VNTR is the first decentralized investment protocol available on Arbitrum. Each VNTR token is backed by a basket of assets (e.g. ETH, USDC, VNTR-USDC LP) in the VNTR treasury, giving it an intrinsic value that it cannot fall below. VNTR also introduces unique economic and game-theoretic dynamics into the market through staking and bonding. Growing the treasury so as to be able to increase dividend payouts to stakers is a key part of VNTR’s long-term strategy, so VNTR is essentialy a kind of crypto hedge fund. The only way new VNTR can be minted currently is through bonding. Bonds are controlled by algorithms which incentivize or disincentivize bonding in the best interests of the treasury and, by extension, the project’s stakers.
What is the point of VNTR?
Our goal is to build a decentralized venture capital DAO with a focus on community-based treasury management, in which the behavior of the VNTR token is controlled at a high level by the DAO. In the long term, we believe this system can be used to optimize for stability and consistency so that VNTR can function as a decentralized investment firm. In the short term, we intend to optimize the system for growth and wealth creation.
How do I participate in VNTR?
There are two main strategies for market participants: staking and bonding. Stakers stake their VNTR tokens in return for more VNTR tokens, while bonders provide LP or USDC tokens in exchange for discounted VNTR tokens after a fixed vesting period.
We hear you! Take part in our protocol through the DAO. Governance participants can get involved on our community telegram or discord.
How can I benefit from VNTR?
The main benefit for stakers comes from dividends paid out in our interest-bearing treasury token VNTR, though price exposure remains an important consideration.
The main benefit for bonders comes from price consistency. Bonders commit a capital upfront and are promised a fixed return at a set point in time; that return is in VNTR tokens and thus the bonder’s profit would depend on VNTR price when the bond (minted VNTR) matures. Bonders benefit from a rising or static price for the VNTR token!
Who runs VNTR?
No one. VNTR is DAO-governed. All decisions are formed by community members on the forum and made by token holders through snapshot voting.
Is VNTR a stable coin?
No, VNTR is not a stable coin. Rather, VNTR aspires to become an algorithmic reserve currency backed by other decentralized assets. Similar to the idea of the gold standard, VNTR provides free floating value its users can always fall back on, simply because of the fractional treasury reserves VNTR draws its intrinsic value from.
VNTR is backed, not pegged.
Each VNTR is backed by 1 USDC, not pegged to it. Because the treasury backs every VNTR with at least 1 USDC, the protocol would buy back and burn VNTR when it trades below 1 USDC. This has the effect of pushing VNTR price back up to 1 USDC. VNTR could always trade above 1 USDC because there is no upper limit imposed by the protocol. (Pegged means it would be == 1. Backed means than it would be at least 1 or >= 1)
You might say that the VNTR floor price or intrinsic value is 1 USDC. We believe that the actual price will always be 1 USDC + premium, but in the end that is up to the market to decide.
How does it work?
At a high level, VNTR DAO consists of its protocol managed treasury, protocol owned liquidity, bond mechanism (bonding), and high staking rewards that are designed to control supply expansion.
Bond sales generate profit for the protocol, and the treasury uses the profit to mint VNTR and distribute them to stakers. With liquidity bonds (LP Bonds), the protocol is able to accumulate its own liquidity to ensure stability.
What is the deal with (3,3) and (1,1)?
(3,3) is the idea that, if everyone cooperated in VNTR DAO, it would generate the greatest gain for everyone (from a game theory standpoint). Currently, there are three actions a user can take:
- ● Staking (+2)
- ● Bonding (+1)
- ● Selling (-2)
Staking and bonding are considered beneficial to the protocol, while selling is considered detrimental. Staking and selling will also cause a price move, while bonding does not (we consider buying VNTR from the market as a prerequisite of staking, thus causing a price move). If both actions are beneficial, the actor who moves price also gets half of the benefit (+1). If both actions are contradictory, the bad actor who moves price gets half of the benefit (+1), while the good actor who moves price gets half of the downside (-1). If both actions are detrimental, which implies both actors are selling, they both get half of the downside (-1).
