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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%
$DPX Bull Thesis
$DPX Bull Thesis
Valuing $DPX - a bull case has been presented in this article

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.
*the current rDPX whitepaper is being revised - the new whitepaper can be found here.

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.

Liquidity Mining

We have a full fledged liquidity mining program. Read all about it here.