The Decentralized Finance (DeFi) category covers everything from stablecoin projects like Frax Finance to concepts like Yield Farming to the oracles which power DeFi like Chainlink.

Decentralized Finance

A blockchain is an open, decentralized ledger that records transactions between two parties in a permanent way without needing third-party authentication.

Blockchain

**DeFi (Decentralized Finance)** is the concept of a decentralized financial system where there are open and decentralized alternatives to the closed centralized financial system. DeFi [dapps](https://iq.wiki/wiki/decentralized-application-dapp) and protocols use technologies like [blockchain](https://iq.wiki/wiki/blockchain) and [smart contracts](https://iq.wiki/wiki/smart-contract) to offer financial services more transparently with fewer intermediaries.[\[1\]](#cite-id-m9xgwkn95l)[\[2\]](#cite-id-1q5qqw21c96)[\[3\]](#cite-id-9oef1946ncp)  
  
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# Overview  
  
DeFi (Decentralized Finance) generally refers to digital assets, protocols, and decentralized applications ([dApps](https://iq.wiki/wiki/decentralized-application)) that are built on the [blockchain](https://iq.wiki/wiki/blockchain).[\[4\]](#cite-id-iddops51vfm) DeFi is a financial service with no central authority. It involves taking traditional elements of the financial system and replacing the middleman with a [smart contract](https://iq.wiki/wiki/smart-contract).[\[5\]](#cite-id-gl0dt2tnuxi)  
  
Most DeFi protocols operate on the [Ethereum](https://iq.wiki/wiki/ethereum) blockchain, although a few have migrated to other competing blockchains to have higher scalability.[\[6\]](#cite-id-ao542424ihv)[\[7\]](#cite-id-s852wxyn7u)  
  
DeFi leverages all of the properties attributed to Ethereum:  
  
* **Permissionless**: Anyone can access all DeFi services without a third-party engagement. Users do not have to seek permission to interact with a [smart contract](https://iq.wiki/wiki/smart-contract).  
* **Censorship Resistant**: No person is restricted from using DeFi services due to any identifying characteristics such as nationality, gender, or political beliefs.  
* **Programmable**: Any service which can be coded into a smart contract, can be introduced as a DeFi service.  
* **Transparent**: All smart contracts are available for analysis and verification. Additionally, all user interactions can be tracked, making DeFi fully transparent.  
* **Compostability**: DeFi services can leverage each other to create new offerings and servers.  
* **Trustless**: All transactions and interactions with the smart contract are visible on the ledger and secured by the underlying blockchain.[\[32\]](#cite-id-z44hw41jn2i)  
  
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# History  
  
## Inception (2017-2018)  
  
DeFi term was created in an August 2018 Telegram chat between [Ethereum](https://iq.wiki/wiki/ethereum) developers and entrepreneurs including Inje Yeo, Co-founder of Set Protocol, Blake Henderson of [0x](https://iq.wiki/wiki/0x), and Brendan Forster of Dharma. They were trying to find the name for the movement of open financial applications being built on Ethereum. Except for "DeFi", other options considered were Open Horizon, Lattice Network, and Open Financial Protocols.[\[33\]](#cite-id-9mdyhr6zn1g) Finally, the chat members came up with DeFi.[\[8\]](#cite-id-r9k10r3ivk)  
  
Shortly after, on October 4, 2018, the group held its first DeFi summit in San Francisco in collaboration with Dharma Protocol, [0x](https://iq.wiki/wiki/0x) Project, [Coinbase](https://iq.wiki/wiki/coinbase), Abacus Protocol, and many others.[\[9\]](#cite-id-2f0zmo09x4w) Since the first summit, hundreds of conferences around the globe were held. Additionally, the DeFi Telegram has seen exponential growth.[\[10\]](#cite-id-dcmpgnmij5k)  
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## Growth (2018-2022)  
  
The value of DeFi protocols grew fast with the growth of the community. In July 2018, DeFi protocols were valued at $181 million. Almost exactly a year later, its collective value broke $500 million. In addition to this milestone, DeFi began to see the diversifying in where protocols are held, as [MakerDAO](https://iq.wiki/wiki/makerdao) previously held more than 91% of DeFi's value in December of 2018, and lowered its share by 20% that same July.[\[11\]](#cite-id-mhuec2g0yi) February 7, 2020, saw DeFi's value enter the billion-dollar milestone. Spencer Noon of DTC Capital said in a statement:  
  
> No other smart contract platform comes close in terms of its developer mindshare, tooling, and infrastructure, to the point where I don't believe DeFi could exist anywhere else today. And perhaps most surprisingly, we're finally seeing a credible case for ETH to accrue a long-term monetary premium as the only truly trustless collateral type in decentralized finance.[\[12\]](#cite-id-fyrwwit10lg)  
  
Shortly after, the total locked value saw a dip and swiftly returned back to its billion-dollar milestone around early June 2020. A major contributor to the growth was the DeFi governance tokens that began to appear on the market. The DeFi world saw the introduction of native governance tokens from firms including [Compound](https://iq.wiki/wiki/compound), [Balancer](https://iq.wiki/wiki/balancer), UMA, [Curve Finance](https://iq.wiki/wiki/curve-finance), and [pNetwork](https://iq.wiki/wiki/pnetwork) which can be acquired through protocol usage.[\[13\]](#cite-id-d7ey9nuilif)[\[14\]](#cite-id-vs6afmcpxr)  
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As a result, the total value locked ([TVL](https://iq.wiki/wiki/tvl)) on protocols with governance began to see quick liquid growth.[\[15\]](#cite-id-awvyongo0tr)  
  
Around early May 2020, [Bitcoin](https://iq.wiki/wiki/bitcoin) entered the DeFi ecosystem through WBTC, as it was added to [MakerDAO's](https://iq.wiki/wiki/makerdao) platform, and came with a 0% USD Coin stability fee.[\[16\]](#cite-id-2vtk6xdy0es) [RenVM](https://iq.wiki/wiki/renvm), a platform used for minting [Bitcoin](https://iq.wiki/wiki/bitcoin), [Bitcoin Cash](https://iq.wiki/wiki/bitcoin-cash), and Zcash into [ERC20](https://iq.wiki/wiki/erc-20) tokens was launched. The introduction of the platform contributed to the increase in value, as Bitcoin holders were able to use their digital assets within the "DeFi landscape".[\[17\]](#cite-id-ffb4bbbiqb) Another major launch that contributed to the increase was [dYdX's](https://iq.wiki/wiki/dydx) launch of Perpetual Contracts and its first product was the ability to trade BTC-USDC with up to 10x leverage on Ethereum. The growing interest in Bitcoin futures created a domino effect, adding to DeFi's total value-locked growth.[\[18\]](#cite-id-bzni6zi4w7t)  
  
The increase in total value locked was also attributed to the introduction of Ethereum Merge, which launched phase one in July 2020.[\[19\]](#cite-id-rbpvxbzske8) Companies including [Nexus Mutual](https://iq.wiki/wiki/nexus-mutual), a decentralized insurance protocol, expressed interest in its plans to stake a large portion of its current assets into Eth 2.0.[\[20\]](#cite-id-2sisn13sb03) Investors hoped that the introduction of [Proof-of-Stake](https://iq.wiki/wiki/proof-of-stake) (PoS) would provide those who staked with the ability to earn rewards for "validating blocks".[\[21\]](#cite-id-1vaty4pjkz)  
  
In addition to the growing confidence in what the future holds for Ethereum and Eth 2.0, the Ethereum network began to hit all-time highs in traffic. As a result, the number of DeFi assets exponentially grew and even saw a doubling in assets being held between April and May of 2020, reaching 1,000 for the first time, and users reaching over 550,000.[\[23\]](#cite-id-fihzw79kjm8) Also, the median transaction fees found in DeFi and [stablecoin](https://iq.wiki/wiki/stablecoin) hit a 2-year high, with around $2.56 spent alone on Ether gas fees within the month of May 2020.[\[24\]](#cite-id-xubn4xnxrn) The total value locked (TVL) in DeFi platforms exceeded the $5 billion mark in August 2020. This is a 5x increase in just 60 days since reaching the $1 billion mark in early June 2020.[\[25\]](#cite-id-3kvivxqxmyb)  
  
As of August 16, 2020, a record high of $6 billion worth of crypto was locked in DeFi smart contracts, according to data analytics site [DeFi Pulse](https://iq.wiki/wiki/defi-pulse). [MakerDAO](https://beta.everipedia.org/wiki/makerdao), [Aave](https://iq.wiki/wiki/aave), and [Curve Finance](https://iq.wiki/wiki/curve-finance) led the pack, with some $4.2 billion locked in between them.[\[26\]](#cite-id-wxv3tb72aua)  
  
As of March 2021, DeFi's total value locked (TVL) increased from about $25 billion to almost $100 billion. With a wealth of consumer success, DeFi began aiming for institutional adoption as its next objective.[\[27\]](#cite-id-owfz35ky50r)  
  
On December 2, 2021, DeFi recorded an all-time high total value locked (TVL) of $256 billion. On April 3, 2022, the total value locked (TVL) in DeFi fell to $231 billion as it began to enter the bearish market. As of September 2022, the total value locked (TVL) in DeFi is approximately $54.95 billion. The TVL has not been this low in over five months since March 29, 2022.[\[29\]](#cite-id-pldp0jowcws)[\[31\]](#cite-id-il0hcsd6l3j)  
  
# Use Cases  
  
## Decentralized exchanges (DEXs)  
  
Decentralized exchanges are typically built on top of different blockchains, making their compatibility specific to the technology on which they are developed. DEXs built on Ethereum’s blockchain, for example, facilitate the trading of assets built on Ethereum, such as [ERC-20](https://iq.wiki/wiki/erc-20) tokens. DEXs allow users to store assets away from a centralized platform while yet enabling on-the-fly trading from their wallets via blockchain-based transactions. [Automated market makers](https://iq.wiki/wiki/automated-market-maker), a type of DEX, became prevalent in 2020 and use [smart contracts](https://iq.wiki/wiki/smart-contract) and [liquidity pools](https://iq.wiki/wiki/liquidity-pool) to facilitate the purchase and sale of crypto assets. Additionally, certain DEXs may have fewer features and higher associated financial fees than centralized exchanges.[\[34\]](#cite-id-9djbq0ajag6)  
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## Lending Platforms  
  
In DeFi, lending and borrowing are now among the most common activities. Users can borrow money utilizing lending protocols while using their [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) as security. With loan solutions commanding billions of dollars in total value locked (TVL), decentralized finance has seen vast amounts of cash flow through its ecosystem.[\[34\]](#cite-id-9djbq0ajag6)  
  
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## Payments and Stablecoins  
  
DeFi requires a stable unit of account, or asset, in order to be considered a financial system that consists of transactions and contracts. Participants must be able to anticipate that the value of the asset they are using won't change. [Stablecoins](https://iq.wiki/wiki/stablecoin) are useful in this situation.[\[34\]](#cite-id-9djbq0ajag6)  
  
The lending and borrowing that are typical in the DeFi market are made stable using stablecoins. Stablecoins are preferred for trading and business because they don't display nearly as much volatility as cryptocurrencies do because they are typically fixed to a fiat currency, such as the U.S. dollar or the euro.  
  
As of October 2022, the top five stablecoins include Tether (USDT), USD Coin, [Binance USD](https://iq.wiki/wiki/binance-usd), [DAI](https://iq.wiki/wiki/dai), and [FRAX](https://iq.wiki/wiki/frax-stablecoin).  
  
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## Margin and Leverage  
  
The margin and leverage components take the decentralized finance market to the next level, allowing users to borrow cryptocurrencies on margin using other cryptocurrencies as collateral. Additionally, leverage can be built into smart contracts to perhaps increase the user's returns. Given that the system is dependent on algorithms and lacks a human component, an event of a malfunction increases users' risk during the usage of these DeFi components.[\[35\]](#cite-id-bka8p35zxsv)  
  
## Insurance  
  
Another significant aspect of DeFi is insurance. A financial organization will insure clients against potential losses in exchange for a premium payment from them. Code and smart contracts manage a lot of money in the DeFi area, and there are already innumerable examples of smart contract exploits and attacks where billions have been taken. DeFi insurance protocols let users protect themselves against the possibility of a protocol being exploited when they have money locked. By employing permissioned-[blockchains](https://iq.wiki/wiki/blockchain) to store and manage policies, smart contracts help insurance companies create a more cost-effective business.[\[35\]](#cite-id-bka8p35zxsv)  
  
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# Components  
  
## Smart Contracts  
  
The exchange of products, services, data, money, and other items is made easier by the use of smart contract code, which is used by many DeFi protocols and [decentralized applications](https://iq.wiki/wiki/decentralized-application) (DApps). DApps must use smart contracts to make sure that every transaction is legitimate, transparent, and trustless — and that goods or services are, in fact, being transferred in line with the predetermined provisions of the agreement.[\[36\]](#cite-id-rg64syduku9)  
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## Aggregators and Wallets  
  
Aggregators are the interfaces by which users interact with the DeFi market. They are essentially decentralized systems for asset management that automatically switch users' crypto assets between several [yield-farming](https://iq.wiki/wiki/yield-farming) platforms to maximize returns.  
Digital assets are stored and traded through wallets. Wallets can be found in a variety of formats, including software, hardware, and exchange wallets. They can contain a variety of assets or simply a single item. Wallets such as self-hosted wallets—wallets for which users manage their private keys are a crucial part of DeFi as they facilitate a variety of DeFi platform uses. [\[34\]](#cite-id-9djbq0ajag6)  
  
## Decentralized Marketplaces  
  
Decentralized marketplaces represent a core use case for [blockchain](https://iq.wiki/wiki/blockchain) technology. They put the “peer” in peer-to-peer networks in that they allow users to transact with one another in a trustless way, that is, without the need for an intermediary. The leading blockchain allowing decentralized marketplaces is the Ethereum smart contract platform, but there are numerous others that let users sell or exchange particular assets, including [Non-fungible tokens (NFTs)](https://iq.wiki/wiki/non-fungible-token-nft).  
  