● If we both stake (3,3), it is the best thing for both of us and the protocol (3+3=6).
● If one of us stakes and the other one bonds, it is also great because staking takes VNTR off the market and put it into the protocol, while bonding provides liquidity and USDC forthe treasury (3 + 1 = 4).
● When one of us sells, it diminishes the effort of the other one who stakes or bonds (1–1= 0).
● When we both sell, it creates the worst outcome for both of us and the protocol (-3–3 =-6).
Why is PCV important?
- As the protocol controls the funds in its treasury, VNTR can only be minted or burned by the protocol. This also guarantees that the protocol can always back 1 VNTR with 1 USDC. You can easily define the risk of your investment because you can be confident that the protocol will indefinitely buy VNTR below 1 USDC with the treasury assets until no one is left to sell. You can’t trust the FED but you can trust the code.
- As the protocol accumulates more PCV (Protocol Controlled Value), more runway is guaranteed for the stakers. This means the stakers can be confident that the current staking APY can be sustained for a longer term because more funds are available in the treasury.
Why is the market price of VNTR so volatile?
It is extremely important to understand how early in development the VNTRDAO protocol is. A large amount of discussion has centered around the current price and expected a stable value moving forward. The reality is that these characteristics are not yet determined. VNTR could trade at a very high price because the market is ready to pay a hefty premium to capture a percentage of the current market capitalization. However, the price of VNTR could also drop to a large degree if the market sentiment turns bearish. We would expect significant price volatility during our growth phase so please do your own research as to whether this project suits your goals.
What will VNTR’s intrinsic value be in the future?
There is no clear answer to this, but the intrinsic value can be determined by the treasury performance. For example, if the treasury could guarantee to back every VNTR with 100 USDC, the intrinsic value will be 100 USDC. It can also be decided by the DAO. For example, if the DAO decides to raise the price floor of VNTR, its intrinsic value will rise accordingly.
Staking What is Staking?
Staking is the primary value accrual strategy for VNTR. Stakers stake their VNTR on the Community Staking section (Staking submenu) of the VNTR DAO website to earn VNTR rewards. If you are a new holder the ‘(3,3)’ and “ (6,6)’ staking submenus have no relevance to you and can be ignored
When holders first start staking, there is a warm-up period of 5 days before they start receiving VNTR rewards. The multiplier for these rewards increases over time, so that after a month they are now being paid out at a 2x multiplier. VNTR rewards are paid out by the block second and can be claimed at any time. Note: only unstaking, as opposed to claiming, will affect your multiplier — you are free to claim at any time, but of course it will be in your own interest to wait to make your first claim after a minimum of one month of staking, so you don’t miss out on that 2x multiplier.
The calculator page of the website shows some useful data such as the current VNTR APY rate and the exchange rate of VNTR to USDC — note that VNTR is always worth more than USDC, and its value is increasing by the day!
Bonding What is bonding?
Bonding is the secondary value accrual strategy of VNTR. It allows VNTR to acquire its own liquidity and other reserve assets such as ETH by selling VNTR at a discount in exchange for these assets. The protocol quotes the bonder with terms such as the bond price, the amount of VNTR tokens entitled to the bonder, and the vesting term. The bonder can claim some of the rewards (VNTR tokens) as they vest, and at the end of the vesting term, the full amount will be claimable.
Bonding is an active, short-term strategy. The price discovery mechanism of the secondary bond market renders bond discounts more or less unpredictable. Therefore bonding is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking.
Bonding allows VNTR to accumulate its own liquidity. More Protocol-Owned Liquidity(POL) ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Since VNTR becomes its own market, on top of additional certainty for VNTR investors, the protocol accrues more and more revenue from LP rewards bolstering our treasury.
Stake Your VNTR
VNTR is staked / unstaked on the ‘Community Staking’ tab of the website. Staking allows you to earn VNTR passively via treasury payouts. By staking your VNTR with VNTR DAO, you receive a share of daily VNTR payouts to all stakers.
How to Buy VNTR?
