line with this, we will allocate 6% of total VCON supply to the Reflexer community.

The distribution is planned to occur over 18 months via staking contracts. 4% will be available to FLX/ETH LP holders and 2% to RAI Curve LP holders who stake.

The 6% allocation to the Reflexer community can be considered final, the nature of the disbursement is subject to change based on the preferences of the Reflexer community and any practical considerations that may arise.

We’d love to see overlap between our communities, so if you’re interested in VOLT please come get involved.

Interesting Integrations

VOLT intends to support every legitimate form of on chain collateral. This means there are a few places we can plug into the existing Reflexer systems, and I’d love to hear ideas from the community on this as well. For example:

  • Mint VOLT using RAI deposit receipts from other platforms
    • Deposit RAI into a Fuse pool and get back fRAI. Mint VOLT against this fRAI to engage in leveraged RAI lending
  • Mint VOLT using FLX or RAI LP pairs
    • Increase capital efficiency for LPs by allowing them to use their liquidity positions as collateral

What’s the timeline?

We’re working on all the preparations needed for launch, the hope is to deploy v1 in December. One of the things we’re doing is licensing the PI/D code (which handles RAI’s target price adjustment) from Reflexer labs. We hope this process will help set the stage for other future money gods (hint hint, you might hear about more in the near future).

Who is behind VOLT?

I am @OneTrueKirk on twitter, the initiator of the VOLT and a long time admirer of both the MakerDAO and Reflexer systems. The project is affiliated with the Rari protocol, essentially “incubated” there as a task force. I received a lot of support and feedback from the Rari team during the early stages, and the Rari DAO will also be receiving a share of the VCON supply.

We’re actively searching for contributors, in particular for one or more experienced Solidity developers to partner with me implementing v2. If that’s you please get in touch by sending me a DM on either Twitter or Discord.

Where can I learn more?

It is early and there’s not yet an official website or docs up for the project. We have a discord that is slowly transitioning from its wild west days to a more organized form, please join here if you are interested. Volt Also happy to answer questions here.

Soon we’ll have a public github or website up with more detailed information about the timeline, which collaterals we want to focus on at first, full tokenomics, etc.

Conclusion

Wanted to express my gratitude to Stefan who has been my main point of contact with the Reflexer team and to the community as a whole for being supportive of this project. I count myself very lucky being able to iterate on the great work that’s been done up till today and still ongoing in the Reflexer community.

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Thank you for the post, I’m personally excited to see more RAI-like assets in the wild and really wanna see VOLT flourish :heart_eyes:

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Interesting idea.
I’d like to see distribution to other RAI LP holders - uni v3 and ETH liquidity providers are also important members of the community.

Interesting. Thank you for posting this and making it a “friendly fork”. In principle I like the vision and would like to read more details.

You are talking about 6% of the total supply to be distributed to the Reflexer community. Without knowing the full tokenomics and details, what percentage of the initial supply is this?

Following you in twitter and joined the Discord. Since I love Reflexer I want to be aware of the developments on Volt.

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The tokenomics are still being finalized as we’re getting help from several DAOs with the launch including OlympusDAO, Rari, and possibly getting audit and engineering support from affiliated DAOs. So we are working out the extent of involvement and support from various stakeholders.

Of the total supply, the plan is that about 20% will go to the DAO partners vesting or distributed over 18 months. In the case of the Reflexer community we want to make this available to LPs by request of the Reflexer team, in the case of the other DAOs they will receive our token VCON in their treasury and have an ongoing involvement including in our governance.

Another 10% was allocated for our seed funding with a two year vest.

20% roughly will be allocated for compensation of DAO contributors with a four year vest. We have big plans for v2 and want to make sure to have a strong group of contributors with long term alignment to steward risk in the system and build securely. Would love to hear from anyone with Solidity experience interested in working on the project.

The remainder is reserved in the protocol treasury and is available for use in liquidity incentives, future fundraising or treasury diversification needs, or other purposes.

Tldr, this 6% is more like 12% of the initial supply (only half of supply planned for initial issuance and the rest in treasury), with a shorter distribution than the other categories. Much of the supply is going to DAOs

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We are definitely open to any breakdown of the 6%, the split between FLX/ETH LPs and Curve RAI LPs is the initial suggestion from the Reflexer team. I think this comes down to what the priorities are for the FLX DAO as far as distributing incentives, will wait to hear more input.

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I think we might split the 6% a bit differently, a couple of people pinged with a suggestion like this:

  • 35% for FLX/ETH Uniswap v2 LP
  • 35% for simple FLX staking (single sided)
  • 30% RAI Curve LP
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