## Oracles/Prediction markets  
  
[Oracles](https://iq.wiki/wiki/oracle) deliver real-world off-chain data to the blockchain via a third-party provider. Oracles have paved the way for the prediction markets on DeFi crypto platforms where users can place rely on the outcome of an event, ranging from elections to price movements, for which the payouts are made via a smart contract-governed automated process.[\[34\]](#cite-id-9djbq0ajag6)  
  
## Layer 1  
  
Layer 1 represents the blockchain that the developers choose to build on. It is where the DeFi applications and protocols are deployed. Ethereum is the main layer-1 solution in decentralized finance but there are alternatives, including [Polkadot](https://iq.wiki/wiki/polkadot), Tezos, Solana, [BSC](https://iq.wiki/wiki/binance-smart-chain), [Cosmos](https://iq.wiki/wiki/cosmos), and others.  
  
Having DeFi sector solutions run on different blockchains has several potential benefits. Blockchains may be forced to improve speed and lower fees, based on the performance of competing blockchains, creating a competitive environment that potentially results in improved functionality. The existence of different layer-1 blockchains also leaves more room for development and traffic, instead of everyone trying to pile onto a single layer-1 option.[\[34\]](#cite-id-9djbq0ajag6)

DeFi (Decentralized Finance) is an umbrella term for peer-to-peer financial services on public blockchains, primarily Ethereum.

DeFi

Ethereum Name Service (ENS) is an open-source, distributed, and extensible naming system based on the [Ethereum](https://iq.wiki/wiki/ethereum) blockchain, which allows users to create human-readable names for Ethereum addresses and other content in place of long wallet or service addresses. Additionally, it works similarly to Domain Name System (DNS) and enables a secure and [decentralized](https://iq.wiki/wiki/decentralized-application) way to address websites and resources via names rather than numbers.[\[1\]](#cite-id-lm7wqlkrdr)[\[2\]](#cite-id-bonotrk7mks)[\[8\]](#cite-id-3akq76lje3d) On secondary markets, anyone can buy and sell ENS domains as NFTs. Each address corresponds to a user's web3 username.  
  
# Overview  
  
$$widget0 [YOUTUBE@VID](wDPy-SIwHOU)$$ENS is an open and [decentralized](https://iq.wiki/wiki/decentralized-application) naming and lookup system built on the [Ethereum](https://iq.wiki/wiki/ethereum) [blockchain](https://iq.wiki/wiki/blockchain) which helps users to easily transfer funds and also access websites and resources such as smart contracts, wallet addresses, and more with ease using just simple names in place of blockchain or [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) addresses. It is built on Ethereum’s [smart contract](https://iq.wiki/wiki/smart-contract), making it more secure, private, and resistant to censorship than the DNS.  
  
Its primary function is to map human-readable names like ‘vitalik.eth’ to machine-readable identifiers such as Ethereum addresses or any other [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) addresses, content hashes, and metadata. it also helps ‘reverse resolution’, making it possible to associate metadata such as canonical names or interface descriptions with Ethereum addresses.[\[3\]](#cite-id-ar76vwjcc0n)[\[4\]](#cite-id-5dpulvspm7f)  
  
ENS Domain names are [Non-Fungible Tokens (NFTs) ](https://iq.wiki/wiki/non-fungible-token-nft-1) and follow ERC-721 standards. These domains can be traded on NFT marketplaces such as [OpenSea](https://iq.wiki/wiki/opensea).[\[5\]](#cite-id-1ev0mcsumt4)[\[6\]](#cite-id-2vomlo2n1qo) Apart from using just a Domain service, The users can even develop a decentralized website using ENS and a decentralized storage system known as InterPlanetary File System.[\[11\]](#cite-id-2gosmynk2n3)  
  
# History  
  
The Ethereum Name Service was first launched \\by the Ethereum Foundation back in May 2017 and it was introduced by developers Nick Johnson and Alex Van de Sande, allowing users to register .eth domain names and link them to Ethereum resources. It then divided into an independent organization, True Names Ltd in May 2018. True Names Ltd is a non-profit organization registered and based in Singapore.[\[24\]](#cite-id-72bk9hfvytu)  
  
Currently, ENS is managed by them with the help of the [Ethereum](https://iq.wiki/wiki/ethereum) Community. Initially, ENS has supported only .eth domain names, but over the years, the team added support for many DNS names (TLD s), including .xyz , .kred, .luxe , .club, and .art.[\[7\]](#cite-id-0romjnhl3a3m)  
  
# Tech  
  
The registry and resolvers are the ENS's two main parts, which are the two Ethereum [smart contracts.](https://iq.wiki/wiki/smart-contract)  
  
## ENS Registry  
  
The registry records the domain name, it consists of a single smart contract that maintains a list of all domains and subdomains, and stores the following vital information about, the owner of the domain, the resolver for the domain, and lastly the caching time-to-live for all records under the domain.  
  
The basic agreement at the center of ENS resolution is the ENS registry. All ENS lookups begin with a registry search. The registry keeps a record of all domains and records the owner, resolver, and TTL. Each domain owner is given the ability to edit this information.[\[12\]](#cite-id-okrnq0d2d)[\[13\]](#cite-id-hjmiv0eqeyd)  
  
## ![spaces_-LZWNj0_mU4_3ENJbw83_uploads_git-blob-131fdde717920b27e6aae5aac41bdbd088b6123c_ens-architecture.png](https://ipfs.everipedia.org/ipfs/QmXoFu6cNJR2zD2Et587Dy6dHK5uaDhWJD96ocsaKcQzsk)The Resolver  
  
The Resolver translates machine-readable addresses into domain names for the users. Any agreement that meets the appropriate standards is qualified to serve as an ENS resolver. For users with simple requirements, like serving a rarely modified address for a name, general-purpose resolver options are available.  
  
In ENS, names are resolved in two steps: first, the user is expected to ask the registry which resolver is in charge of the name, and then they must ask that resolver to respond to their inquiry.[\[14\]](#cite-id-1b58ktat4km)  
  
# Use Cases  
  
## Crypto Transaction  
  
Users who regularly transact through crypto can assign an ENS to their [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) wallet for ease of use. This minimizes the risks of sending crypto to the wrong addresses often associated with using long and unmemorable addresses.[\[3\]](#cite-id-ar76vwjcc0n)  
  
## Multiple Address  
  
A user can assign several addresses to their ENS domain, which lets them receive any digital currency or NFT. Due to the contextual functionality of these multi-address domains, users can map both their web3 wallet and their Ethereum wallet to the same domain.[\[7\]](#cite-id-0romjnhl3a3m)  
  
ENS unifies different web services into one source. A user's website is the destination when they enter their ENS domain into a web browser. The exchange or dApp they use will automatically recognize your crypto address when they use their ENS to send or receive [cryptocurrency](https://iq.wiki/wiki/cryptocurrency).[\[11\]](#cite-id-2gosmynk2n3)  
  
## Decentralized Websites  
  
Users can also assign ENS domains to decentralized websites, such as those hosted by the InterPlanetary File Systems (IPFS), which requires a higher technical knowledge. Likewise, ENS spreads out DNS capacities by allowing users to register their DNS names.  
  
Those who own a website registered with the DNS domain that hosts their resume and academic certificates can link their DNS-registered website with their ENS domain if they want to maintain one ENS domain name for their website, crypto address, LinkedIn account, Github, and many more.[\[12\]](#cite-id-okrnq0d2d)  
  
## Immutability  
  
ENS transactions are immutable since they are powered by smart contracts that operate on the [Ethereum](https://iq.wiki/wiki/ethereum) [blockchain](https://iq.wiki/wiki/blockchain). All ENS records are unchangeable and unalterable, similar to blockchain technology.  
  
## Monetizing ENS Domains  
  
ENS domains follow the ERC-721 token standard, meaning users can trade, transfer, or use them as collateral to secure a crypto loan. On online markets like [OpenSea](https://iq.wiki/wiki/opensea) or [Rarible](https://iq.wiki/wiki/rarible), an individual's domain name is available for purchase or sale as an [NFT](https://iq.wiki/wiki/non-fungible-token-nft-1). On lending services like NFTfi, users can still use it as collateral to secure a loan.[\[15\]](#cite-id-uiodibrxlk8)[\[16\]](#cite-id-d9r93i54dh7)  
  
# ENS Token  
  
ENS is the governance token of Ethereum Name Service and is used to govern the protocol and influence decisions on pricing its .eth addresses and the price oracle. It is an [ERC-20](https://iq.wiki/wiki/erc-20) token built on the [Ethereum blockchain](https://iq.wiki/wiki/ethereum). Holders of the token can also delegate their tokens to the [DAO](https://iq.wiki/wiki/dao) for voting.[\[18\]](#cite-id-j8xicax9wns)  
  
## Token Distribution  
  
![img5_ens.jpg](https://ipfs.everipedia.org/ipfs/QmNQUdpwfLwoYZVWHPsuT2KW4teuUvzJB5wbSZbU5wB3u6)Early adopters who had previously registered an ENS domain name were airdropped by the ENS token. Users had from November 8th, 2021, through May 4th, 2022, to claim the tokens they were entitled to. The airdrop was used to distribute 25% of the overall supply.  
  
* DAO Community Treasury (50%): 10% at launch, linear vesting over four years.  
* Airdrop to.ETH holders (25%)  
* Contributors (25%), with four-year linear vesting including:  
    Core Contributors: 18.96%  
    * Select Integrations: 2.5%  
    * Future Contributors: 1.25%  
    * External Contributors: 1.29%  
    * Launch Advisors: 0.58%  
    * Keyholders: 0.25%  
    * Active Discord Users: 0.125%  
    * Translators: 0.05%[\[18\]](#cite-id-j8xicax9wns)  
  
## Funding  
  
ENS had no VC investors. However, the protocol has received financial support from the Ethereum Foundation, [Binance](https://iq.wiki/wiki/binance), [Ethereum Classic Labs](https://iq.wiki/wiki/ethereum-classic), and Protocol Labs.  
  
# ENS DAO  
  
The ENS DAO is a [DAO](https://iq.wiki/wiki/dao) that governs the ENS protocol. Delegate systems often serve as the ENS DAO's framework and give members the ability to select their representatives. Individual members can therefore make suggestions for revisions or propositions, and others will vote on them. Even though ENS is [decentralized](https://iq.wiki/wiki/decentralized-application) and its [DAO](https://iq.wiki/wiki/dao) runs without human oversight, some operations, such as the multi-sig contracts that control the registrar contract and the treasury, call for human interaction.[\[25\]](#cite-id-e57i9dkj28)  
  
The DAO is run by the ENS Constitution. It is a set of binding rules that determine what governance actions are legitimate for the DAO to take. The ENS DAO was established to manage the ecosystem.[\[26\]](#cite-id-xzkffls453t)  
  
The ENS governance Process includes Venues, a Discourse forum for discussions about governance, located at discuss.ens.domains. Snapshot is the second, straightforward voting interface that enables users to express sentiment off-chain. Governance Portals is the third option. Token holders may delegate their votes through the governance portal Tally, which also enables delegates to draft and vote on binding proposals. Another such governance portal is Sybil.[\[27\]](#cite-id-zqosmc9cja9)[\[28\]](#cite-id-fwsotujccmp)  
  
### Types of Proposal  
  
Users can vote on many things in the DAO, including:  
  
1. Executable Proposal: Executable proposals for several smart contract actions, such as dividing up the liquid token pool among grants for Web3 development.  
2. Social Proposal: Off-chain social suggestions are made to add or remove directors, members, or supervisors.  
3. Constitutional amendments: Amendments to the Constitution that change how the ENS carries out its mandate.[\[29\]](#cite-id-imtsrpgi8b)  
  
# ENS Foundation  
  
![FWHGYzcXoAAXVax.jfif](https://ipfs.everipedia.org/ipfs/QmWoVYevCMeKZXJa2PLRCpRezQYgDYRtEo8W2Q2KiTxBeq)The ENS Foundation is a Foundation Company Limited By Guarantee, incorporated in the Cayman Islands.  
  
The ENS Foundation cannot distribute dividends to its directors or members because it has no shareholders and is a nonprofit organization.  
  
Three members of the ENS core team serve as directors for the ENS Foundation: Nick Johnson, Brantly Millegan, and Kevin Gaspar. Directors are in charge of managing the foundation's daily operations.  
  
The ENS Foundation has only one manager. It is the responsibility of the supervisor, a position in the administration, to ensure that the directors are carrying out their duties in line with Cayman Islands law. An organization from the Cayman Islands called DS Limited holds the job of supervisor.  
  
