RoverDAO: Improving DeFi Fair Launch
Rover’s RGFL — Revenue Generating Fair Launch
View in Google Doc: https://docs.google.com/document/d/19j_rKZuIdZ6kkXc41Csm4QebgAI7erxDAE64SBikpNs/edit?usp=sharing
Rover introduces RGFL for the Rover.capital RTR Token. It achieves the aims of fair launches & DAICO, a term once popularized by Vitalik Buterin to fund projects via smart contracts. Fair launch mechanisms have come some ways since DAICO was suggested. RGFL uses DEX fair launch mechanics already used today, but improves on them, adding liquidity as well as revenue generation for both the project and all holders.
Unlike DAICO, RGFL offers “refunds” to anyone, anytime, via DEX, builds DEX liquidity quickly without presales, and simply pays devs a portion of buy-volume at current prices, meaning that no team tokens nor voting on tap rates are needed for incentive.
RGFL Multiplies LD & Funds Project
RGFL further optimizes DEX Liqudidty Depth (LD) for the market by a median up to 4x when it’s configured to split evenly, 50/50, between DEX & LGE, and LD & operations. This 4x grows rapidly higher as LGE is favored more heavily than a 50/50 split with DEX.
RTR — Rover’s RGFL & Rovlection Transaction Rewards token
RTR token will be launched using RGFL, adding Rovflection tokenomics (like Safemoon, FEG, and others): 5% + 5% rewards to holders and LD from every transaction, accomplished via a multiplier to all holders, and a 10% fee to the transactor.
The 50/50 RGFL Split
RGFL can be configured to grow LD as fast as desirable, wrt to buy volume. This paper uses a median 50/50 split between DEX/LGE per buy volume.
The 50/50 RGFL Split:
- Increases LD by 5x more than it’s reflection tokenomics alone
- 2. Adds 25% more LD every transaction, meaning a 5x high LD/price growth rate
- Yields 4x improvement to LD/price growth in fair launch while funding dev.
Note that far higher, eg, 10x, 100x, or more, LD multipliers can be attained at higher splits, such as 80/20 RGFL splits. Such configurations may be useful as part of a dynamic fair launch, e.g., very early in the launch.
When DEX buy volume is very high compared to initial Liquidity Depth (LD), like 100/1
DEX price would normally grow by 10202x, yet LD would grow only 202x.
LD/price is 202/10202 = 0.0198 in DEX only
LD/price is 202/2602 = 0.077 in RGFL
50/50 RGFL thereby increases LD by 0.077/0.0198 = 3.88x per 100x buy/LD purchases.
These results are explained, very simply, at the end of this paper, after a DEX example.
Improved LD/Price Growth Early in Fair Launch
Rover’s RGFL Rovflection tokenomics improves DeFi by making DEX liquidity grow more quickly with price, while funding dev teams from buy volume.
DEX Recap Example
Say DEX starts out with near 0 Liquidity Depth (LD) of some new token with, say, 1 USD.
DEX liquidity and price growth is illustrated below:
100 USD sent to Rover Fetch by user, to get RTR — Rover Transaction Rewards tokens.
Normally, DEX price and liquidity would work as below. First, recall DEX’s normally use:
DEX Constant Product Model
DEX “constant product model” means the amount of
A * B = K
K is constant after all trades, but changes on LD add/remove. More explicitly:
A amount of token type1 in pool reserves * B amount of token type1 in pool reserves = K.
The spot price of A to B is just the number of A tokens divided by the number of B tokens.
The spot price of B to A is just the number of B tokens divided by the number of A tokens.
The “Constant Product Model” means K is constant in trades, while the 2 token amounts, A & B, in the pool, change when people send A or B to receive the other token — B or A — in return.
For our examples, we’ll use A & B as: some USD stable & our token, RTR, so that:
USD tokens in pool * RTR tokens in pool = K.
Say we start with just 1 USD and 1 RTR:
1 USD * 1 RTR = K = 1.
The spot price of USD to RTR is now 1, meaning sending a tiny bit of USD will return a near equal number of RTR, and vice versa.
Note that sending 1 USD would result in:
2 USD * 0.5 RTR = K =1
K must remain constant, so 0.5 of RTR would need to be sent back to a buyer, to bring RTR down from 1 to 0.5, so that this 0.5 would multiply to 1 K, when multiplied by 2 USD, instead of the previous 1 USD.
2 / 0.5 = 4, which is the spot price of getting a tiny bit more from the 0.5 RTR by sending USD.
The price of 4/1 is now 4x higher than the previous price of 1/1.
LD for the token grows only 2x, to 2 USD.
