Abstract: As the world’s leading accelerator, DeepGo has created a new generation of protocol that sustains project liquidity growth and connects project suppliers and asset demanders. In the platform, there are three main roles, namely Initial Provider, Great Participant, and Limit Participant. The economic model of DeepGo token will be updated continuously so as to better stimulate user growth.
1. Main functions
DeepGo token embodies both utility and governance functions.
• Holders have access to asset management infrastructure on the platform.
• Holders enjoy quotas to stagging outstanding strategies.
• Holders could vote on new strategic projects and could propose for upgrading parameters of community protocol.
2. DeepGo token distribution and unlocking
The total amount of DeepGo token is 100 million and its token symbol is DGT. The distribution ratio of tokens is as follows.
• Community mining: 50%, which is 50 million DGT in total. This 50% could be further divided, among which 40% would be distributed in the first 4 years, and the remaining 10% would be used as long-term incentives. Details as below:
- 15% of the total tokens would be distributed in the first year, 10% in the second year, 10% in the third year, and 5% in the fourth year. As a means of long-term incentive, the other 10% would be distributed in the fifth year and beyond.
- Distribution method: performance mining (20% of total tokens), NudgePool mining (10% of total tokens), transaction aggregation rebate (10% of total tokens), and smart contract Staking (10% of total tokens)
• DeepGo team: 25%, will be locked up in the first 2 years and will be unlocked in the next 3 years.
• Ecological incentives: 10%, which is 10 million DGT in total. Every year 2% will be issued, and the distribution will last for 5 years.
• Institutional investors from seed round: 2%. There has been an 18-month lock-up period starting from October 2020 and would be unlocked linearly in the next 6 months.
• Institutional investors from the strategic round: 3%. A 12-month lock-up period would be started from March 2021 and would be unlocked linearly in the next 6 months.
• Directional institut0ional investors: 6%. This sum would be locked for 1 month after the initial liquidity is released, and would be unlocked linearly for 12 months afterward.
• Initial liquidity offering: 4%. This amount would be used for DEX and centralized exchanges to provide initial liquidity (DGT-USDT). The initial price is 0.8 USDT.
As a community-based open finance platform, DeepGo would generate most of its protocol tokens from mining and would distribute these to community participants who maintain the system operation. Community mining accounts for 50% of the total supply, of which performance mining accounts for 20%, NudgePool mining accounts for 10%, transaction aggregation rebates account for 10%, and smart contract Staking accounts for 10%.
Developers are the most important participants in DeepGo ecosystem and are responsible for building various infrastructures. The official DeepGo team is responsible for the development and maintenance of the DeepGo platform and will receive a total of 25% of DeepGo tokens within five years. These tokens are locked in the first 2 years, and then 10% will be unlocked in the third year, 10% in the fourth year, and 5% in the fifth year.
Community developers, investment managers, and other members who have provided services and peripheral products for DeepGo, will be entitled to a total of 10% of DeepGo tokens within four years. Some tokens would be used for community warm-up auctions, early airdrops, and incentives for community members who participate in early tests.
The DeepGo reserves 11% of its tokens to attract institutional investors from seed round, strategic round, and directional round. Determined to become a killer platform in the cryptocurrency industry, DeepGo prioritizes institutions that uphold long-term investment.
During the first year, 4% of DGT will be traded on decentralized trading platforms (eg. Uniswap) and our cooperative first-tier exchanges so as to provide initial liquidity for DGT.