The ENS Foundation's Articles of Incorporation give significant powers to the ENS DAO (referred to as "The Council" in the Articles). The DAO may vote to:  
  
* Appoint or remove a director, member, or supervisor.  
* Prohibit admitting any members in the future.  
* Instruct the directors to wind up the foundation, and specify what charity or other foundation should receive the foundation's assets.[\[30\]](#cite-id-mtaj6kioero)  
  
# Partnerships  
  
### ENS x Coinbase  
  
Aligned with its mission to make web3 more accessible, ENS announced on September 20, 2022, it's partnering with [Сoinbase](https://iq.wiki/wiki/coinbase) to create cb id usernames, free-to-claim web3 usernames. Existing .eth addresses can connect existing names to seamlessly transact and build out your web3 digital identity.[\[20\]](#cite-id-jrplzprni1c)  
  
### ENS x Huobi  
  
ENS announced on July 2022, it is partnering with [Huobi](https://iq.wiki/wiki/huobi) to provide infrastructure for ENS users to use ENS domains on the Huobi platform.[\[32\]](#cite-id-k4yt45f001)  
  
# Notable Sales  
  
$$widget0 [YOUTUBE@VID](5YBkujGj-DI)$$In October 2021, paradigm.eth which is known as the most expensive ENS domain, sold for 420 ETH,  $1.5 million at the time of purchase.  
  
On the 3 of July 2022, ENS 000. eth sold for 300 ETH, following the sale of porno.eth for 184 ETH on the 29 of June 2022.  
  
On the 7th of February 2022, amazon.eth sold for 33 ETH.[\[32\]](#cite-id-sw3jtgjjc1)  
  
# Team Members  
  
The ENS team includes:  
  
* Khori Whittaker - Executive Director  
* Nick Johnson - Creator & Lead Developer  
* Jeff Lau - Frontend & Solidity Developer  
* Makoto Inoue - JS & Solidity Developer  
* Kevin validator.eth - Support Lead  
* Leon Talbert - Frontend Developer  
* Richard Moore - Advisor  
* Muhammed Tanrıkulu - Full Stack Developer  
* alisha.eth - Governance Lead  
* taytems.eth - Frontend Developer  
* davidchu.eth - Frontend Developer  
* Luc van Kampen - Developer Relations  
* Dom Perri - Product Designer[\[31\]](#cite-id-gudp8u10c6l)  
  
# Controversy  
  
Ethereum Name Service (ENS) backers, True Names Ltd filed a lawsuit against the web host giant GoDaddy. It was claimed that GoDaddy sold the domain name Eth.link to Manifold Finance in an unauthorized manner.  
  
The US District Court for the District of Arizona received a complaint from True Names Ltd, stating Eth.link would have expired on July 26, 2023, according to court filings, but GoDaddy asserted that the name had expired on July 26, 2022, and it was sold on September 3, 2022.  
  
True Names Ltd. requested a temporary restraining order against GoDaddy as well as $75,000 in damages, excluding attorney fees.  
  
ENS took to its Twitter on the 19 of September 2022, to announce that the eth.link is now back online.[\[21\]](#cite-id-00493vpy4jg3u)[\[22\]](#cite-id-suwiu9poipd)[\[23\]](#cite-id-612ckbzx3e)  
  
> We're delighted to report that http://eth.link is now back online! Our injunction was successful and the name has been returned to us. Users are welcome to resume using the service - or keep using the excellent community-run alternative, http://eth.limo.

Ethereum Name Service is a decentralized, open source, and permissible naming system which runs on the Ethereum smart contracts.

Ethereum Name Service

Alameda Research was a quantitative cryptocurrency trading firm and liquidity provider. On November 11, 2022, the firm announced that it would be filing for Chapter 11 bankruptcy. [\[8\]](#cite-id-l44ajs7k1in) [\[1\]](#cite-id-u07le2dlwo9)[\[2\]](#cite-id-7q2q9w1n7tk)  
$$widget0 [YOUTUBE@VID](AbgRB3arCpY)$$  
  
# History  
  
Founded in 2017, Alameda Research was a financial services company that focuses on providing liquidity and managing digital assets. The company was originally founded in Hong Kong but has expanded to the United States and Japan. Alameda Research was founded by [Sam Bankman-Fried](https://iq.wiki/wiki/sam-bankman-fried), who had previously worked at Jane Street, a global proprietary trading firm.[\[4\]](#cite-id-cbwps5sqmoc)  
  
## Bankruptcy  
  
In November 2022, Bankman-Fried announced that [Alameda Research](https://iq.wiki/wiki/alameda-research) and [FTX](https://iq.wiki/wiki/ftx) had filed for Chapter 11 bankruptcy along with other companies related to FTX. The founder Sam Bankman-Fried resigned from his position as CEO, with John J. Ray III succeeding him.[\[9\]](#cite-id-5lbap8old9l) Websites for Alameda Research and the company’s venture capital arm, FTX Ventures, were offline and made private, while both FTX’s main site and FTX US’ website remain accessible.[\[10\]](#cite-id-9uy3ujwhbom)  
  
According to a recent report by The Wall Street Journal, the reason for the crisis was that the exchange provided up to $10 billion in loans using money that customers had deposited. Since FTX had $16 billion in customer assets, the exchange had lent more than half of its customer funds. Aside from FTX, Alameda had to take out additional loans from other financial firms too, which totals $1.5 billion, the report said, citing people familiar with the matter.[\[11\]](#cite-id-nd7wjqkraeo)

Alameda Research was a quantitative cryptocurrency trading firm and liquidity provider.

Alameda Research

**Arbitrum** is a suite of [Ethereum](https://iq.wiki/wiki/ethereum) scaling solutions that enable high-throughput, low-cost [smart contracts](https://iq.wiki/wiki/smart-contract) while remaining fast and secure. The platform is designed to allow developers to easily run unmodified Ethereum Virtual Machine (EVM) contracts and [Ethereum](https://iq.wiki/wiki/ethereum) transactions on a second layer, while still benefiting from Ethereum's excellent layer 1 security.[\[1\]](#cite-id-ot2ldz7hzw9)[\[2\]](#cite-id-561s71k316i)  
In January 2019, Arbitrum raised $3.8 million through seed funding and also $20 million series A. In 2021, they raised $120 million through a Series B, which was led by the Lightspeed Venture Partners fund.[\[3\]](#cite-id-l3mssmdu1t)  
  
In May 2021, Off-chain Labs launched the mainnet beta of Arbitrum One, but only to developers, with over 300+ dApps deployed & over $1 billion in TVL.  
  
In June 2022, Arbitrum Odyssey, an 8-week program, was launched to popularize and attract users to the L2-network Arbitrum One. It is divided into eight stages, each of which is dedicated to a different aspect of the Arbitrum ecosystem.[\[7\]](#cite-id-kpwgvy5opzr)  
$$widget0 [YOUTUBE@VID](jQGd_KMdFfs)$$  
  
# Overview  
  
Arbitrum is a trustless layer 2 protocol for cheap, fast transactions with full Ethereum smart contract functionality. It utilizes the transaction roll-up technique to record batches of submitted transactions on the Ethereum main chain and execute them on low-cost, scalable layer 2 sidechains while leveraging Ethereum to ensure correct results. This process eradicates much of Ethereum's current computational and storage burden while enabling new classes of powerful layer 2-based [DApps](https://iq.wiki/wiki/decentralized-application).  
  
Arbitrum's goal is to provide developers with an easy-to-use platform for launching highly efficient and scalable Ethereum-compatible smart contracts. In the Arbitrum network, ETH is used to pay transaction fees. Transferring to the Arbitrum network is typically 90–95% less expensive than transferring to Ethereum, and there is significant room for further commission reduction.[\[9\]](#cite-id-zhmw0lo0lqg)  
  
Arbitrum also has its Virtual Machine, the platform's custom virtual machine (AVM). The Arbitrum Virtual Machine (AVM) is the execution area for Arbitrum [smart contracts](https://iq.wiki/wiki/smart-contract) and is built on top of EthBridge, a smart contract collection that interacts with the Arbitrum chain. Smart contracts compatible with [Ethereum](https://iq.wiki/wiki/ethereum) are automatically translated to run on the AVM.[\[8\]](#cite-id-uye83rz5wus)  
  
# $$widget0 [YOUTUBE@VID](Bv2oKuOg86g)$$  
  
# How it works  
  
For any users to interact with an Arbitrum chain, a set of Nodes will forward their transactions to the Arbitrum Sequencer (a specially designated Arbitrum full node that, under normal conditions, is responsible for submitting users’ transactions onto L2), which will report transaction results just as an Ethereum node would but in a much faster way. The transactions are then recorded on the [Ethereum](https://iq.wiki/wiki/ethereum) [blockchain](https://iq.wiki/wiki/blockchain), ensuring that all underlying data is accessible to users. On Ethereum, once a transaction has reached finality, it is considered final and cannot be replaced or re-reordered. The transaction's outcome is complete at this point.  
  
Following the posting of transaction data to the Ethereum [blockchain](https://iq.wiki/wiki/blockchain), transaction execution is moved off-chain and performed by Arbitrum validators. Arbitrum validators recover their off-chain processing results in the form of an assertion (sometimes called a rollup block). The assertion is optimistically posted on the Ethereum chain, proof is only attached if the assertion is challenged. Validators place a bet that they will forfeit if they are caught trying to cheat. This ensures that validators have an incentive not to engage in dishonest behavior.  
  
Whenever an assertion is posted, a challenge window opens in which any validator can challenge it. Other validators verify the assertion and prove fraud if it is incorrect. Validators who successfully prove fraud will be rewarded handsomely. If the challenge window expires without a successful challenge the correct assertion is confirmed and accepted by Ethereum. This makes Arbitrum reliable in preventing fraud as long as anyone validating the chain is honest.[\[12\]](#cite-id-au5dw32gzjd)[\[13\]](#cite-id-344zkpd38ig)$$widget0 [YOUTUBE@VID](YBXFpgQQ754)$$  
  
# Features  
  
### High EVM Compatibility  
  
Being compatible with [Ethereum](https://iq.wiki/wiki/ethereum), Arbitrum can run unmodified EVM contracts and unmodified Ethereum transactions. This allows Ethereum DeFi developers to integrate their [decentralized applications (dapps)](https://iq.wiki/wiki/decentralized-application) with Arbitrum without having to make any modifications.[\[10\]](#cite-id-9fwn8ulcnq)  
  
### Low fees  
  
Arbitrum is designed and engineered to minimize the system's L1 gas footprint, lowering each transaction cost. Arbitrum's efficient roll-up technology allows it to reduce fees to a fraction of what they are on Ethereum while still providing sufficient incentives for validators.[\[5\]](#cite-id-k6x76pisj2)  
  
### Scalability  
  
Artbitrum scales through Ethereum by moving contracts computation and storage off of the main Ethereum chain, allowing much higher throughput.  
  
### Trustless Security  
  
Arbitrum has its security rooted in Ethereum, with permissionless validation, the Arbitrum protocol is trustless. The safety of the chain relies on there being at least 1 honest validator.  
  
# Product  
  
There are currently two chains live on Arbitrum mainnet:  
  
### Arbitrum One  
  
Arbitrum One is an optimistic rollup L2 scaling solution for Ethereum, offering fast & cheap transactions tailored for Defi and NFTs.   
Users can now use Alchemy, Infura, QuickNode, Moralis, Ankr, BlockVision, and GetBlock to interact with the Arbitrum One.   
  
### Arbitrum Nova  
  
Arbitrum Nova utilizes the Anytrust scaling model offering even lower transactions tailored more for gaming/social applications. Nova is an EVM-compatible chain built on Arbitrum AnyTrust technology that is optimized for ultra-low-cost transactions while providing strong security guarantees. Nova was made available to the public in August 2022. Nova is ideal for gaming projects, social layers, or any application that requires high throughput while maintaining low transaction costs.  
  
Nova is powered by the most trusted organizations across web2 and web3, including Offchain Labs, Reddit, Google Cloud, Consensys, and [FTX](https://iq.wiki/wiki/ftx).[\[15\]](#cite-id-esql9iph13)[\[16\]](#cite-id-0f73ap16nkvp)  
$$widget0 [YOUTUBE@VID](DGpXMEgiz4g)$$  
  
# Tech  
  
Arbitrium uses the Optimistic Rollups concept, which allows developers to quickly launch smart contracts and decentralized Ethereum applications with lower transfer fees and increased bandwidth while making no changes. An optimistic rollup is a specific technique for rolling up transactions. To speed things up, optimistic rollups assume that the transactions contained within the rollup are valid. They are *optimistic* in the sense that when they post the updated state to Ethereum they do this without posting any proof at all.[\[14\]](#cite-id-kz078pg9d0j)  
  
Arbitrum's optimistic rollups are settled on a private sidechain. Arbitrum gathers transactions in batches, settles them on its sidechain, and then feeds the transaction data back to the Ethereum blockchain ledger.  
  
The team built Arbitrum as an Optimistic Rollup (OR) because they believe that OR is the best way to meet users’ realistic needs for a secure, trustless, EVM-compatible L2.  
$$widget0 [YOUTUBE@VID](7pWxCklcNsU)$$  
  
# AnyTrust  
  
AnyTrust is a variant of Arbitrum Nitro technology that lowers costs by accepting a mild trust assumption.  
  
Arbitrum AnyTrust introduces a trust assumption in exchange for lower fees, data availability is managed by a Data Availability Committee (DAC), a fixed, permissioned set of entities which includes :  
  
* Consensys  
* FTX  
* Google Cloud  
* Offchain Labs  
* P2P  
* Quicknode  
* Reddit  
  
  
# Partners  
  
* [Chainlink Labs](https://iq.wiki/wiki/chainlink)  
* [Dopex](https://iq.wiki/wiki/dopex)  
* GMX  
* Hop Protocol  
* Lido Finance  
* [Livepeer](https://iq.wiki/wiki/livepeer)  
* Quick Node  
* Synapse Protocol  
* Treasure DAO  
* [Uniswap Foundation](https://iq.wiki/wiki/uniswap)  
* Unlock Protocol  
* Vesta Finance  
* Coinbase Ventures  
* Pantera  
* Compound  
* Blocknation.  
  