Make sure to check the slippage first before buying VNTR.
1. Go to SushiSwap.
2. Make sure the output currency is VNTR. You can also copy and paste the VNTR contract address into the output currency field to ensure you are swapping for the right token. VNTR Token address:
0xA27aD621bDfb7997daE63D4fa395E2f1a23387de
3. You can select any input currency based on your available wallet balance. It is recommended to use USDC as the input currency to minimize the slippage.
4. Select the amount of VNTR you want to swap for. Then click “Approve” and sign the transaction.
5. After the “Approve” transaction has been processed successfully, click “Swap” and sign the transaction.
6. You should see VNTR in your wallet balance now after the swap transaction is successful. If you cannot find it in your wallet, add the VNTR contract address to your wallet.
The “Approve” transaction is only needed when you swap VNTR for the first time; subsequent swapping only requires you to perform the “Swap” transaction.
How to Stake?
- Go to the Community Staking page of the VNTRDAO website. Select the “Stake” tab.
- Enter the amount of VNTR that you would like to stake in the input field. If you would like to stake all your VNTR, press the “Max” button and the input field will be populated with all your available VNTR balance.
- Click “Approve” and sign the transaction.
- After the “Approve” transaction has been processed successfully, click “Stake” and sign the transaction. Voila, you have staked your VNTR!
Note: The “Approve” transaction is only needed when staking/unstaking for the first time; subsequent staking/unstaking only requires you to perform the “Stake” or “Unstake” transaction.
How to Unstake?
- Go to the Community Staking page of the VNTRDAO website. Select the “Unstake” tab.
- Enter the amount of VNTR that you would like to unstake in the input field. If you would like to unstake all your VNTR, press the “Max” button and the input field will be populated with all your available VNTR balance.
- Click “Approve” and sign the transaction.
- After the ”Approve” transaction has been processed successfully, click “Unstake” and sign the transaction.
- Enter the amount of VNTR that you would like to unstake in the input field. If you would like to unstake all your VNTR, press the “Max” button and the input field will be populated with all your available VNTR balance.
Note: The “Approve” transaction is only needed when staking/unstaking for the first time; subsequent staking/unstaking only requires you to perform the “Stake” or “Unstake” transaction.
Reading the Info
TVL measures the dollar amount of all the staked VNTR in VNTR DAO.
Your Balance tells you how many unstaked VNTR are in your wallet. This is the maximum amount that you can stake.
Your Staked Balance tells you how many staked VNTR are in your wallet. This is the maximum amount that you can unstake.
Purchase a Bond
Bonds allow users to buy VNTR from the protocol at a discount by trading it with i) liquidity (LP tokens) or ii) other assets. The former is called liquidity bonds and the latter reserve bonds.
Bonds take roughly 15 epochs to vest, and VNTR tokens are vested linearly to the user over that period. Liquidity bonds help the protocol to accumulate and lock liquidity, while reserve bonds allow the protocol to grow its treasury, and thus its RFV faster.
VNTR currently offers 4 types of bonds:
- USDC
- WETH
- WBTC
- VNTR-WETH LP
Reading the Info Bond Page:
Bond Price is the price of VNTR you get from bonding. You can calculate the bond price using the following formulae:
- ● LP Bond: (Value of your LP token / VNTR you’ll get from bonding)
- ● USDC Bond: (Value of your USDC token / VNTR you’ll get from bonding)
- ● ETH Bond: (Value of your ETH token / VNTR you’ll get from bonding)
Market Price is the market price of VNTR.
Your Balance is your balance of LP tokens. This is the asset used to create a bond.
You Will Get tells you how many VNTR you will get from bonding.
Max You can Buy the maximum amount of VNTR available to be bought.
Min You can Buy the minimum amount of VNTR to be bought.
ROI is the Return On Investment
Debt Ratio measures the total amount of VNTR created from bonds that have yet to be paid out by the protocol. The debt ratio is calculated differently for LP bond and USDC bond:
- ● LP Bond: (VNTR created from unredeemed bonds / VNTR total supply)
- ● USDC Bond: (VNTR created from unredeemed bonds / VNTR circulating supply) Vesting Term measures the period a bond takes to fully redeem. Approximately 5 days or 15 epochs (measured in blocks).
