Two token model - emission and usage
Dopex makes use of two tokens for the protocol to work synergistically:
- DPX - The vanilla governance and protocol fee accrual token
- rDPX - The rebate token - Collateralized and used to access our synthetic market
DPX is a unique governance token that is essential to the Dopex protocol. It is designed to enable DPX holders to vote on crucial protocol and app-level proposals, giving them a voice in shaping the direction of the Dopex ecosystem.
However, DPX is much more than just a vanilla governance token. It is also designed to accrue fees and revenue from various sources, including:
- Option Vaults
- Structured Vaults
- Lending Money Market
- Interest Rate Option Market
- Secondary Option Market
- Liquidation Insurance
- Option Perps
- and many more
This means that DPX holders benefit from the protocol's success and earn rewards for their contributions.
The total supply of DPX is limited to 500,000 (500k) tokens, making it a scarce asset with a finite number of units available. This ensures that the value of DPX remains stable and that holders are incentivized to use it wisely to promote the growth and development of the Dopex ecosystem.
- 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 is a token minted and distributed for any losses incurred by option LP participants. The number of tokens minted is 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.
Learn more about rDPX's token model here:
rDPX while having an unlimited supply - has mechanisms in place to prevent it from being valueless while also providing intrinsic value to the token.
rDPX token utility is being revamped with a v2 system upgrade - the proposed changes can be viewed in the $rDPX v2 System Specification document.
For the redacted version:
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.
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.
rDPX can be used as collateral to mint synthetic derivatives of cryptocurrencies, stocks, ETFs, currencies, commodities etc. which can then be deposited into products such as option vaults to speculate on price actions.
Synthetic derivatives offer exposure to traditional markets besides crypto and give rDPX tokens intrinsic value. All derivatives minted would need to be over-collateralized. This would mean that for all the value generated through derivatives, the rDPX token would require a minimum market capitalization to fund these derivatives fully.
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.
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.