# Team  
  
Arbitrum is built by Off-chain Labs, a world-class team of researchers, engineers, and Ethereum enthusiasts. The team includes a global community of developers, academics, and operators, with deep experience in cryptography, decentralized systems, and game theory.![1_j10QD9Og9JOC2Ps3HXU66A.png](https://ipfs.everipedia.org/ipfs/QmZQeCoVyunamTqEunJ9sDBVe1pxr1TSLH1FLY3EeSRsSx)  
  
* Ed Felten - Co-Founder + Chief Scientist  
* Steven Goldfeder - Co-Founder + CEO  
* Harry Kalodner - Co-Founder + CTO  
* Lee Bousfield - Senior Software Engineer  
* Rachel Franks - Senior Software Engineer  
* Daniel Goldman - Senior Software Engineer  
* Fred Lacs - Senior Software Engineer  
* Mahsa Moosavi - Software Engineer  
* Daniel Silverberg - Operations Manager  
* A.J. Warner - Director of Partnerships and Strategy  
* Hunter Brea - Community Manager  
* Nina Rong - Community Manager China  
* Peter Haymond - Partnerships Manager  
* Size Chad - NFTs & Gaming[\[6\]](#cite-id-a61zwdmh18w)

Arbitrum is a layer 2 solution that aims to scale Ethereum while lowering the cost of the chain.

Arbitrum

**BNB Chain** is a [blockchain](https://iq.wiki/wiki/blockchain) created by [Binance](https://iq.wiki/wiki/binance) which is made up of BNB Smart Chain, which is designed for developers looking to build [decentralized applications (apps)](https://iq.wiki/wiki/decentralized-application-dapp), and BNB Chain Governance a blockchain that is designed for [BNB](https://iq.wiki/wiki/binance-coin) governance and voting. It also introduces an all-new staking mechanism for [BNB](https://iq.wiki/wiki/binance-coin), one of the world’s top [cryptocurrencies](https://iq.wiki/wiki/cryptocurrency) by market capitalization. [\[1\]](#cite-id-1l5vn7twp4w)[\[2\]](#cite-id-vrcgosd51r9)[\[3\]](#cite-id-g5k0snykyqa)  
$$widget0 [YOUTUBE@VID](bTbsuE60naI)$$  
  
# History  
  
The history of BNB Chain started back in April 2019 when [Binance](https://iq.wiki/wiki/binance) launched what was then known as Binance Chain. At that point, the BNB utility token, which was originally designed to lower the trading fees users pay on Binance, switched over from the Ethereum network, where it was launched in 2017, and became the token of Binance Chain.[\[39\]](#cite-id-ootul7yf0y) Binance Chain used a delegated proof-of-stake consensus.[\[40\]](#cite-id-ks8vrv0zo5)  
  
In September 2020, Binance launched the mainnet of its Smart Chain, a smart contract-enabled [blockchain](https://iq.wiki/wiki/blockchain) running in parallel to Binance Chain. Unlike Binance Chain, BSC boasted smart contract functionality and compatibility with the Ethereum Virtual Machine (EVM). The design goal was to leave the high throughput of the Binance Chain intact while introducing [smart contracts](https://iq.wiki/wiki/smart-contract) into its ecosystem. This also allowed Ethereum dapps to easily move on to the Binance Smart Chain.[\[4\]](#cite-id-w45qa7yuaud)[\[5\]](#cite-id-xtsdcs9m0v8) Binance Smart Chain has low transaction fees “as low as 1 cent” and a 3-second block time. The blockchain uses a Dpos (Delegated-Proof-Of-Stake) variant named Proof-of-Staked-Authority.[\[6\]](#cite-id-rcbeyzir5bm)  
  
In October 2020, Binance CEO [Changpeng Zhao](https://iq.wiki/wiki/changpeng-zhao) announced that Binance Smart Chain had processed 21 percent of Ethereum's transaction volume at a much lower cost, 35 times cheaper. He wrote on Twitter:  
  
> Yesterday, #BinanceSmartChain handled roughly 21% of transactions compared #ETH, while only charging 0.6% of the fees, making #BSC about 35x cheaper. Maybe this is bad for #BNB price (and nodes, for now), lol. But it’s good for users & developers.[\[11\]](#cite-id-kniqbqs5s4l)  
  
On October 12, 2020, the [CEO of Binance](https://iq.wiki/wiki/changpeng-zhao) reported on Twitter that the number of active addresses on BSC increased 50 times since the launch of the network:  
  
> Looks like #BSC took 3x less time to reach 120k addresses/users than @binance CEX back in the day.  
  
On February 15, 2022, Binance Chain and Binance Smart Chain (BSC) became [BNB](https://iq.wiki/wiki/binance-coin) Chain.[\[36\]](#cite-id-qgvrouc3lig)  
$$widget0 [YOUTUBE@VID](iJDoc0kvXLc)$$  
  
## Binance Bridge Hack  
  
On October 6, 2022, the Binance bridge was hacked and around $500 million of funds were stolen.[\[37\]](#cite-id-dimhbv4pejw) The Binance co-founder and CEO [Changpeng Zhao](https://iq.wiki/wiki/changpeng-zhao) announced that the hack happened on a cross-chain bridge where users transfer digital assets from one blockchain to another.[\[38\]](#cite-id-z2k2w8io9h)  
  
In October 2022, BNB Smart Chain deployed an upgraded version of its network, resolving several cross-chain issues following the multi-million dollar bridge hack. According to [Binance](https://iq.wiki/wiki/binance), the upgrade had no effect on the trade of Binance Smart Chain tokens at the exchange but required deposits and withdrawals of those tokens to be temporarily paused. The patch release, Moran hard fork, was described as a temporary for re-enabling cross-chain functionality between the BNB Beacon Chain and Binance Smart Chain. [\[37\]](#cite-id-dimhbv4pejw)  
$$widget0 [YOUTUBE@VID](w3Q-_nQGo58)$$  
  
## BNB Chain  
  
On February 15, 2022, Binance Chain and Binance Smart Chain (BSC) became [BNB](https://iq.wiki/wiki/binance-coin) Chain. A transition that highlights BSC’s connection with the BNB token and BNB ecosystem. BNB, which stands for “Build and Build” (formerly called Binance Coin), is the [blockchain](https://iq.wiki/wiki/blockchain) gas token that “fuels” transactions on BNB Chain.  
BNB Chain is comprised of:  
  
* BNB Beacon Chain (previously Binance Chain) - BNB Chain Governance (staking, voting)  
* BNB Smart Chain (BSC) (previously Binance Smart Chain) - EVM compatible, consensus layers, and with hubs to multi-chains.[\[35\]](#cite-id-hr0vml0nlh)  
  
According to [Binance](https://iq.wiki/wiki/binance), the name change also comes with more advancements to benefit users, projects, and developers connected to the BNB Chain community. The BNB Chain will embrace large-scale applications, including GameFi, SocialFi, and the Metaverse. In particular:  
  
* Scaling from one chain to multi-chain  
* Boosting the throughput of BSC  
* Introducing on-chain governance mechanisms  
* Improving scaling solutions and an expansion of the validator set of BSC from 21 to 41 (with 20 validators functioning as candidate block producers)[\[36\]](#cite-id-qgvrouc3lig)  
  
$$widget0 [YOUTUBE@VID](TsraNMHENIE)$$  
  
# Features  
  
***  
  
## Proof of Staked Authority  
  
The Proof-of-Authority protocol is most criticized for not being fully decentralized, as the validators, i.e. the nodes that take turns to produce blocks, have all the authority and risk corruption and security attacks. Other blockchains, such as [EOS](https://iq.wiki/wiki/eos) and [Cosmos](https://iq.wiki/wiki/cosmos), introduce different types of Dpos (Delegated-Proof-Of-Stake) to allow the token holders to vote and elect the validator set. This increases decentralization and favors community governance.[\[12\]](#cite-id-qu6okfzposk)  
  
BSC combines Dpos (Delegated-Proof-Of-Stake) and Proof-of-authority for consensus, so that:  
  
1. Blocks are produced by a limited set of validators.  
2. Validators take turns to produce blocks in a PoA manner, similar to Ethereum’s Clique consensus engine.  
3. Validator set is elected in and out based on staking-based governance.[\[13\]](#cite-id-6piq1femsyi)  
  
## Token Economy  
  
Binance Chain and Binance Smart Chain share the same token universe for [Binance Coin (BNB)](https://iq.wiki/wiki/binance-coin) and BEP-2 tokens. This means:  
  
1. Tokens can circulate on both networks, and flow between them bi-directionally via a cross-chain communication mechanism.  
2. The total circulation of the same token should be managed across the two networks, i.e. the total effective supply of a token should be the sum of the token’s total effective supply on both BSC and BC.  
3. The tokens can be initially created on BSC in a similar format as ERC20, or on BC as a BEP2, then created on the other. There are native ways on both networks to link the two tokens and secure the total supply of the token.[\[14\]](#cite-id-hbbgi6r31wf)  
  
### Native Token (BNB)  
  
Binance Coin runs on BNB Chain in the same way as ETH runs on [Ethereum](https://iq.wiki/wiki/ethereum) so that it remains a “native token” for both BSC and BC. This means, in addition to BNB being used to pay most of the fees on Binance Chain and [Binance DEX](https://iq.wiki/wiki/binance-dex), [BNB](https://iq.wiki/wiki/binance-coin) will be also used to:  
  
1. Pay “gas“ to deploy Smart Contract on BSC.  
2. Stake on selected BSC validators, and get corresponding rewards.  
3. Perform cross-chain operations, such as transfer token assets across BC and BSC.[\[16\]](#cite-id-xv5rrju7rhh)  
  
### Other Supported Tokens (BEP2, BEP8, ERC-20)  
  
BEP2 and the upcoming BEP8 standards are both BC and BSC-supported tokens. [ERC-20](https://iq.wiki/wiki/erc-20) tokens, or BEP2E tokens, as they are called in the network, are supported on the BNB Chain. There are ways to further "enhance" ERC-20 tokens on the platform just by adding more identifiers on an asset, such as token denomination, owner address, and decimal precision definition, among others. This process is called “token binding.”[\[32\]](#cite-id-2x6tusejy9p)  
  
### Seed Fund  
  
Certain amounts of BNB will be burnt on Binance Chain and minted on Binance Smart Chain during its genesis stage. This amount is called “Seed Fund” to circulate on BSC after the first block, which will be dispatched to the initial BC-to-BSC Relayer and initial validator set introduced at genesis. These BNBs are used to pay transaction fees in the early stage to transfer more BNB from BC onto BSC via the cross-chain mechanism.[\[15\]](#cite-id-vjocsihj3d)  
  
## Staking and Governance  
  
The following list is the core ideas of staking and governance while using the Proof of Staked Authority protocol:  
  
1. Token holders, including the validators, can put their tokens “bonded” into the stake. Token holders can delegate their tokens to any validator or validator candidate, to expect it can become an actual validator, and later they can choose a different validator or candidate to re-delegate their tokens.  
2. All validator candidates will be ranked by the number of bonded tokens on them, and the top ones will become the real validators.  
3. Validators can share (part of) their blocking reward with their delegators.  
4. Validators can suffer from “Slashing”, a punishment for their bad behaviors, such as double sign and/or instability. Such loss will be shared by their delegators as well.  
5. There is an “unbonding period” for validators and delegators so that the system makes sure the tokens remain bonded when bad behaviors are caught, the responsible will get slashed during this period.[\[17\]](#cite-id-amztb03214n)  
  
## Cross-chain Compatibility  
  
Binance Smart Chain was envisioned as an independent but complementary system to the existing Binance Chain. Dual-chain architecture is used, with the idea being that users can seamlessly transfer assets from one blockchain to another. BEP-2 and BEP-8 tokens from Binance Chain can be swapped for BEP-20 tokens, the new standard introduced for Binance Smart Chain. To move tokens from one chain to another (i.e., BEP-2 to BEP-20 or vice versa), the simplest method is to use the Binance Chain Wallet, available on Google Chrome and Firefox.[\[18\]](#cite-id-ub8byw071a)  
  
### Yield Farming Projects  
  
Binance Smart Chain has grown steadily to become a dominant chain for yield farming. It has several advantages over [Ethereum](https://iq.wiki/wiki/ethereum) (ETH), such as lower fees and faster confirmation times.[\[19\]](#cite-id-x6x4c3lwmus) Yield farms on BSC can be accessed via existing Ethereum infrastructure like MetaMask, making the user journey easier to onboard especially for crypto users. Via yield farming, BSC is establishing a strong foothold in the [decentralized finance (DeFi)](https://iq.wiki/wiki/defi) industry on the [blockchain](https://iq.wiki/wiki/blockchain).  
  