Price of tokens thus grows as LD². This leaves LD too low in early fair launch before funding.
Rover’s RGFL automatically creates more adequate liquidity from any initial LD while funding dev as price & volume grows. Buyers are incentivized to use the RGFL DEX-LGE split, which reduces the direct DEX slippage. Its RGFL also offers an APY program only via Rover Fetch.
50/50 RGFL Flow at 1x Buy/LD
100% buy from DEX would end in 2 USD * 0.5 RTR = K = 2, worth 4 USD, priced 4/1 USD/RTR
50% buys from DEX so that DEX ends up with 1.5 USD * 0.667 RTR = K = 1
50% goes to LGE, gives buyer 0.50 USD of RTR at DEX spot or 0.50/1.50 * 0.667 = 0.222 RTR
25% of 50%, or 0.25 USD to LGE, goes to operations & DAO wallets.
25% of 50%, or 0.25 USD to LGE, goes to DEX LD, which gets 0.25 USD + 0.111 RTR
DEX then has 1.75 * 0.778 in USD * RTR pool = 1.3615 K
DEX LD in USD = 1.75 * 2 = 3.50 USD
Price USD/RTR = 1.75 / 0.778 = 2.25
LD/price changes from 4/4 = 1 in DEX only, to 3.50/2.25 = 1.55 with 50/50 RGFL
55% improvement to LD/price growth.
3.88x improvement is achieved in the 100x buy to initial LD case.
4x improvement is achieved in the limit as buy volume dwarfs initial LD.
Rover Fetch — 1 Click Total DeFi
Rover Fetch implements RGFL and adds a 3rd split between LGE & APY to aggregate APY for users, while adding Rovflection in points 3 & 4 below:
Here’s how Rover Fetch fetches you RTR with RGFL & Rovflection together
DEX-LGE Split
Rover Fetch allows large early buys at reduced slippage using a DEX-to-LGE split, when DEX LD is still very low. In short: buyers use Fetch to get some tokens from DEX, and some tokens at the DEX price from an LGE — Liquidity Generation Event — that introduces additional tokens into the world and DEX. As LD grows, the split can be reduced from 50/50 to e.g. 80/20. LGE can have a price minimum, ignoring DEX price, when both LD + price is too low. If Price < P && LD < L, then LGE gives A for B at minimum rate R.
LD-Operations Split
Funds sent to LGE to acquire tokens are split (e.g. 50/50) by sending some operations funds to dev & marketing teams, and some back into DEX LD, which greatly increases liquidity wrt to price growth.
Rovflection Tokenomics
Every transaction incurs a 10% fee of Rover that gives 5% to every holder, and to DEX LD as ownerless (rug-proof) liquidity by multiplying their holdings by a factor. The multiplier mechanism works similarly to rebase except that it doesn’t change the supply as the sender loses an equivalent amount from the transaction fee. This Tx fee and rewards system is often called “RFI static”, or “reflection” tokenomics, initially perhaps from the RFI token rewards token system, popularized by such adaptations as FEG & Safemoon.
LGE-APY Split
The bulk of initial tokens do not begin on DEX as they do in other RFI static tokens, where the entire Market Cap (MC), or even Fully Diluted Value (FDV) is represented on DEX, with necessarily low liquidity if the team hasn’t the funds to supply high liquidity without a presale, and not even possible if all tokens are to begin on DEX. Instead, the bulk of the tokens are split 50/50 on LGE & APY contracts. In order to earn APY, users must use Rover to do all of the above, including LGE and LD splits. This way, MC begins extremely low with only eg ~0.1% of the tokens on DEX, and 99.9% awaiting purchase in LGE, which, we remind, offers lower slippage with still high price growth, since DEX LD begins low, and higher liquidity growth speed that reflection alone at 25% of purchases, not just 5%, going directly to LD growth. This amounts to 5x faster LD growth.
Rover RTR: RGFL with Rovlection Tx Rewards
50/50 RGFL therefore gives 4x improvement to LD/price growth in fair launch, and
adds 25% LD to every purchase, which is 5x higher than Rovflection alone, set at 5%.
Recap of DEX mechanics:
DEX “constant product model” means the amount of:
A tokens * B tokens = K, some constant, e.g.
1 USD * 1 RTR = K = 1
RGFL LD Improvement
How 50/50 RGFL improves LD/price by up to 4x.
The more net buy volume wrt to initial LD, the closer to 4x.
After 100x the net buy volume, the improvement is 0.077/0.0198 = 3.88x per 100x LD growth:
If a relatively large amount, like 100 USD, is sent to buy RTR, in a pool of just 1 USD,
DEX price would normally grow by 10202x while LD growth only 202x, or 10202/202 = 50.5x.
