We started $DRC and Dracula Protocol as a reaction to the unfairness that occurred with Sushiswap. When Sushi entered the market, centralized exchanges and major corporations listed and supported the project, despite its lack of ingenuity or novel ideas. This support from big money resulted in vicious dumping on ordinary retail investors and eventually led to a massive price crash. Dracula Protocol was meant to combat this type of behaviour; our idea was to exploit and punish whale-baked farms with a second-layer “vampire” concept.
Let’s take a closer look at the last 7 days to understand how we got to our current situation. Initially, we had a great start and amazing community support. Our TVL was growing, and our Market Capitalization to TVL ratio was kept at a predictable 3–4% level during the first two days.
However, as we grew, things began to change. After two days, we started to get additional undesired attention from Sam. One Example and from some other big wallets. As a result, our TVL grew from $20mil~$30mil up to $100mil in just one single night. Although this was an exciting situation, it was not very healthy. It led to our capitalization being capped at 1–2% of our TVL, and we started to bleed. It is worth mentioning that most yield farming projects usually have a Market Capitalization to TVL ratio of ~10%-30%. In short, it was unusual for a new project.
The irony here is that we, a protocol which makes “victims” of other farms, actually ended up as the victim. We believe that we were reversely drained and exploited by huge pockets and whales with whom we are all familiar. In turn, we think that they dumped on people who believed in our idea.
While this seems initially to be a terrible thing for the project, it actually has helped with our decentralization. DRC has very few large bag holders or huge farmers. Most of our initial supply has been distributed to ordinary users of the DeFi ecosystem. Our community is now almost entirely retail investors and true supporters of this project’s vision, which is exactly from where we derive our strength: from the activism and loyalty of our remaining community members.
We, the Dracula team, don’t have deep pockets. We have no corporate support, no VC backers, and no secret donors. And we’re proud of that. It’s what makes us different from other projects like us (such as Sushi, for example). We earnestly set out to build a tool that would evolve to the point that would stop exploiting the ecosystem and eventually coexist within it with a capitalizing value above the victims’ APY. However, pressure, perfidy from whale-miners and wallets associated with one of the CEX squandered that possibility and squelched new community-driven projects and ideas.
We Aren’t Alone
While we are frustrated with what has happened, we believe it is important for our community to understand that this was not a unique situation in the DeFi universe. The entirety of DeFi has been a zero-sum game over the last few months; money wasn’t being generated; it was being redistributed among participants. The vast majority of that distribution has been from small investors to larger wallets. It hasn’t even been subtle; look at the pump and dumps that happened with Sushiswap and Curve. Moreover, almost every major company in the DeFi ecosystem (Curve, Uniswap, 1inch, Dodo…) has conducted some private sale exclusively for a closed community of investors and donors who bought their shares at a 90–95% discount from current market prices. These sales have been exclusionary and predatory; no ordinary users without tight connections to corporate investors were ever invited to join. On top of all of this, the projects themselves premined massive portions of supply, securing their own future wealth to the detriment of retail.
All of this caused ordinary investors to receive incredibly minute fractions of the supply, as they were forced into liquidity mining programs for tokens with barely any utility and which suffered from constant and relentless price declines. These projects, often by design, allow the initial corporate investor circle to capitalize on the efforts of common users, eventually allowing these whales to dump on community members. You probably are already aware of all of this. It’s happened with most DeFi coins at this point.
A Declaration of War
It doesn’t have to be like this. We can make a change and be reactive to our environment. Accordingly, we propose a new direction for our project. That direction is a declaration of war against the current vicious circle that has harmed so many average investors. We invite all members of the crypto community to join with us.
Our declaration of war (and our proposal for a change) begins with the end of DRC inflation, which will take place over the next few days. After inflation comes to an end, our system will begin to deflate permanently. Total minted DRC, most likely, will never hit the 10 million mark. Additionally, to maintain a system wherein the community can enjoy both rewards for providing liquidity and a constantly deflating supply, our APY will be changed to represent 90% of our victim’s APY.