Redeem Page:
Pending Rewards is the amount of VNTR you are entitled to receive from bonding.
Claimable Rewards is the amount of VNTR that you can claim now. This amount keeps increasing as VNTR is vested to you over the vesting period.
Time until fully vested time until the VNTR bonded will be fully redeemable
ROI is the Return On Investment
Debt Ratio measures the total amount of VNTR created from bonds that have yet to be paid out by the protocol. The debt ratio is calculated differently for LP bond and USDC/ETH bond :
- ● LP Bond: (VNTR created from unredeemed bonds / VNTR total supply)
- ● USDC/ETH Bond: (VNTR created from unredeemed bonds / VNTR circulatingsupply)
Vesting Term measures the period a Bonding action takes to fully redeem. This number is expressed in days.
Initial Network State
Our initial goal is not to find a stable price. VNTR DAO can be tuned to optimize for different things. The main trade off is volatility and profitability versus stability and consistency. With volatility and profit comes growth; this is what we want early on.
With tight policy and scale, VNTR should function well as a stable asset. Upward and downward pressures should stabilize at some non-intrinsic value. With loose policy, regardless of scale, VNTR has the potential to act as a wealth creation machine. The market premium of the token measures the positive sum of the game; all extrinsic value is new wealth created.
Alpha State*
The initial network features a one-way treasury (money goes in, none comes out), the bonding contract (through which supply increases and profits are produced), and the staking contract (where profits are distributed).
The following are the initial policy states:
● BCV — BCV varies based on bond types. It is tuned regularly by the Policy team to meet the protocol goals. For example, if the protocol wants to accumulate more liquidity into its treasury, it can lower the BCV for liquidity bonds to increase their bond capacity.
● Bond vesting term — It is set to approximately five days for all bond types.
● VNTR distribution — Every time someone purchases a bond, the proceed will go to the VNTR treasury. A corresponding amount of VNTR will be minted and distributed to three parties:
○ Bonder
○ The bond purchaser will receive the quoted amount of VNTR linearly over the vesting term.
○ DAO
○ The DAO receives the same amount of VNTR as the bonder. This represents the DAO profit.
Policy
VNTR features policy constants that allow us to optimize the system.
- Bonds
The BCV allows us to scale the rate at which bond premiums increase. A higher BCV means a lower discount for bonders and more protocol profit. A lower BCV means a higher discount for bonders and less protocol profit. - The vesting term determines how long it takes for bonds to become fully redeemable. A longer term means lower inflation and lower bond demand.
Treasury
Profit Allocations are the only treasury variable. This allows us to choose who receives profits from the protocol.
Market Dynamics
There are several feedback mechanisms within the system. These are self-reinforcing behaviors; action 1 increases the rate of action 2 which increases the rate of action 1. Circular mechanics like this are the drivers of exponential expansion and boom and bust cycles. Loose policy states enable these dynamics while tight policy states suppress them.
Player Goals
Stakers care primarily about their VNTR balance
Bonders care primarily about VNTR price. When they bond, these users lock in a fixed reward in VNTR. Therefore, network profitability is only helpful in calculating opportunity cost or gain; bonders have their VNTR gains locked in.
The ideal scenario for a bonder is for price to go up; in this case, the bonder benefits from their discount on VNTR and the increase in price.
Bonders are still happy if the price remains flat; their profit is the discount from the bond. Like stakers, bonders profit from inactivity at or around their buy in via an increasing balance.
Bonders only lose when price goes down beyond the discount on the bond. At this point, the bonder will choose between the VNTR or the LP tokens, depending on which one is worth more. Bonders always get to choose the better of the two assets, effectively combining the best pieces of both assets’ risk to reward profiles.
Market Dynamics
The default state of the network is at intrinsic value. After some long period of inactivity, price will always return to this level.