RGFL improves LD growth at the critical early period to 2602 price per 202x LD = 12.88x.
LD/price is 202/2602 = 0.077 in RGFL.
LD/price is 202/10202 = 0.0198 in DEX only.
3.88 = 0.077/0.0198
50/50 RGFL Split at 100x Buy/LD
100 USD sent to Rover Fetch, to get Rover RTR tokens.
Without RGFL:
DEX would have 101 USD * 0.00990 RTR
DEX LD would be 101 * 0.00990 = K =1
50%, or 50 USD, goes to buy RTR in DEX, which results in:
51 USD * 0.0196 RTR = 1. To keep K constant at 1, RTR reserves drop from 1 to 1/51 = 0.0196.
The buyer will get this RTR from the DEX change: 1–0.0196 = 0.984 RTR.
50% (50 USD), goes to LGE to return more RTR to the buyer without incurring higher slippage if DEX were used with 100% of the USD. The equivalent value of of 50 USD of RTR tokens at the current DEX spot price 50/51 * 0.0196 = 0.0192 RTR) goes to the buyer.
Buyer gets this 0.00192 RTR from LGE’s reserves, which begins as e.g. 50% of total tokens.
Buyer got a total of 0.984 + 0.0192 RTR.
From that 50% (50 USD) incoming to LGE:
50%, or 25 USD in LGE goes to any wallets, like for dev, marketing, DAO, charity, etc.
50%, or 25 USD & 0.0096 RTR (25 / 51 * 0.0196 of USD*RTR in DEX) adds to DEX LD.
DEX LD grows by (50/51)² * 150% or ~1.49 * ~1.49 = ~2.22x, via the 50 USD, which is
DEX now has RTR pool reserves of 76 USD and 0.0196 + 0.0096 RTR = 0.0292 RTR.
Price = 76 USD / 0.0292 RTR = 2602 USD per RTR
DEX LD = holds 76 USD + 76 USD worth of RTR = 152 USD value
DEX LD = USD * RTR = 76 * 0.0292 = 2.2192 K higher, from ~1.49 * ~1.49 (*) to DEX
2.22x is the growth of LD wrt to just buying from DEX 100%
3.88x is the growth of LD when price reaches the same point as 100% DEX
4x is the limit of this LD/price growth, as net buy volume dwarfs initial LD.
Much higher multipliers would result from steeper splits, like 80/20 DEX to LGE.
As mentioned, Rovlection uses a holdings multiplier to add another 5% to LD, and every holder, with every transaction fee. The multiplier mechanism works similarly to rebase except that it doesn’t change the supply as the sender loses an equivalent amount from the transaction fee.
Rovflection, by using Fetch, is furthermore able to send to DAO and burn addresses on every transaction. It applies 1% to each of these. This goes beyond reflection.
Rover Fetch Flow Chart — RGFL & Rovflection
Using 3 50/50 Splits + Rovflection:
- 50/50 DEX-LGE Split
- 50/50 LGE-APY Split
- 50/50 LD-Ops Split
- Rovflection gives 5% to LD & holders in reflection + sends 1% to DAO & 1% to burn
Rover Fetch — 1 Click Total DeFi:
User sends funds (here as “USD”) to Fetch to get back RTR-APY, a staked token for RTR
USD is actually in the form of e.g. ETH on any EVM, but USD tokens may be supported also.
SPLIT 1: DEX-LGE
=> DEX gets 50% USD, returns 50% RTR to Fetch
SPLIT 2: LGE-APY: 1 token APY for every 1 token bought from LGE; 50/50.
=> APY gets the 50% RTR, generates another 50% RTR to release rewards over 2y.
=> LGE gets 50% USD, returns 50% RTR, in the same amount as DEX, to Fetch
SPLIT 3: LD-Ops: Split USD to LD & operations. In terms of 100%, it’s split as such:
=> 25% USD to funding project operations (dev, marketing, charities)
=> 25% USD to obtain RTR, from LGE reserves, at DEX spot price
=> LGE puts 25% USD + 25% RTR back into DEX LD using obtained RTR
Rovflection rewards 5% to DEX LD & holders every transaction, as per normal reflection, and directly sends another e.g. 1% RTR-APY (staked RTR) to DAO & 1% RTR to the burn address, which, unlike other reflection tokens, can be seen in every transaction that uses Rover Fetch.
Conclusion
Rover’s launch mechanisms, using RGFL splits and Rovflection via Rover Fetch, achieves the while substantially improving on DEX Fair Launch DeFi mechanics in terms of liquidity, refund simplicity & individuality, dev funding, project longevity, and holder revenues.