# Binance Fund Grants  
  
In October 2020, Binance announced they would fund six projects building on their Smart Chain. More than 180 projects applied for grants since its $100 million accelerator fund was announced in September 2020.[\[20\]](#cite-id-i2fkwi8dxgs) [\[22\]](#cite-id-xs3bgh41rq)  
  
In an October 14 statement, Binance stated that blockchain projects [Anyswap](https://iq.wiki/wiki/anyswap), Arkane Network, [BakerySwap](https://iq.wiki/wiki/bakeryswap), Bitquery, [PancakeSwap](https://iq.wiki/wiki/pancakeswap), and Proxima will receive $350,000 in grants through the firm’s $100 million fund. The firm chose the six projects by examining the teams, products, and their contribution to the blockchain ecosystem. Binance CEO [Changpeng Zhao](https://iq.wiki/wiki/changpeng-zhao) said the Accelerator Fund was designed to support the development of high-quality [DeFi (Decentralized Finance)](https://iq.wiki/wiki/defi) projects that contribute to building the industry’s infrastructure.[\[21\]](#cite-id-8qgoivny9mq) [\[23\]](#cite-id-e2pp7lks0nw)  
  
On October 29, 2020, Binance announced that they would be funding 5 new blockchain projects on Binance Smart Chain with their $100 million accelerator fund. The projects include Bounce, DeFiStation, [Gitcoin](https://iq.wiki/wiki/gitcoin), JustLiquidity, and PARSIQ.[\[24\]](#cite-id-07hc1w7qz0gl)  
  
# Partnerships  
  
### Band Protocol x Binance Smart Chain  
  
In August 2020, Binance Smart Chain partnered with [Band Protocol](https://iq.wiki/wiki/band-protocol). The integration enables developers to create custom decentralized oracles that aren’t limited to scalability issues, predetermined update parameters, or specific data sets. Developers have complete access to Band Protocol’s tools to reliably connect smart contracts to any external data source or API to leverage real-world data within their decentralized applications.[\[25\]](#cite-id-eku8z4z4gn7)  
  
### Cartesi x Binance Smart Chain  
  
In September 2020, BSC partnered with [Cartesi](https://iq.wiki/wiki/cartesi) (CTSI) to unlock the next generation of decentralized applications. This partnership enabled advanced smart contract capabilities and massive computation for Cartesi DApps atop Binance Smart Chain, allowing DApp developers to jumpstart the next generation of decentralized games and DeFi products. Erick de Moura, CEO of Cartesi, said:  
  
> Developers will now be able to build computationally intensive DApp logic with familiar Linux tools, while at the same time taking advantage of the low fees and high throughput capabilities that Binance Smart Chain provides."[\[26\]](#cite-id-s2d9lz0ej1)  
  
### CertiK x Binance Smart Chain  
  
In September 2020, BSC also partnered with [CertiK](https://iq.wiki/wiki/certik). According to the terms of the partnership, an interoperability protocol will be created between BSC and the security-oriented CertiK Chain to grow the DeFi tools and services ecosystem and protect users against bad actors. CertiK, the leading blockchain auditing firm trusted by industry leaders including Aave, Kava, and Ampleforth, will provide BSC with best-in-class cybersecurity services such as customized security audits and penetration testing, as well as decentralized security products such as CertiK Security Oracle scores and CertiKShield reimbursement pools.[\[27\]](#cite-id-toyzmx0d45r)  
  
### Bondly x Binance Smart Chain  
  
On December 21, 2020, Binance Smart Chain teamed up with [Bondly](https://iq.wiki/wiki/bondly-finance), an industry leader in the DeFi and NFT space. Bondly has been a pioneer in the digital assets and collectibles field, with their atomic, interoperable swap architecture and their signature product, BSwap, which allows users to perform cryptographically secured transactions of crypto-assets in an over-the-counter (OTC) manner. Recently, Bondly launched the Bondly Collectible Card Game (BCCG). BCCG is a fully digital, [NFT](https://iq.wiki/wiki/non-fungible-token-nft)-based, collectible card game that adds immense utility, educates about the Bondly product family, and incentivizes gamers to participate in the Bondly ecosystem.[\[33\]](#cite-id-0onlfnhavdq)  
  
Bondly will be bringing the BCCG to Binance Smart Chain, driving the adoption of the NFT world and BSC’s NFT ecosystem. This partnership will allow BSC to connect with their community deeper through the development of the BSC NFT Ecosystem. Bondly will work with BSC to launch exclusive Christmas Edition NFT cards on BSC with unique utilities.[\[33\]](#cite-id-0onlfnhavdq)  
  
### Animoca Brands x Binance Smart Chain  
  
In December 2021, BSC partnered with [Animoca Brands](https://iq.wiki/wiki/animoca), operator and investor of several NFT-based games, to launch a joint $200 million gamefi (financialization of gaming) incubation program. The two institutions invested $100 million each to fund and ease the development of new gaming experiences on top of the Binance Smart Chain.[\[34\]](#cite-id-h3hm2iceb9e)  
Gwendolyn Regina, Investment Director at Binance Smart Chain said:  
  
> Animoca Brands’ experience in building and operating projects like The Sandbox, a metaverse-based gaming experience, could help these newcomers to establish a foothold in the now crowded blockchain gaming market,  
  
## List of Partners  
  
### Blockchain Infrastructure and Tools  
  
* [Chainlink](https://iq.wiki/wiki/chainlink)  
* [Band Protocol](https://iq.wiki/wiki/band-protocol)  
* Trust Wallet  
* [Ankr](https://iq.wiki/wiki/ankr)  
* BSCScan  
* Bitquery  
* MathWallet  
* MyWish  
* [CertiK](https://iq.wiki/wiki/certik)  
* Torus[\[31\]](#cite-id-sc8lis023z)  
  
### DeFi  
  
* Swipe  
* [Aave](https://iq.wiki/wiki/aave)  
* [1inch.exchange](https://iq.wiki/wiki/1inch)  
* [WazirX](https://iq.wiki/wiki/wazirx)  
* [DODO](https://iq.wiki/wiki/dodo)  
* [dForce](https://iq.wiki/wiki/dforce)  
* [Bounce.finance](https://iq.wiki/wiki/bounce-finance)  
* Spartan Protocol  
* MCDEX  
* [Cream Finance](https://iq.wiki/wiki/cream-finance)  
* [ForTube](https://iq.wiki/wiki/fortube)  
* DeBank[\[30\]](#cite-id-2g8ydhuc063)  
  
### Cross-Chain Liquidity  
  
* [RenVM](https://iq.wiki/wiki/renvm)  
* [pNetwork](https://iq.wiki/wiki/pnetwork)  
* [ThorChain](https://iq.wiki/wiki/thorchain)  
* [Ferrum Network](https://iq.wiki/wiki/ferrum-network)  
* [Alpha Finance](https://iq.wiki/wiki/alpha-finance)[\[28\]](#cite-id-4mlq64bxl2s)  
  
### Others  
  
* Dapp.Review  
* [Ontology](https://iq.wiki/wiki/ontology)  
* Travala.com  
* Republic.co  
* Clutch  
* BCA  
* Ignite[\[29\]](#cite-id-txod3n8jyc)

BNB Chain is a blockchain created by Binance which is made up of BNB Smart Chain, which is designed for developers looking to build decentralized applications (...

BNB Chain

**Rocket Pool** is a decentralized [Ethereum](https://iq.wiki/wiki/ethereum) staking platform.[\[1\]](#cite-id-aa2kv8rq6wh)[\[4\]](#cite-id-rtgtvzgjats)[\[5\]](#cite-id-747j0pol8nx) As of October 2022, the protocol has more than 292,736 [Ether](https://iq.wiki/wiki/ethereum) staked with around 1,659 node operators and a [Total Value Locked](https://iq.wiki/wiki/tvl) (TVL) of $650.11 million.[\[8\]](#cite-id-uh9pfg3t3zl)[\[9\]](#cite-id-89znd0txl5n)  
  
# $$widget0 [YOUTUBE@VID](dD9G2A4JS2Q)$$Overview  
  
Rocket Pool offers two methods of staking Ethereum staking and running a node which requires a minimum of 16 ETH half the amount needed to run a node or just staking which requires a minimum of only 0.01 ETH. [\[8\]](#cite-id-uh9pfg3t3zl) Rocket Pool's smart contracts have been audited by Sigma Prime, Consensys Diligence, Trail of Bits, and Immunefi Bug Bounty. [\[21\]](#cite-id-66roujlsdov)  
  
## Staking + Running a Node  
  
Ethereum holders can stake Ethereum and run a node with Rocket Pool. Stakers earn both ETH rewards from staking and variable RPL token rewards for providing RPL collateral. The solution is permissionless and allows stakers to run a node by staking 16 Ethereum which is half the minimum needed to solo stake Ethereum. [\[20\]](#cite-id-akbk8mh4v1g)  
  
## Staking  
  
Rocket Pool also allows Ethereum holders to stake with as little as 0.01 ETH. Ethereum holders can deposit as little as 0.01 ETH and receive the rETH liquid staking token. rETH accrues staking rewards over time. The solution is decentralized as a decentralized network of node operators earns rewards for rETH holders. The solution is also non-custodial since node operators do not handle funds. Any penalties incurred by node operators are taken from their earnings rather than rETH holders. [\[20\]](#cite-id-akbk8mh4v1g)  
  
## RPL Token  
  
RPL is the native token of Rocket Pool with a total supply of 18,000,000. It ensures that the system remains trustless, and decentralized and that the community can govern the way it functions. As a form of insurance, RPL can also be staked on a Rocket Pool node.  
  
Since the operators stake RPL, they also receive an additional reward of the same token. This is created by the administered inflation. Operators can stake as much as 150% of the staked ETH’s value. New RPL tokens are minted every 28 days; a period that is called “checkpoint.” RPL is distributed to node operators in exchange for operating on the network. According to Rocket Pool, it purposely manages a 5% inflation rate of the RPL token.[\[13\]](#cite-id-ialaw7crrms)  
  
In November 2021, a new Rocket Pool protocol token has been released and the old Rocket Pool token could be migrated using the Rocket Pool staking website.[\[19\]](#cite-id-l261cei3d2)  
  
### Token Allocation  
  
| S/N | Distribution | (%) | Amount |  
| --- | ------------ | --- | ------ |  
| 1. | Founders & Project | 15% | 2,700,000 |  
| 2. | Investors | 54% | 9,720,000 |  
| 3. | Premined Rewards & Airdrops | 31% | 5,580,000 |  
  
## rETH  
  
Rocket Pool ETH (rETH) is the protocol’s liquid staking token. The rETH token represents an amount of ETH that is being staked and earning rewards within [Ethereum](https://iq.wiki/wiki/ethereum) [Proof-of-Stake](https://iq.wiki/wiki/proof-of-stake). As Rocket Pool node operators stake, the resulting rewards increase the value of rETH relative to ETH.[\[19\]](#cite-id-l261cei3d2)  
$$widget0 [YOUTUBE@VID](h1alBzsCD2s)$$  
  
## Launch  
  
Rocket Pool first launched on Ethereum mainnet in November 2021 when the Beacon Chain was a separate chain that ran in parallel to the main Ethereum Proof of Work chain. Later, Rocket Pool became an [Ethereum](https://iq.wiki/wiki/ethereum) [Proof-of-stake](https://iq.wiki/wiki/proof-of-stake) (PoS) infrastructure service compatible with staking in [Ethereum](https://iq.wiki/wiki/ethereum) after The Merge. The team originally had the release planned for October 6th but decided to delay that due to the discovery of an ETH2 staking issue. This issue was discovered through their bug bounty program and it would have affected not only Rocket Pool if it launched then, but it also affected several live staking platforms as well.[\[14\]](#cite-id-lzdl8lnojn) In its first two days of operations, Rocket Pool had registered 237 node operators across 42 global locations, with 1,088 ETH staked.[\[7\]](#cite-id-2zlb4br2jlg)  
  
## Mainnet Rollout  
  
The Rocket Pool mainnet launch was a staged rollout gradually increasing the protocol’s total value staked. Rollout occurred in 4 short to medium-length phases. Each stage limited the number of minipools and the size of the rETH deposit pool. Once the minipool limit was reached new node operators were not able to deposit until the next phase. Once the rETH deposit pool reached its limit, stakers were not able to swap ETH for rETH until the next phase.  
$$widget0 [YOUTUBE@VID](CM1decziXkQ)$$  
  
## Redstone  
  
Redstone is the name of the Rocket Pool release that includes The Merge compatibility. The Redstone smart node and smart contract release happened before the [Ethereum](https://iq.wiki/wiki/ethereum) Merge.[\[17\]](#cite-id-hxduce1oqcr)  
  
### Priority Fee Distributor  
  
After The Merge, smart node operators and their minipool validators became responsible for creating blocks, and in doing so, they began receiving priority fees (also known as tips) which are attached to each transaction. This new distributor made sure these fees are split between the node operator and rETH liquid staking users, just like Beacon Chain rewards previously.[\[18\]](#cite-id-sxs7jrn5zut)  
  
### Rewards System  
  
Node operators in the Rocket Pool protocol were previously required to stake RPL as an insurance promise to the protocol. If they incurred serious penalties, then their RPL stake was penalized. Node operators who staked this RPL were also rewarded every 28 days from the protocol for providing this insurance. With the Merge, nodes have to make an on-chain claim every 28 days and the gas fees depend on how busy the Ethereum network is at the moment the claim is made.[\[18\]](#cite-id-sxs7jrn5zut)  
  
### Smoothing Pool  
  
The new Smoothing Pool is an opt-in feature that collectively pools the priority fees of every member opted into it. This is a way to effectively eliminate the randomness associated with block proposals on the Beacon Chain.[\[18\]](#cite-id-sxs7jrn5zut)  
$$widget0 [YOUTUBE@VID](r4s5Tk8Uwp8)$$  
  
# Protocol DAO (PDAO)  
  
The Rocket Pool Protocol DAO is responsible for a host of settings across the protocol and is run by RPL governance. Protocol DAO can raise and support governance proposals, figure out how to spend the PDAO treasury, and potentially change certain protocol settings. For phase 0, the PDAO will have no direct on-chain power. This is to limit the governance power until it is stable enough to take control. The Core Team will affect this power at the behest of the PDAO.[\[15\]](#cite-id-k06txva0cr)[\[16\]](#cite-id-ndgk2voj34)  
  
# Oracle DAO (ODAO)  
  
The Rocket Pool protocol has two types of nodes, regular bonded nodes and oracle nodes. These node operators make up Oracle DAO. The Oracle DAO is a decentralized network of special nodes in the protocol that operates in a true on-chain DAO made just for Rocket Pool. Members in this DAO can create proposals to invite new members, leave the DAO, earn RPL from the protocol’s tokenomics, and much more. These nodes play a crucial role in relaying information from the beacon chain on ETH2 to Rocket Pool's smart contracts on ETH1.[\[12\]](#cite-id-pjmyca95po)  
  
## Launch Members  
  
* Lighthouse  
* Nimbus  
* Prysmatic Labs  
* [Etherscan](https://iq.wiki/wiki/etherscan) & Beaconscan  
* Beaconcha.in  
* ConsenSys Codefi  
* Blockdaemon  
* Staked  
* Blockchain Capital  
* [Bankless](https://iq.wiki/wiki/bankless-dao)  
* Ethstakers  
* Fire Eyes  
* CryptoManufaktur  
* Rocket Pool[\[14\]](#cite-id-lzdl8lnojn)  
  
# Team  
  
* David Rugendyke - Founder & CTO  
* Darren Langley - General Manager  
* Kane Wallmann - Senior Solidity Engineer  
* Nick Doherty - Senior Blockchain Engineer  
* Joe Clapis - Senior Blockchain Engineer  
* Maverick (Nick Ashley) - Marketing & Community Manager  
  
$$widget0 [YOUTUBE@VID](oxlQX0HyAR0)$$

Rocket Pool is a decentralized Ethereum staking platform.

