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SuperUMAns #13: AP Wine Tokenomics and UMA tools that may help
The SuperUMAns are in a quest to enhance DAOs activity and improve the way they reward the active community. This quest involves to present, highlight and educate the other communities about UMA tools and how their integration can bring value to every DAO.
It's no secret that I spend more time withy the superUMAns thann with others because there I feel like home. I wake up and check the updates and chats from the super-uman-lair on Discord and then I move on to my daily routine.
I was constantly networking to see how UMA tools can be implemented to other projects. I made some simulations to see how and what tool will be the most suited for some of my favorite projects. This is how I came with this APWine Finance analysis, as their tokenomics are so versatile that KPI, Range Token or Success Token could be easily applied.
APWine Finance DeFi protocol was created to trade future yields, which allows users to deposit interest bearing tokens from other protocols for a set period of time and trade the returns in advance. The trading of unrealized yield will help users to speculate the evolution of yield and hedge the risk on passive revenue.
I came across APWine when they organized the DeFi Meme Decathlon and involved the top DeFi projects into the competition. The phase one victors where announced and I won the 3rd place for Babylon Finance and the 3rd place for Archer. I received 122 APW tokens, 50 USDC and 50 Archer DAO from the projects and decided to hold.
The AP Wine Meme Final Battle involved 10 projects and a tougher competition than Phase 1. I had one entry for each project and after one month of voting the results were announced. I won three prizes: 3rd place in the Fuji Finance category, 2nd place for BarnBridge and 2nd place for Matic- Polygon.
All prizes were sent and I thanks to the AP Wine Meme Decathlon I now have a big bag of APWine Tokens ($APW) and I am interested in the evolution and success of the project. Because UMA tools are well known for their contribution towards progress and success, I decided to do an amateur's analysis on which tool will suit AP Wine better. Please not that this is not an official analysis, just something I done for the sake of the experiment and because I had some spare time.
The APW tokenomics are different than the majority of DAO native tokens as the token will follow a Curve-like form of voting escrow (veAPW) with lockcapability and locking APW tokens will yield an increased voting weight and share of protocol rewards. Longer locking period will lead to more voting power. The APW token has maximum supply of 50,000,000 with both utility and stake in the performance of the protocol.
Token holders will benefit from the 5% performance fee collected from all yield that is deposited and futurized on the platform. The fee can be modified through DAO proposals, with the consensus of token holders. Another unique selling point is the redistribution of 0.05% of trading volume to APW holders.
Due to the liquidity mining following an inverse exponential curve, the APW maximum supply will never be effectively reached. The 2 years vesting period will reach 65.2% of the supply, giving APW scarcity and enhanced value. Approximately 48% is planned to be minted and distributed through a liquidity mining program on $APW pairs, along with incentives for liquidity providers on the APWine AMM.
As a measure to avoid speculations, the team and all investors who have contributed to the project in its early days, have a vesting over multiple years as a commitment to the platform and its vision. The team (28.06% of the total supply) has a 4 years linear vesting schedule, while the investors (8.94% of the total supply) are following a 2 years linear vesting.
UMA tools adapted to APW The Key Performance Indicators (KPI options) are synthetic tokens that will pay out the holder a different amount of locked value, at a set deadline. The amount that can be redeemed for each KPI option is defined by set metrics if the desired indicator is achieved. For APW there are to indicators that may be followed, both related to APW token rewards.
How to avoid a massive sale of Liquidity Mining rewards: As APW Token holders already benefit from 5% performance fee collected from all yield and the redistribution of 0.05% of trading volume, the KPI option could focus on the reinvestment of Liquidity Mining rewards. The TVL could be a clear indicator as the set metrics could be easily measured. If part of the reward is distributed as KPI than the idea of receiving a higher reward on a set date will create enough positivity around reinvesting instead of selling. See UMA's uTVL KPI Option
How to make holders stake the APW tokens: The KPI is created by setting the collateral type and the asset that will be distributed to KPI holders after the deadline. At the end of the period, the reward will be unlocked at a value related to the success indicators. If the KPI option metrics are set on the amount of APW tokens staked, and the redeemable value is bigger with every step of agreed staked APW, than staking tokens will offer triple reward.
The Range Token is a convertible debt, similar to when companies are receiving funds without issuing equity upfront. This synthetic asset will enables DAOs to use the native token as collateral to borrow funds and at maturity it is paid back or if not, the range token holder is compensated with the equivalent amount of the collateral. Implemented to APW, the Range Token will set a minim number of tokens, regardless of how much the price will raise. This option will boost APW treasury and no tokens must be sold to obtain the funding. APW DAO can use the Range Tokens to expand the project and achieve the RoadMap key points.
The Success Token is created from the exposure to 1 token of collateral plus an imbedded call option. With this option, AWP tokens will be sold at the current price with no discount for the investor. The investor will look into long term holding as the extra profit only if the project grows and becomes successful. The Success Token is the right tool for new and innovative projects to attract investors and to create the premises for success.
KPI Options = The best option
Success Token may bring interest for APW tokens and will give visibility to the project, however, APWine offers something different and a fresh idea into the market. The project ticks all the boxes required for success and in this case the Success Token will be a guaranteed gem for investors.
Range Tokens will bring funding into the APW Treasury. The APW token staking may or may not be affected by the Range tokens which leads to the idea that KPI options are the best tools that can be implemented by the DAO.
If the KPI metrics are set to TVL, than the step by step growth in locked value will bring higher rewards for holders. If the success indicators are set for amount of APW tokens staked, than those staking the tokens and receiving the KPI option have extra interest to reinvest the gains. As I mentioned above, token holders that are staking APW tokens will benefit from a triple reward: the growth in value for their tokens, a higher reward from the KPI option and the APW staking rewards.
How to join UMA and the superUMAns?
The SuperUMAns are the community’s ninja troops. SuperUMAns are the people who bring the community to life. All you have to do to become a superUMAn is show up on Discord in the superUMAn lair. Whatever your talents are, we can put them to good use!
The superUMAns are an indispensable component of the machine that helps UMA reach the greater DeFi community. SuperUMAns are writing articles, making videos, funny content, design swag, hold community calls, are looking for collaboration opportunities, help teaching people about UMA, support other communities, etc!