3. Token unlocking regulation
Most of DGT will be unlocked within five years after launching, afterward, long-term incentives would be provided. Specific milestones are as follows:
- 27% in circulation in the first year:
Mining 15% + Directional Institutional Investors 6% + Initial Liquidity 4% + Ecological Incentive 2%
- 44% in circulation in the second year:
Accumulated 27% + Mining 10% + Seed Round Institutional Investors 2% + Strategic Institutional Investors 3% + Ecological Incentive 2%
- 66% in circulation in the third year:
Accumulated 44% + Mining 10% + Ecological Incentive 2% + Team 10%
- 83% in circulation in the fourth year:
Accumulated 66% + Mining 5% + Ecological Incentive 2% + Team 10%
- 90+% in circulation in the fifth year:
Accumulated 83% + Ecological Incentive 2% + Team 5% + Long-term Mining Incentive (proportion undetermined)
4. Value Capture
According to the token model mentioned above, 50% of DeepGo tokens will be allocated to ‘miners’ who participated in community mining. Miners in the NudgePool include Initial Provider, Great Participant, and Limit Participant. Developers of DeepGo introduced “CDO” (Collateralized DEX Obligation) in the blockchain industry so that Initial Providers pledge their project token to make price for Great Participants’ risk, while Great Participants use their principal to guarantee Limit Participants’ principal. Through risk-balanced tranche mining, more high-quality projects will thrive. Thus, outstanding assets would be filtered for investors.
DGT is a utility token. DGT holders are entitled to the following rights:
• Using asset management infrastructure
• Getting DeepGo membership rewards
• Participating in the CDO strategy making and subscribing shares on DeepGo platform
• Strategy purchasing and fee discount redeeming
DGT is also a governance token with multi-functions. Its holders are entitled to the following rights:
• Participating in protocol upgrade proposals of the platform’s tranche mining model and performance mining model. These proposals include modifying strategic redeeming fees, strategic dividend proportion, loan-to-value ratio, leverage ratio, etc.
5. Usage scenarios
• Payment medium: DGT should be used for purchasing and redeeming.
• Share purchase: The purchase quotas of Great Participants and Limit Participants are in accordance with the number of tokens they locked on the platform. The more one lock, the more shares of outstanding assets could one hit. The share of Great Participants and Limit Participants follow the function S=D×I1/2, where D is DGT locked and I is the investment.
6. Gaming Security
DeepGo platform employs a risk tranche mechanism to secure gaming safety, namely, Initial Provider drives Great Participant to screen high-quality assets by setting pledge rate, while Great Participant drives Limit Participant to leverage through market signal regulation.
The platform uses the leverage ratio to regulate the benign growth of capital. Everyone could decide to invest or withdraw based on the current leverage ratio. Meanwhile, as the price of the project’s tokens escalates, the risk of its slumping would increase accordingly. In this case, the platform will gradually reduce the leverage for Initial Providers to minimize their risk of closing out.
mt=M/max(GP , M/e0*m0*((et /e0 )1/2+α(et /e0 ))) *et
M is the total token amount impawned by Initial Provider
GP is the total asset amount of Great Participant
mt is the dynamic impawn ratio of Initial Provider
m0 is the initial impawn rate set by Initial Provider
e0 is the initial exchange rate: 1 denomination asset= e0Token
et is the exchange rate at moment t: 1 denomination asset= etToken
α is a platform parameter that could be adjusted through community governance
The leverage between Great Participant and Limit Participant is mainly regulated by the reserve set aside by Initial Provider:
Lt is the dynamic leverage ratio of Great Participant
f(Rr) is the retained ratio of subscription fees of Initial Provider
f(Tr) is the turnover rate of Great Participant
k is the subscription fee rate of Great Participant
Equipped with a risk tranche mechanism and based on the dynamic game of the free market, the platform can ensure that the leverage is reasonably manageable for all parties. The dynamic changes in leverage will assess liquidity risk comprehensively and act as feedback signals to market participants.
DeepGo token is a key element in encouraging participants to make joint efforts in building DeepGo ecosystem. Playing the role of lubricant and moat of the platform, the token makes the operation mechanism more efficient and healthy while increases migration costs of users. When the platform enjoys a first-mover advantage, it can effectively hinder the homogenous competition from late movers.
Introduced by DeepGo, the CDO model combines the advantages of IDO and DAO to create a new possibility for optimum curation through market regulation mechanisms. Leading an agglomeration effect in the industry, DeepGo possesses a high strategic dimension and upbeat future scalability. In addition, DeepGo would create great value for the Crypto-asset market, would maximize the value of the platform, and would stimulate user growth continuously.