Rocket Pool

Binance Labs is a social impact fund established by [Binance](https://iq.wiki/wiki/binance). It is an initiative to invest, incubate, and resource [blockchain](https://iq.wiki/wiki/blockchain) and [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) projects, entrepreneurs, and communities.[\[1\]](#cite-id-filnyg638nr)  
$$widget0 [YOUTUBE@VID](lDODCVmwO7w)$$  
  
# Overview  
  
Binance Labs run the Incubation Program, a chain-agnostic program that aims to empower innovative projects to shape the future of Web3. As Binance’s venture capital and incubation arm, Binance Labs created the program to meet founder needs, using extensive resources across the entire Binance ecosystem and crypto industry. The Binance Labs Incubation Program is an 8-week curriculum designed for top-tier founders.[\[4\]](#cite-id-ppvwzi9gfc)  
  
Their investment focus includes:  
  
* Public Blockchains  
* [Decentralized Exchanges](https://iq.wiki/wiki/decentralized-exchange) (DEX)  
* Wallets & Payments  
* [Stablecoins](https://iq.wiki/wiki/stablecoin)  
* ATS/ Security Token Platforms  
* [Decentralized applications (dApps)](https://iq.wiki/wiki/decentralized-application-dapp)  
  
Binance Labs provide an incubation program to support the best early-stage projects. The program provides a ten-week, on-site service intended to help teams deliver products or services with a market fit. They provide $500,000 in seed funding (10% equity), mentorship, networking, and support service.[\[2\]](#cite-id-gmhddbmcos)  
  
Projects that worked with Binance Labs include [Coin98](https://iq.wiki/wiki/coin98), [Elrond](https://iq.wiki/wiki/elrond), [Kava](https://iq.wiki/wiki/kava), [Moonbeam Network](https://iq.wiki/wiki/moonbeam-network), [Chiliz](https://iq.wiki/wiki/chiliz), [Polygon](https://iq.wiki/wiki/polygon), and more.[\[1\]](#cite-id-filnyg638nr)  
$$widget0 [YOUTUBE@VID](2Ln4ohhYYAQ)$$

Binance Labs is a social impact fund established by Binance. It is an initiative to invest, incubate, and resource blockchain...

Binance Labs

Dopex (DPX) is a decentralized options protocol that uses option pools to enable buying or selling options in a capital-efficient manner for liquidity-contributing participants.[\[1\]](#cite-id-aitebdkgf0d)[\[2\]](#cite-id-2mn0l436s2t)  
  
Dopex runs on the Arbitrum Network, an [Ethereum](https://iq.wiki/wiki/ethereum) layer-two scaling solution. The options protocol utilizes dual tokens - DPX and rDPX to coordinate the growth of a new ecosystem in a positive feedback mechanism.[\[6\]](#cite-id-w71xva0xrx)  
  
On February 17, 2022, Dopex launched the Single Staking Option Vaults (SSOVs) that allow users to lock up tokens for a specified period of time and earn a yield on their staked assets.[\[7\]](#cite-id-i7nay4q75b) As of October 2022, the total value locked (TVL) in Dopex was estimated at $23.74 million.[\[3\]](#cite-id-5mu0karnzou)[\[4\]](#cite-id-pclnce3tgx)  
$$widget0 [YOUTUBE@VID](4DeUTbeg0kM)$$  
  
# Overview  
  
Dopex is a decentralized and permissionless options exchange that aims to offer maximum liquidity, fair option pricing, high capital efficiency for sellers, cheaper options for buyers, and incentives for all protocol participants. Dopex was launched on Arbitrum, a layer-two scaling solution of [Ethereum](https://iq.wiki/wiki/ethereum), which leverages Optimistic Rollup technology.[\[8\]](#cite-id-ufgfp940r4m)[\[9\]](#cite-id-58zggn5bm75)  
  
Dopex was founded in June 2021 and is run by an anonymous group of developers. Although the team's size and structure are still undisclosed, many members, including senior developer TzTok-Chad, Casio, Witherblock, and Halko, can be identified via their Twitter accounts. Speaking about Dopex's launch on Arbitrum, Halko said:  
  
> We launched on Layer 2 simply because Ethereum trading fees are too expensive. It’s really important for options trading to keep the costs really low to ensure profitability.[\[10\]](#cite-id-hd0hkhxs7me)  
  
Halko, further speaking on Dopex's product said:  
  
> Single Staking Option Vaults allow us to bootstrap an options market very simply. We don’t want to overwhelm people, so we’re keeping it simple by offering only call options with a few strikes. Plus, building new vaults on new products is very easy, allowing us to expand the product line without introducing complexity. The vaults are also farming yield in the background. People love it; it helps us acquire more users and build a large community.[\[10\]](#cite-id-hd0hkhxs7me)  
  
The project is backed by several anonymous well-known whales from Crypto Twitter, such as [Tetranode](https://iq.wiki/wiki/tetranode), DefiGod, and DCV Capital, a proclaimed collective of angel investors.[\[9\]](#cite-id-58zggn5bm75)  
$$widget0 [YOUTUBE@VID](T3_wEuy9Oeo)$$  
  
# Tokenomics  
  
For the protocol to function synergistically, Dopex uses two tokens:[12]  
  
* **DPX** \- vanilla governance and protocol fee accrual token\.  
* **rDPX** \- rebate token \- also used for protocol usage\.  
  
## DPX  
  
DPX is the limited supply governance token for the Dopex protocol and is used to vote on proposals at the protocol and app levels. After each global epoch, DPX accrues fees and revenue from pools, vaults, and wrappers built over the Dopex protocol in addition to serving as a standard governance token.  
  
The total supply of the DPX token is 500,000.  
  
## rDPX  
  
rDPX is a token minted and distributed for any losses incurred by pool participants. Based on the net value of losses incurred at the conclusion of a pool's epoch, the number of tokens to be issued is calculated. After the period has ended, each pool participant receives a portion of the losses that are established by governance.  
  
rDPX has safeguards in place to prevent valuelessness while also giving the token intrinsic value, even though there is no supply cap.[\[14\]](#cite-id-i479tshzh1b)  
  
# Products  
  
## Single Staking Option Vaults  
  
Single Staking Option Vaults are the main Dopex product. Similar to single-sided staking vaults on other protocols, they allow users to lock up tokens for a predetermined time period and earn a passive yield on their staked assets.[\[10\]](#cite-id-hd0hkhxs7me)[\[15\]](#cite-id-2zzqc10a587)  
There are two sides to the product: stakers and option buyers. At the start and for the duration of each monthly epoch, the stakers deposit and lock liquidity in base assets (ETH, gOHM, DPX, and rDPX) or quote assets (dollar-pegged stablecoins) into a vault. The vault contract then makes premiums by selling call options on the underlying assets and deposits the money in single-staking DeFi pools to increase yield.[\[15\]](#cite-id-2zzqc10a587)  
  
Dopex additionally compensates liquidity providers by using DPX, one of its two native tokens, as payment. Dopex provides a user interface for customers to purchase call options. A user just selects options size, selects strike price, and purchases. Because the call options are European, the buyer can only exercise them before they expire. The buyer makes money at the expense of the staker if the options are "in the money" upon expiration. In contrast, if the options are "out of the money" at expiration, the staker or options seller keeps the money or premium received from the buyer.  
  
Single Staking Option Vaults offer buyers a quick and reasonably priced solution to permissionlessly buy call options on various crypto assets.[\[15\]](#cite-id-2zzqc10a587)  
  
## Option Pools  
  
Option pools allow users to earn passive yield by providing base asset and quote asset liquidity for users who are looking to buy call and put options. The asset underlying a call option is called the base asset, while the asset underlying a put option is called the quotation asset. anyone can use option pools to generate yield by passively selling options to buyers with minimal interaction with the protocol.[\[16\]](#cite-id-qb7gh6hfg3j)  
  
Users simply deposit base or quote assets into a pool to use as liquidity for those wanting to buy call and put options in order to use option pools. At the end of every week or month, pool participants would be able to collect their share of pool holdings including premiums paid for all options relative to the size of the pool as well as additional DPX token rewards at the initial stages as an incentive for providing liquidity.  
  
Therefore, whenever someone purchases an option from the pool, the premium they pay is proportionally split among the option pool's depositors. Along with the premiums, users will also earn additional DPX token incentives. Participants in the pool will get rebate tokens, known as rDPX, which are minted equivalent to 30% of all losses suffered by the pool, in the event that losses are incurred by the pool, which occurs when buyers make a net profit on their option purchases.[\[16\]](#cite-id-qb7gh6hfg3j)  
$$widget0 [YOUTUBE@VID](wJ9w9uaxHmI)$$  
  
## Volume Pools  
  
Dopex refers to volume pools as existing alongside option pools. By providing a 5% discount on all option purchases made using volume pool funds, volume pools are designed to increase the volume within the protocol. Users that deposit money into a volume pool before a weekly epoch, or predetermined time period, can use that money to buy options from any option pool at a 5% discount. For experienced options traders, volume pools present an arbitrage opportunity that allows them to buy options at a discount and quickly arbitrage them against other exchanges for a rapid profit.  
  
To further encourage pool use, volume pool depositors receive DPX token awards in the early stages. Users can withdraw any extra money from the volume pool at the conclusion of each epoch, but they will be charged a 1% fee for not using the money. Holders of DPX governance tokens are eligible to recover all fines as protocol fees.[\[16\]](#cite-id-qb7gh6hfg3j)  
  
## Dopex AMM  
  
The Dopex AMM enables anyone to buy options with the strikes of their choice for upcoming expiries by using assets from the asset pools and the so-called Black-Scholes pricing methodology, which takes volatility smiles into account. The Dopex AMM enables anyone to buy options based on the strikes of their choice for upcoming expiries by using assets from the asset pools and the Black-Scholes pricing algorithm.[\[16\]](#cite-id-qb7gh6hfg3j)  
  
## Atlantic Options  
  
On May 6, 2022, Dopex announced the launch of a new option type - Atlantic Options with the aim of offering new options/DeFi primitive that improve collateral composability and efficiency with a simple working mechanism and practical use cases that include preventing liquidations, setting up “buy the dip” stats, providing bond insurance, setting protocol wide price floors via treasury, and much more.[\[17\]](#cite-id-a6jfic2x4f)[\[18\]](#cite-id-3h3h2aewtn2)  
$$widget0 [YOUTUBE@VID](tXww8pIdds8)$$  
  
# Investors & Partners  
  
Dopex's Investors & Partners include:  
  
* [Tetranode](https://iq.wiki/wiki/tetranode)  
* DefiGod  
* Orthogonal Trading  
* LedgerPrime  
* OrcaTraders  
* Pattern Research  
* Debase  
* SCC Investments  
* DCV[\[1\]](#cite-id-aitebdkgf0d)

Dopex (DPX) is a decentralized options protocol that aims to maximize liquidity, minimize losses and maximize gain.