Contractions are conceivably only triggered by short-term liquidity crises. Since VNTR holders have a guarantee that price will come back above intrinsic value eventually, the only sellers below should be those who need a short term exit and are willing to take the extra loss.
Expansions can be triggered by an increase in bonding, as well as making the protocol attractive to investors through generous treasury dividends.
Rising prices increase the bond discount and creates capacity for new bonds. These are preceded by new liquidity, which improves the protocol’s ability to carry out sales and increases available exit liquidity.
This positive price-liquidity feedback loop should serve to create sustainable to expansionary periods. However, they work both ways. Falling demand decreases staking rewards and bond capacity, causing demand to fall further. This is an unavoidable fact of sysVNTR’s like this; even the best (i.e. Bitcoin) are no stranger to significant declines after periods of expansion.
But we can work to mitigate busts. This is where the protocol’s reserves step in and to catch the market when velocity turns too far to the downside. It does so through forward guidance (the fact that the protocol will buy lowers risk the lower we go, which can mean we don’t have to buy) and by buying perpetually below intrinsic value. The treasury ensures that, although bear markets and contractions can and will occur, the protocol can never die.
Glossary
Vocabulary
APR
Annual Percentage Rate, is the annualized interest rate without taking the effect of compounding into account.
APY
Annual Percentage Yield, is the normalized representation of an interest rate, based on a compounding period over one year. Note that APYs provided are rather ballpark level indicators and not so much a precise future result.
BCV
Bond Control Variable, is the scaling factor at which bond prices change. A higher BCV means a lower discount for bonders and higher inflation by the protocol. A lower BCV means a higher discount for bonders and lower inflation by the protocol.
DAO
Decentralized Autonomous Organization, is a governance mechanism for making decisions in a more trustless and collaborative way. Voting rights are often bound to a governance token. In VNTR DAO the governance token is wsVNTR.
DCV
Deflation Control Variable, is the scaling factor at which protocol defined buy pressure changes. A higher DCV means more buy pressure from the protocol, resulting in a higher deflation. A lower DCV means less buy pressure from the protocol, resulting in a lower deflation.
Liquidity Bonds
Liquidity bonds are LP token bonds. Examples are VNTR-USDC LP bonds.
PCV
Protocol Controlled Value, is the amount of funds the treasury owns and controls. The more PCV the better for the protocol and its users.
POL
Protocol Owned Liquidity, is the amount of LP the treasury owns and controls. The more POL the better for the protocol and its users.
PoR
Proof of Reserve, is the mechanism of strengthening the reserve of VNTRDAO treasury via the sales of bonds. Bonders provide liquidity to the treasury, thereby building its reserve. In return for their service, bonders get paid in VNTR.
Reserve Bonds
Reserve bonds are single asset bonds. They are sometimes referred to as “naked” bonds. Examples are USDC bonds.
Reward Rate
Reward rate is the configured percentage of VNTR distributed to all stakers on each rebase relative to the total supply. The reward rate is precisely set by the policy team.
Reward Yield
Reward yield refers to the actual amount of VNTR received by each staker on each rebase. The reward yield is a rough target from a policy point of view. It can almost never be maintained precisely due to e.g. fluctuating amounts of VNTR staked.
RFV
Risk Free Value, is the amount of funds the treasury guarantees to use for backing VNTR.
LP
Liquidity Provider Token, is the token received when providing liquidity on DEXs. For instance LP bonds require LP tokens of the VNTR-USDC pair.
TVL
Total Value Locked, is the dollar amount of all VNTR staked in the protocol. This metric is often used as a growth or health indicator in DeFi projects.
TaaS
Treasury as a Service, is the business model of decentralized custody of partnership funds. VNTR DAO is designed for TaaS by selling bonds and absorbing partners’ liquidity into its treasury as a result.
TWAP
Time Weighted Average Price, is the average price of an asset over a specified time. TWAPs are used to represent the fair value of an asset as defined by the market.
Stay up to date!
Website: https://vntrdao.com/
Twitter/X: https://twitter.com/VNTRdao
Telegram: https://t.me/VNTRDAO
