Tokenomics
Two token model - emission and usage

Two token model

Dopex makes use of two tokens for the protocol to work in a synergistic manner:
  • 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 protocol and app level proposals. Apart from being a vanilla governance token, DPX also accrues fees and revenue from pools, vaults and wrappers built over the dopex protocol after every global epoch.
Total Supply of this token will be 500,000 (500k).

Distribution

  • Operational Allocation: 17%
    • Distributed across 5 years. This allocation is used to initially handle governance, incentivize development of community suggestions and help grow the platform with newer features/upgrades and account for other operational costs.
  • Farming (Liquidity Mining): 15%
    • Farming period is set to 2 years with an initial boosted rewards period of 4 weeks.
  • Platform Rewards: 30%
    • Distributed over a period of approximately 5 years. These rewards will incentivize the use and upkeep of the Dopex platform.
  • Founders Allocation: 12%
    • 20% initially staked in liquidity pools
    • 80% vested for 2 years distributed using a drip system via a smart contract
  • Early Investors & Token Sale: 26%
    • Early Investors: 11%
      • 50% Vested over 6 months
    • Token Sale: 15%

rDPX

rDPX is a token minted and distributed for any losses incurred by pool participants. The amount of tokens minted are determined based on the net value of losses incurred at the end of a pool's epoch. A percentage of the losses, which's determined by governance is minted for all pool participants after the epoch has ended. rDPX while having a no cap supply - has mechanisms in-place to avoid it from being valueless while also providing intrinsic value to the token.
  • rDPX would be a fee requirement for future app layer additions to Dopex such as vaults.
  • Dopex would support rDPX as collateral to borrow funds from Margin to leverage option positions.
  • rDPX would be usable as collateral to mint synthetic assets, commodities etc. which could further be used to create options for synthetic non-crypto assets.
  • Fee accrual can be boosted via staking rDPX.
Since rDPX would initially not have a set emission curve - scarcity may prevail initially if purchasers aren't net profitable. The emission mechanism could be changed in the future via governance votes.

Usage

The DPX and rDPX tokens are used for a variety of use cases aimed to enhance the platform's usability and liquidity while offering it as incentive to create a superior alternative to current option platforms in terms of price and PnL.

Governance

The DPX token can also be used as a proxy for voting in decisions based on proposals offered by the community. Similar to existing projects that follow this method such as MakerDAO, Compound, yearn.finance etc.
Dopex will make use of the DPX token to vote on and pass proposals to actively govern the protocol and ensure decisions are made to improve it and achieve it's goal of being the best source for liquid options.
Some of the initial governance duties are controlling the IV multiplier of the option pools, controlling the strike range of the option pools, controlling the IV cap of the option pools.

Fee accrual

The Dopex protocol collects fees from option pool purchases, swaps, volume pool penalties, strategy vaults etc. All the fees collected would be distributed to DPX token holders at the end of weekly global epochs. rDPX will be used to boost the rewards received from fees. Read more about the fees here.

Synthetic collateral

rDPX can be used as collateral to mint synthetic derivatives of cryptocurrencies, stocks, ETFs, currencies, commodities etc. which can then be deposited into option pools to earn further yield for pool contributors.
Synthetic derivatives offer exposure to traditional markets apart from crypto and give rDPX tokens real value. All derivatives minted would need to be over-collateralized. This would mean for all value generated through derivatives, the rDPX token would require a minimum market capitalization to fully fund these derivatives. Say for example, $100m worth of derivatives are minted on Dopex and the minimum collateralization ratio for a synth is 250%, the rDPX token market cap would need to be a minimum of $250m to ensure these synths are fully collateralized and cannot be liquidated.

Rebates

Dopex pool option writers are regularly exposed to risk from losses accrued during periods of extreme volatility. To subvert this risk, option writers are compensated with rDPX tokens after every epoch relative to the losses accrued from options written during this period.
This rebate mechanism for option writers makes it a very attractive passive source of income for any entity especially in comparison to option writing in traditional markets.
Rebates considerably help offset disproportional losses that may occur due to tail risk events taking place. The rDPX tokens received in the form of rebates can be further used as synths in options to compound yields from DPX tokens collected as pool participation rewards.

Farming

Farming via staking in different pools will be an important way Dopex will provide the initial liquidity for DPX and rDPX.
Overall farming period - 2 years (104 weeks)
Total distribution via farming: 75k DPX and 2 million RDPX
x2 Rewards for first 4 weeks
Time
Total DPX Emission
Total rDPX Emission
Week 1 - 4 (x2 Rewards)
5555
148148
Week 5 - 8
8333
222222
Week 9 - 12
11111
296296
Week 13 - 16
13888
370370
Week 17 - 20
16666
444444
Week 21 - 24
19444
518519
Week 25 - 28
22222
592592
Week 29 - 32
25000
666666
Week 33 - 36
27777
740740
Week 37 - 40
30555
814814
Week 41 - 44
33333
888889
Week 45 - 48
36111
962963
Week 49 - 52
38888
1037037
Week 53 - 56
41666
1111111
Week 57 - 60
44444
1185185
Week 61 - 64
47222
1259259
Week 65 - 68
50000
1333333
Week 69 - 72
52777
1407407
Week 73 - 76
55555
1481481
Week 77 - 80
58333
1555555
Week 81 - 84
61111
1629629
Week 85 - 88
63888
1703703
Week 89 - 92
66666
1777777
Week 93 - 96
69444
1851851
Week 97 - 100
72222
1925925
Week 101 - 104
75000
2000000
The different pools available for staking into during the farming period are:

DPX (Single token staking)

Will constitute 20% of DPX rewards and 20% of RDPX rewards, 4 weeks of boosted rewards. 15k DPX (3% of total supply) and 400k rDPX to be distributed by this pool.

DPX/ETH (LP token staking)

Will constitute 60% of DPX rewards and 40% of rDPX rewards, 4 weeks of boosted rewards. 45k DPX (9% of total supply) and 800k rDPX to be distributed by this pool.

rDPX/ETH (LP token staking)

Will constitute 20% of DPX rewards and 40% of rDPX rewards, 4 weeks of boosted rewards. 15k DPX (3% of total supply) and 800k rDPX to be distributed by this pool.
Last modified 3mo ago