Dopex 

Redacted is a product suite of [smart contracts](https://iq.wiki/wiki/smart-contract) designed to provide on-chain liquidity, governance, and cash flow for [DeFi](https://iq.wiki/wiki/defi) protocols. The Redacted Cartel DAO builds the Redacted ecosystem. The Redacted protocol is powered by the BTRFLY token, which allows users to stake, earn incentives, and interact with governance proposals.[\[1\]](#cite-id-z3x9mwao2q)[\[3\]](#cite-id-p77tgae3p9)[\[4\]](#cite-id-6ou90pttrdd)  
  
# $$widget0 [YOUTUBE@VID](J8eEc_J4Znk)$$Overview  
  
REDACTED incentivizes bonding tokens from the [Curve](https://iq.wiki/wiki/curve-finance) ecosystem into their treasury in exchange for the BTRFLY token. Each BTRFLY token is backed by value from the Curve ecosystem locked in the DAO treasury. BTRFLY is an [ERC20](https://iq.wiki/wiki/erc-20) token but it bridges the core components and token to whatever chains Curve scales to.[\[2\]](#cite-id-x02b39auq3)  
The strategies employed through bonding allow REDACTED to accumulate voting power in the Curve gauge and utilize that power to vote on the behalf of minters ensuring their interests are best represented in the Curve gauge.[\[2\]](#cite-id-x02b39auq3)  
  
In addition to an aggregation of voting power, when utilizing Curve LP tokens to mint BTRFLY, users receive a maximized yield and possess a liquid token that is securely backed by stable assets. BTRFLY is primarily backed by the [stablecoin](https://iq.wiki/wiki/stablecoin) LP tokens, remaining relatively stable regardless of the market dynamics.[\[2\]](#cite-id-x02b39auq3)  
$$widget0 [YOUTUBE@VID](6iXhqKx9aIA)$$  
  
# BTRFLY Token  
  
BTRFLY is the governance token of the Redacted ecosystem. It can be used to vote on Redacted governance proposals and locked for rlBTRFLY to earn BTRFLY inflation and protocol revenue. BTRFLY has a free-floating value that is partially based on the intrinsic value within the treasury and the revenues generated by the treasury, and as such can not be redeemable for the governance tokens in the treasury.[\[12\]](#cite-id-i976u3xz5ek)  
  
The token can be minted in 4 ways which include:  
  
* Minting  
* Bonding  
* Dao Fees  
* pBTRFL  
  
## Token Allocation  
  
![pasted image 0.png](https://ipfs.everipedia.org/ipfs/QmQzsRwFEFcK9PHWJA7aLsB7ZqLpH7vhKS4877W2769Dd1)BTRFLY had an initial supply of 100,000 which was distributed through a triple Dutch Auction where OHM, CRV, and CVX were raised. At launch, BTRFLY was a rebasing token whose total token supply was consistently increasing due to staking rebase emissions, bond emissions, and DAO fee emissions.[\[11\]](#cite-id-uuxvasep6ap)  
$$widget0 [YOUTUBE@VID](fNMrzndsibA)$$  
  
## rlBTRFLY  
  
rlBTRFLY are revenue-locked BTRFLY. rlBTRFLY enables BTRFLY holders to lock their tokens for a 16 to17 week period to earn revenue from Redacted's treasury and product ecosystem. Users can also lock BTRFLY v2 tokens for rlBTRFLY to earn revenue and inflationary BTRFLY pulse emissions.[\[8\]](#cite-id-1kjov7xkfrm)  
  
After locking for rlBTRFLY, users are rewarded in ETH which is gotten from Redacted’s treasury and ecosystem of products.  
  
* 50% of Hidden Hand’s revenue goes to rlBTRFLY holders.  
* 42.5% of Pirex’s revenue goes to rlBTRFLY holders.  
  
# ![pasted image 0 (1).png](https://ipfs.everipedia.org/ipfs/QmV4ptRAMnvTMYyATq2B8ShHgrb4Bbuhi6X55ZodPvXqDD)Products  
  
## Hidden Hand  
  
Hidden Hand is a marketplace for governance incentives, also known as "bribes." Protocols can use Hidden Hand to improve governance processes and engage voters. When using Hidden Hand, [DeFi](https://iq.wiki/wiki/defi) protocols will need to deposit a bribe into the Hidden Hand smart contract, these bribes are then sent back to users as a reward for their voting power.[\[3\]](#cite-id-p77tgae3p9)  
  
Hidden Hand will automatically choose the vote distribution with the highest bribe value. Otherwise, users will be rewarded in proportion to the size of their vote for a given bribe. Bribe rewards are distributed at the end of each voting period to users who have locked their veTokens.[\[4\]](#cite-id-6ou90pttrdd)  
  
### Hidden Hand Fee Structure  
  
Hidden Hand charges its users zero fees for interacting with the Marketplace. Instead, Hidden Hand takes a 4% fee on all bribes added to the protocol, this way it generates its revenue and sends half to its treasury, and half is sent to lockers of $BTRFLY for locking their tokens in the protocol.[\[5\]](#cite-id-kepdh2x2gxh)[\[6\]](#cite-id-3oqvuu3p2lm)  
  
For example, Vesta Finance uploads a $1M bribe in VSTA to the Frax Hidden Hand market. Hidden Hand will take a 4% fee on the $1M, a $40,000 turnover. The fee is then split in half between the treasury and lockers of rlBTRFLY, which will be claimable every 2 weeks. After the bribe is added, veFXS holders could then vote for the Vesta gauge on Hidden Hand and split a $960,000 pool of VSTA rewards.[\[7\]](#cite-id-vtx1ipo8sd)  
  
## $$widget0 [YOUTUBE@VID](6KxwDGKlgmc)$$Pirex  
  
Pirex creates liquid wrappers that allow for auto-compounding and the tokenization of future yield/vote events. The Pirex ecosystem includes applications built on top of Pirex liquid wrappers that increase the utility of governance tokens for users, enable novel utility, and provide yield opportunities that are only available to Pirex wrappers users. pxCVX (Pirex vlCVX) was the first Pirex liquid wrapper, with more to follow.  
  
The Pirex team plans to launch several applications built on top of the Pirex protocol by the end of 2022, which will showcase the broad utility and flexibility of the protocol and the wide range of applications that can be built on top of it.  
  
Pirex also offers developers incentives (in the form of referral fees and grants) to those wishing to build applications on the Pirex protocol. This will provide builders with a straightforward sustainable path toward building in the Pirex ecosystem.  
  
Pirex is considered a Redacted incubated product. 75% of fees received by Pirex are paid to Redacted, of which 42.5% are distributed to rlBTRFLY Holders, 42.5% to the Redacted Treasury, and 15% to the DAO Reserves.  
$$widget0 [YOUTUBE@VID](Zs3znj56pXk)$$  
  
### Convex  
  
Convex is Pirex liquid wrapper for vote-locked Convex (CVX). It is a platform built to boost rewards for CRV stakers and liquidity providers. Convex boosts rewards thanks to the large amounts of veCRV that are under its control and the distribution of its CVX token as additional rewards.[\[8\]](#cite-id-1kjov7xkfrm)  
  
pxCVX is a pure liquid wrapper, with each pxCVX backed by 1 vlCVX, and all of the value from that vlCVX is passed onto the pxCVX holder. Its gauge votes will focus on maximizing returns to pxCVX holders and not bootstrap other Pirex or Redacted products. It is a vlCVX liquid wrapper that has the goal of increasing liquidity, yield, and utility for CVX holders.  
  
pxCVX allows CVX holders to have a liquid, tradeable version of vlCVX which is 1:1 backed by vlCVX and allows for auto compounding of yield and tokenization of future yield/vote events.  
  
There are three modes to deposit in Pirex for **pxCVX**, which are Standard Mode, Easy Mode, and Expert Mode. There are also two ways to exit pxCVX positions, which are:  
  
* Redacted will seed and maintain a pxCVX/CVX LP on Curve  
* pxCVX can be unlocked for CVX.  
  
### vlCVX  
  
vICVX is vote-locked CVX, the is the governance token of Convex. CVX can be locked for 16 to 17 weeks for vote-locked CVX (vlCVX) which cannot be traded or transferred. vlCVX holders can claim a portion of Convex platform fees and can vote for Curve governance proposals, including bi-weekly Curve gauge weight votes. vlCVX holders vote on Convex governance proposals to decide how Convex’s aggregate veCRV voting power will vote on Curve governance proposals.[\[9\]](#cite-id-5k6b10ovrqw)  
  
Pirex vlCVX is currently only on Ethereum mainnet but plans to go multi-chain shortly.[\[10\]](#cite-id-hxgsu60fzy4)  
  
# BTRFLY v2 Migration  
  
Redacted transitioned from rebasing tokenomics towards a fixed supply cap more commensurate with its focus on products such as Hidden Hand and Pirex. Both of which generate organic revenue for the protocol. This shift towards more sustainable tokenomics revolves around rlBTRFLY’s distribution of real yield from treasury farming and revenue from Redacted's products.  
  
The BTRFLY has gone from having an infinite supply to have a limited supply. At migration, the new supply was calculated as BTRFLY v2 Total Supply = (BTRFLY v1 Total Supply / 22.5%) / BTRFLY v1 Index, rounded up to the nearest 50k. [\[13\]](#cite-id-dxoum4m7n5b)  
$$widget0 [YOUTUBE@VID](bPXobpnK8qA)$$  
  
# DAO  
  
Redacted is governed by its community, which is the BTRFLY holders. The community decides the direction of Redacted, and there is also an established governance process that allows the ecosystem to evolve. This process comes in stages starting with, Drafting a Proposal, Requesting Feedback, Creating RIP based on RFF, RIP Snapshot Submission, and Linking Snapshot to a revised Commonwealth proposal.[\[15\]](#cite-id-7wt8jqjqhs)  
  
## Treasury  
  
The treasury is where all of Redacted's revenue and governance power is stored. Most revenue gotten by Redacted is generated through various forms such as bonds, bribes, and yield farming strategies.[\[16\]](#cite-id-x6pfx1ip46)  
  
# Partners  
  
Protocols that integrate Redated products include Abacus, [Alchemix](https://iq.wiki/wiki/alchemix), Aura, [Balancer](https://iq.wiki/wiki/balancer), Berachain, Biba, [Chainlink](https://iq.wiki/wiki/chainlink), Citadel Dao, [Curve Finance](https://iq.wiki/wiki/curve-finance), Commonwealth, Convex, dAMM Finance, Debt Dao, [Dopex](https://iq.wiki/wiki/dopex), Drops Dao, [JPEG'd](https://iq.wiki/wiki/jpegd), Fiat Dao, Floor, [Frax Finance](https://iq.wiki/wiki/frax-finance), [Lido](https://iq.wiki/wiki/lido-dao), Mover Dao, New Order, [Olympus](https://iq.wiki/wiki/olympus-dao), [Perpetual Protocol](https://iq.wiki/wiki/perpetual-protocol), Ribbon, [Stake Dao](https://iq.wiki/wiki/stake-dao), Stargate, Tokemak, Tribe, Umami, Utopia Labs, Velodrome, and Vesta.[\[20\]](#cite-id-q34h6qdmr8)

Redacted is a product suite of smart contracts empowering on-chain liquidity, governance, and cash flow for DeFi protocols.

[REDACTED]

JPEG'd is a [blockchain](https://iq.wiki/wiki/blockchain)-based lending protocol that enables participants to open collateralized debt positions (CDPs) using [non-fungible tokens (NFTs)](https://iq.wiki/wiki/non-fungible-token-nft). The JPEG'd protocol allows users to deposit their NFTs such as [Cryptopunks](https://iq.wiki/wiki/cryptopunks), [Bored Ape Yacht Club](https://iq.wiki/wiki/bored-ape-yacht-club), and [Mutant Ape Yacht Club](https://iq.wiki/wiki/mutant-ape-yacht-club) into a [smart contract](https://iq.wiki/wiki/smart-contract) to mint a [stablecoin](https://iq.wiki/wiki/stablecoin), PUSd. This gives users liquidity on their NFTs and the ability to earn yield in [DeFi](https://iq.wiki/wiki/defi).[\[1\]](#cite-id-5bysj8afezp)[\[2\]](#cite-id-d5b79ymd0w7)[\[3\]](#cite-id-xtjja7yfwaf)  
  
On April 27, 2022, The JPEG'd Protocol was launched and immediately saw a deposit of 50 [Cryptopunks](https://iq.wiki/wiki/cryptopunks) as collateral and obtained a line of credit in less than 12 hours after launch.[\[4\]](#cite-id-ku5auppoczp)[\[5\]](#cite-id-h9z3qq204zj) As of October 2022, the total value locked (TVL) in JPEG'd is approximately $12.16 million.[\[6\]](#cite-id-5upfar463ut)  
$$widget0 [YOUTUBE@VID](QDNujXQfTQw)$$  
  
# Overview  
  
On March 1, 2022, The JPEG'd project was launched with the aim of bridging the gap between [DeFi](https://iq.wiki/wiki/defi) and NFTs enabling NFT holders to open non-fungible debt positions (NFDPs) using their non-fungible tokens as collateral. In the future, it will expand into all NFTs and see musical artists own the rights to their music as an NFT and obtain a line of credit in the form of $PUSd.[\[7\]](#cite-id-8flbkzgo9a8)[\[8\]](#cite-id-rk46sz05jjp)  
  
The interest rate for loans is around 2% APY and is dynamically adjusted over time to remain competitive. Users also pay a 0.5% withdrawal fee. Both of these fee structures help to power the treasury and incentivize continued liquidity provision. Interest accrues as long as the user has an open debt position, and full repayment is required in order for the user to retrieve their NFT from the JPEG’d vault.[\[1\]](#cite-id-5bysj8afezp)  
  
JPEG’d is founded and advised by The Chad Council. The council has some of the most knowledgeable and reputable people in the DeFi and NFT space. They include [Tetranode](https://iq.wiki/wiki/tetranode), [Dopex](https://iq.wiki/wiki/dopex), The LAO, DC Investor, Carson Cook, and many others. In February 2022, the council announced that they had raised $2 million for 5% of the supply nearly entirely from angel investors.[\[9\]](#cite-id-uixccukjr8j)  
  
In October 2022, JPEG'd announced that the Azuki and [pudgy penguins](https://iq.wiki/wiki/pudgy-penguins) vaults are open for deposits and borrows with 2% borrow rate on PUSd and 5% on pETH.[\[16\]](#cite-id-49xkvzqsa4)  
  
<br>  
$$widget0 [YOUTUBE@VID](zHZTDqZHOpU)$$  
  
# $JPEG Token  
  
$JPEG is the native utility and governance token of JPEG'd with a total supply of 69,420,000,000. By making proposals and casting votes on them, token holders can participate in governance. Governance consists of adjusting the protocol's settings, such as vault debt limits, and interest rates, or allowing higher credit limits for certain [NFTs](https://iq.wiki/wiki/non-fungible-token-nft).  
  
