V2 DRC Tokenomics
Dracula Protocol V2 launch is around the corner! We have recently completed an audit of our V2 contracts with Solidity Finance, which resulted in no security issues and overall praise for our developers’ abilities.
With this audit complete, the Dracula team now feels confident enough to move onto the testing phase of our contracts, which will begin with deploying the V2 contracts on the Ethereum Kovan testnet. We will be running a series of stress-tests, but are confident that the functionality of the DRC token will remain unchanged throughout this testing phase and are comfortable releasing details about the planned tokenomics for V2.
Dracula Protocol V2 will continue to use the DRC token that was used on V1, although the utility of DRC will be much different.
DRC Supply Cap: The DRC token, which can be found on Etherscan at https://etherscan.io/token/0xb78B3320493a4EFaa1028130C5Ba26f0B6085Ef8, will have a capped supply at the launch of our V2 contracts, which will be an estimated amount of 15,000,000 DRC. At the moment of deploying, all DRC minting will be disabled. From here on out, there will never be a new DRC token minted again. Although this can be changed through a governance vote, the Dracula team strongly recommends a hard-cap on the DRC supply.
Static Supply: Although there has been discussion around deflationary tokenomics, we have decided to not follow that path. By not having a percent of our drain allocated to burns, we can use the additional yield to increase the earnings of stakers for our victim pools and our DRC pool.
Drain Allocation: Once every day, our platform will sell underlying rewards for ETH, which is known as a ‘Drain’. This drain will be called by the Dracula team and is funded by a portion of the underlying yields from victims. Going forward, we have plans to integrate a system of nodes to automatically call the drain once certain parameters are met through a strategic partnership.
Each drain will be distributed as follows:
85% of each drain goes to liquidity providers of victim pools, such as SushiSwap or Pickle. These funds are automatically invested into an interest-earning ETH strategy, which will accrue additional yield until each user chooses to harvest their individual earnings. Users can choose to harvest their yields on ETH, or in DRC, for any of the pools. If a user chooses to harvest their yields in DRC, then the ETH they have earned is used to buy DRC off the open market at the time of withdrawal.
Note: If a user unstakes within 24 hours from depositing into victim pools, there is a 0.5% fee taken from their liquidity. This is to prevent manipulation of the drain mechanism.
3.75% of each drain goes to stakers in the DRC staking pool. This will be the only DRC staking pool, yields will be in ETH.
3% of each drain goes to liquidity providers of the DRC/ETH pool on {REDACTED}, yields will be in ETH.
3% of each drain goes to liquidity providers of the DRC/ETH pool on Uniswap, yields will be in ETH.
3.75% of each drain goes to the developer fund to help continue the ongoing development of Dracula Protocol, yields will be in ETH.
1.5% of each drain goes to the gas fund to pay for future drains, yields will be in ETH.
Note: After each drain, these rewards are linearly distributed to each user over the following 24 hours, which will ensure consistent yields rather than spiked earnings after each drain.
DRC Utility: The DRC token can be currently staked to earn 3.75% of all ETH that comes from drains. This design ensures that APRs for DRC staking is directly dependent on TVL of Dracula Protocol and the APRs from underlying platforms.
If Dracula Protocol manages to capture significant TVL from underlying platforms with high APRs, the staked DRC token will have a direct cash-flow to this performance, paid in ETH. This token design is meant to focus on ROI for DRC token holders, where their initial investment to earn a share of protocol performance is quickly outpaced in terms of ETH earned.
DRC also has voting rights to the future of Dracula Protocol. Going forward, we plan on adding new features to add to the utility of DRC, such as integrations with lending platforms, tokenized staking for composability, and more.
We believe that the DRC token can be used as an index token for the performance of the underlying DeFi platforms, as its returns are directly dependent on APRs for its victims, which are a result of healthy token appreciation from underlying platforms like SUSHI or PICKLE. This functionality creates a synergy between Dracula and its victims and opens the possibility for future collaboration with any of the underlying platforms.
The implications of the V2 DRC token design are massive and we are truly excited to have this idea come to fruition. Our next update will be at the launch of our V2 contracts on mainnet, where all of the described changes will be live in production. We will also be detailing our ecosystem partners after our V2 launch, which are fundamental to Dracula Protocol, DRC, and the future of DeFi.
Keep up with us on our socials for further updates, soon to come!
Twitter: https://twitter.com/DraculaProtocol
Telegram: http://t.me/DraculaProtocol
Discord: https://discord.gg/7JgByFU