TLDR: Permanent value accumulation. Instead of getting a lot of a token that is constantly worth less than it was before, you will get some of a token that is constantly increasing in value. Farming will be slower, supply will go down, and demand will go up.
Why This Will Be Attractive And Sustainable
At this point, you may be asking yourself: why would anyone enter our ecosystem if it gives only 90% APY
There are several reasons why this proposal would create a more sustainable and enticing ecosystem for outside investors:
Less Farm Dumping: with this new model, farmers won’t need to harvest and immediately sell their rewards, as their reward is a permanently deflating currency that stores its value. As a result, fees both for the ecosystem and for a user will significantly decrease. Which sounds better to you: going to sleep every night with an ever-growing reward value, or haphazardly claiming your rewards and selling them before they suffer another day of 30% price dumping?
A Fresh Start: Dracula Protocol becomes a symbol. We show the world that we can become a new community-driven ecosystem that capitalizes and grows on those who exploit ordinary users. This may lead to a new kind of token economy. The community will have an ultimate say in what that means: governance tokens, NFTs etc. all working for this same purpose.
APY Rate Will Go Down, But Performance/ROI Will Increase: current APY measurement doesn’t include inflation on itself. More accurate metrics should include both inflation and extrapolate current inflation rate for tokens with the same market capitalisation. Incorporating these factors, the updated APY for deflationary DRC, while lower on its face, will outperform the current ROI for inflationary DRC by a large margin.
Our Community: we have an incredible community full of support and altruism; for that, you have our unbridled admiration and thanks. Together, the community has created altruistic drain bots, giveaways, four new adapters, tons of proposals, memes and ideas. We can’t thank you enough for all your enthusiasm. We believe that many of these people will remain in our ecosystem with this new path. We are excited about our future with them. We know that they will be able to see the forest past the trees and recognize that, even with a lower TVL, our new ecosystem will be sustainable.
Ease of Staking: it will be easier to stake with us, than elsewhere. We’ll focus on users’ experience and comfort.
The Good Stuff: lots of fun and memes with the spirit of rebellion
We invite everyone to join us in this fight for a better DeFi future. We believe in our ecosystem. We believe in DeFi. And we believe in you. We hope to coexist with many of the present projects with fair value/token distribution and encourage their innovative ideas. Ultimately, all of this will be for the community to decide.
As we progress, we will continue to deliver a universal yield tool for every project we can get our fangs into. While we are small, we are strong, fast and dynamic. We are prepared for an arms race with large and clumsy corporations. They don’t know what’s coming.
- Adapters: We are adding a Harvest Finance adapter soon. Verification is pending for several new adapters created by community members that will also be released in the nearest future.
- Reduction of Dev Share: Our current 8% dev share isn’t fitting into the new math anymore, we’ll start burning 50% of all of the additional mintage after the end of the inflation phase to decrease it to 4%.
- DRC Airdrop: Already collected dev DRC will be airdropped in two weeks or so. 25% of it will go to our users and supporters. There will be an additional airdrop of another 25% to all Uniswap users from uni airdrop to introduce Dracula Protocol to them. Anyone eligible for uni airdrop will be able to claim 30 DRC until the whole reward pool is empty.
- CEX Listings: We’ve accepted several listing proposals, and we are looking forward to possible listings this week. As the inflation issue will be resolved at this point, we believe the moral concerns we previously articulated have been resolved.
- Audits: We have also tried to reach many famous and well-known auditor teams, but we’ve failed as they were unable to audit us in the next few weeks. We are still hoping for a review for any personal security audit or tech review but still did not receive a positive answer of applying from anyone. We were also offered help with the «simplified procedure» of getting auditing papers done, but we refused. Bounty for any professional audit or detailed security review is still valid — 10 ETH.
- Cause for Concern In Other Farming Contracts: In an upcoming article that will be released within the next day, we will disclose some information regarding the quality of audits in the DeFi ecosystem and describe a potential vulnerability in other farming contracts that was ignored by 4–5 independent audits. We fixed this potential vulnerability in our code.
We need your help to get the word about this absolutely momentous news out to the world. We ask every community member to share this article. More details.
Let’s begin the bloodbath.