Initially, $JPEG was designed as a governance token with no intrinsic value that could be used to vote on proposals. The protocol's users can alter a number of variables, such as interest rates and liquidation costs. By encoding it in a [smart contract](https://iq.wiki/wiki/smart-contract), the token can also be used to raise the credit limit of particular NFTs that have been approved by governance.[\[11\]](#cite-id-n95x7tgvep)  
  
## Token Allocation  
  
| S/N | Distribution | Amount |  
| --- | ------------ | ------ |  
| 1. | Team | 20,826,000,000 |  
| 2. | Advisors | 3,471,000,000 |  
| 3. | DAO | 24,297,000,000 |  
| 4. | Donation Event | 20,826,000,000 |  
  
## $PUSd  
  
$PUSd is a synthetic [stablecoin](https://iq.wiki/wiki/stablecoin), native to the protocol. When users initiate an NFDP and transfer their NFT to a JPEG-enabled vault, they always receive their loan amount in $PSUd. As a result, loans may be disbursed without any issues, and the protocol has greater direct control over how it manages and settles debts.[\[1\]](#cite-id-5bysj8afezp)  
  
This [stablecoin](https://iq.wiki/wiki/stablecoin) is designed to be pegged 1:1 with USD and JPEG’d have several mechanisms in place to help ensure that it does, such as liquidity bootstrapping initiatives and partnerships with other protocols, such as [Abracadabra](https://iq.wiki/wiki/abracadabramoney) and Tokemak, to develop Factory Pools on Curve. This allows users to take out their loan in $PSUd and then swap it for other stablecoins like $MIM, $[USDC](https://iq.wiki/wiki/usdc), or $[USDT.](https://iq.wiki/wiki/tether) Users can also earn liquidity provider rewards by adding liquidity to this Curve pool.[\[5\]](#cite-id-h9z3qq204zj)  
  
## $pETH   
  
pETH is synthetic Ethereum native to the JPEG’d protocol. The pETH vaults work identically to the pUSD vaults. Users deposit their NFTs and mints pETH and either becomes a liquidity provider in the Curve pETH / ETH pool or swap their pETH for another asset.[\[17\]](#cite-id-suezeqee9sm)  
  
$$widget0 [YOUTUBE@VID](D11DC1H_UDM)$$  
  
# Partnerships  
  
## JPEG'd x Olympus DAO  
  
![1_p6PLd9FFgGrZnzZkvQxiwA.png](https://ipfs.everipedia.org/ipfs/QmT5dXcaxbdU8YeqyTQPXDisGbouUjTXvZJj8qSA7Rs5dB)  
On November 12, 2021, JPEG’d announced its launch of Olympus Pro bonds as one of the first NFT-focused protocols to utilize bonds for liquidity. Olympus DAO helped oversee the JPEG launch as a bond program for its ETH/JPEG [liquidity pool](https://iq.wiki/wiki/liquidity-pool). There is an ETH/JPEG liquidity pool on [SushiSwap](https://iq.wiki/wiki/sushiswap), enabling holders of JPEG to purchase or sell their JPEG tokens.[\[12\]](#cite-id-kaz018xbrzd)  
  
## JPEG’d x Tokemak  
  
On November 15, 2021, JPEG’d announced its intentions to pursue various strategies utilizing Tokemak, beginning with launching a “Token Reactor” to deepen JPEG’s liquidity at the token’s launch. Tokemak is a novel DeFi primitive designed to generate sustainable liquidity. Token Reactors are token-specific, Impermanent Loss-mitigating depositories where “Liquidity Providers’’ are incentivized to deposit tokens (OHM, ALCX, SUSHI, etc.), and holders of the native protocol token “TOKE” can stake their TOKE as “Liquidity Directors’’ to direct those assets to DEXs as liquidity.[\[13\]](#cite-id-p98r826p9c)  
  
## JPEG’d x Abracadabra Money  
  
On November 19, 2021, JPEG'd announced its partnership with [Abracadabra Money](https://iq.wiki/wiki/abracadabramoney). The team announced that it was seeding a liquidity pool incorporating MIM, the stablecoin of the Abracadabra protocol.[\[14\]](#cite-id-w2ahoph8z3)  
  
## JPEG’d x DOPEX  
  
On November 23, 2021, JPEG'd announced its integration with [Dopex](https://iq.wiki/wiki/dopex). Dopex is a permissionless, decentralized, and on-chain options protocol that is on the Arbitrum network (layer 2 of Ethereum [mainnet](https://iq.wiki/wiki/mainnet)). They are building an options protocol that will enable, cheap, deep liquidity, and on-chain options in [DeFi](https://iq.wiki/wiki/defi).[\[15\]](#cite-id-u9laso79q2)

JPEG'd is a blockchain-based lending protocol enabling participants to open collateralized debt positions (CDPs) using non-fungible tokens (NFTs).

JPEG'd

**Jones DAO** is a yield, strategy, and liquidity protocol for [DeFi](https://iq.wiki/wiki/defi) options built on top of the [Dopex ](https://iq.wiki/wiki/dopex)options platform.[\[1\]](#cite-id-hcr57vw9wvp)[\[2\]](#cite-id-da73vk8q3yr) Jones Dao is available on Arbitrum, a leading L2 scaling solution.[\[3\]](#cite-id-m1tzlajm28)[\[4\]](#cite-id-kx6fp3ybwne) Jones Dao is governed by JONES token.[\[1\]](#cite-id-hcr57vw9wvp)  
$$widget0 [YOUTUBE@VID](Ded-u3VU5Ic)$$  
  
# Overview  
  
Jones DAO deploys vaults that enable one-click access to institutional-grade options strategies while unlocking capital efficiency and liquidity for [DeFi](https://iq.wiki/wiki/defi) options through yield-bearing options-backed asset tokens. Jones DAO allows users to earn multiple layers of yield on their assets of choice. Depositors can unlock a risk and yield profile unique to Jones DAO and their personal preferences by combining the power of jAssets, Synthetic LPs (SLPs), and JONES farming. The Jones Synthetic LPs replicate the payoff structure of a regular LP by writing options on the underlying assets.  
  
## jAssets  
  
jAssets are fully composable yield-bearing tokens that aid tokens deployed in Jones yield strategies to gain liquidity and capital efficiency. These jAssets can only be minted when deposits are made to a primary Jones Vault, which is used to represent the deposit of a specific Asset e.g ETH.  
  
The jAsset token is burned upon withdrawal, and the deposit made initially, including yield is returned to the depositor. jAssets also have incentivized liquidity pools. These liquidity pools enable users to swap out of their Jones Vault position and the underlying locked assets at any time.[\[3\]](#cite-id-m1tzlajm28)  
$$widget0 [YOUTUBE@VID](jqyUTbMge28)$$  
  
# Vaults  
  
Jones DAO provides vaults for a variety of assets and risk profiles. It generates yield by deploying options strategies on assets deposited in Jones Vaults. [\[9\]](#cite-id-tqqdllq649s)  
  
Jones has several vaults that cater to different risk profiles of traders, they include:  
  
* ETH primary vault, risk-averse  
* gOHM primary vault, bull long vault  
* DPX primary vault, risk-averse  
* rDPX primary vault, risk-averse  
  
Each vault has a given period, a time window in which the vaults are open for individuals to deposit and withdraw. Users can deposit their tokens and for primary vaults mint jAssets throughout this time, or withdraw their tokens and claim their yield by burning their jAssets. When the Jones Vaults get locked, deposits are further closed till the next set time. During this time, the vaults can then be curated by the DAO's strategies. Also, deposits can not be transferred out of the vault, but jAssets can be exchanged for other tokens on [SushiSwap](https://iq.wiki/wiki/sushiswap) through the DAO's jAsset [liquidity pools](https://iq.wiki/wiki/liquidity-pool).[\[11\]](#cite-id-aviz302bcwh)[\[5\]](#cite-id-rn81kmyigr)  
  
## Primary Jones Vaults  
  
The primary Jones Vaults aim to produce risk-averse and stable yields in all market conditions, as they are more safer and conservative. It is used to mint jAssets, with Metavaults for different risk profiles.  
  
Most tokens deposited into this vault are used to earn yield by writing covered calls, and by supplying these Assets to other platforms that give out these call options.[\[10\]](#cite-id-z6orteaob6)  
  
## Auxiliary Jones Vaults  
  
The Auxiliary Jones Vaults use more directional/aggressive options strategies to address various risk profiles. These vaults can not be used to mint jAssets as they have variable ratios of selling/buying options according to their risk profile.[\[12\]](#cite-id-z6orteaob6)  
  
## Metavaults  
  
Metavaults can best be defined as vaults that hedge or lever [Dopex](https://iq.wiki/wiki/dopex) LP tokens for [impermanent loss](https://iq.wiki/wiki/impermanent-loss) protection or extra yield.[\[15\]](#cite-id-sq76jl56nei) Users provide $DPX or $rDPX LP tokens obtained via DEX LPs and deposit those into the Metavault of their choice on Jones’ interface. Depositors decide their market sentiment and deposit into the directional vault that best suits their market outlook. Instead of the typical vault structure, users deposit at any time via an epoch that is one week long.[\[16\]](#cite-id-2uyu6u03v2w)  
  
# Tokenomics  
  
![Screenshot 2022-01-11 at 1.56.38 AM.png](https://ipfs.everipedia.org/ipfs/QmNZfcagVX9PzFKDWXDthtS7g6EVzsCGhud8Q2RWZPepGg)JONES is a [governance token](https://iq.wiki/wiki/governance-token) of Jones DAO. It is used to vote on important protocol decisions and can be locked to accrue part of the protocol's fees. JONES releases emissions. To encourage deep liquidity and a strong peg, JONES emissions are primarily directed at jAsset/Asset liquidity pools. Also, the emissions are used as rewards to encourage the supply and borrowing of jAssets, JONES, and [stablecoins](https://iq.wiki/wiki/stablecoin) like MIM, [FRAX](https://iq.wiki/wiki/frax-finance), or dpxUSD. [\[13\]](#cite-id-te6pec9536)  
  
## veJONES  
  
veJONES are earned when a user locks JONES. The veJones design is based on the governance models implemented by [Curve Finance](https://iq.wiki/wiki/curve-finance), [Badger](https://iq.wiki/wiki/badger-dao), and Ribbon Finance.  
  
* veJONES holders are able to vote on gauge weights for Jones Vaults and jAsset pools. This aligns the usage of the platform with long-term JONES holders. For example, depositors in the ETH Jones Vault can purchase and lock JONES, to vote for greater JONES emissions for the ETH Jones Vault.  
* veJONES gauges on jAsset pools and Jones Vault allow the protocol to direct emissions only at the Vaults and Pools that people use and in this way nflation becomes optimized.  
* Users can purchase and lock JONES for veJONES to earn a portion of protocol fees and additional JONES emissions.[\[14\]](#cite-id-atdxin9mf7l)  
  
Users that have locked veJONES are also entitled to a rewards Boost.[\[16\]](#cite-id-25higdf13d8)  
  
## Token Distribution  
  
The token has a total supply of 10,000,000 JONES coins.  
  
| Allocation | Percentage% | Vesting Period |  
| ---------- | ----------- | -------------- |  
| Operational Allocation | 15% | This allocation is used to handle governance, incentivize community contributions and strategists, help grow the platform and recruit talent, and account for operating and growth costs. |  
| Platform Rewards | 42% | Distributed over approximately 5 years. These rewards will incentivize the use and upkeep of the Jones DAO platform. |  
| Core Contributor Allocation | 12% | Vested for 18 months and distributed using a drip system via a smart contract. |  
| Public Sale | 17% |  |  
| Private Sale | 9.67% | 3-month cliff, and then vested over 6 months. |  
| Airdrop | 1% | Split between guarded launch members and Dopex SSOV users. |  
| Olympus | 3.3% | The proposed allocation for [OlympusDAO](https://iq.wiki/wiki/olympus-dao) to be held in perpetuity.[\[17\]](#cite-id-zv4v4ebhnb8) |  
  
## Protocol fees  
  
The current protocol fees are earned on total TVL, and on Jones Vaults' performance, which are:  
  
* 2% annual fee on total TVL, applied at each epoch.  
* 20% performance fee on yield generated.[\[17\]](#cite-id-65adrhr65t2)  
  
# Partners  
  
* [Dopex](https://iq.wiki/wiki/dopex)  
* [Olympus Dao](https://iq.wiki/wiki/olympus-dao)  
* [GMX](https://iq.wiki/wiki/gmx)  
* PlutusDAO  
  
# Hat Council  
  
* [Tetranode](https://iq.wiki/wiki/tetranode)  
* DeFifrog  
* [Redacted](https://iq.wiki/wiki/redacted)  
* [Olympus Dao](https://iq.wiki/wiki/olympus-dao)  
* David Iach  
* Small Cap Scientist  
* Sami  
* Dark King  
* Revofusion

Jones DAO is a yield, strategy, and liquidity protocol for DeFi options, built on the Dopex platform.

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