Description

We are building a reserve-backed Public Goods Index Token which is collateralized using a pool of public goods tokens. These assets act as a means of verifiable accounting for the production of public goods, and derive value from means such as retroactive public goods funding. Through this, we aim to create a novel funding model for public goods which allows for demand for the index token to be passed into demand for the underlying assets, and therefore the production of public goods themselves. Since the only assets we allow to mint currency through bonds are public goods tokens, this gives those tokenholders the right to derive value from the expansion of the money supply to meet demand for the index. We refer to this as the public goods seigniorage model. Importantly, because it is necessary for us to define public goods and their inherent value, governance over our currency is decentralized and democratic.To ensure accuracy and sybil-resistance, we divided our governance into three layers, tokenholders, bondholders, and riskholders. Tokenholders decide the composition of the collateral pool through quadratic voting, signalling their preferences and expressing the inherent value of the underlying public goods. Bondholders decide through burn voting whether an asset qualifies as a public good, and act as gatekeepers to the collateral pool based on its acceptance criteria. Riskholder governance is used as a way to hedge risk and minimize volatility by stabilizing the index token through collateral auction dynamics similar to Maker vaults. Riskholders manage treasury collateral by moving it into vaults which mint tokens to pay down treasury debt obligations to bondholders. Vaults allow for risk characteristics to be assessed and actively managed by adjusting collateral ratios to adapt to market conditions. Riskholders are responsible for determining the accumulation schedule based upon demand from tokenholders, and act as an additional qualifying check on bondholder asset approval with the power to make limited appeals. This project is an attempt to create a functional medium of exchange encoded with a set of complex values. Each token democratically expresses individual preferences and passes value into them through the means of alternative taxation and arbitrage.

Triumph of the Commons showcase

How it's made

This project builds off of the Olympus bonding mechanism, forking that straight away. It also adds a Maker module in order to provide an auction mechanism for liquidations, and an options vault from Lyra that allows the treasury to transfer puts straight into the auction mechanism. Due to our lead front-end developer becoming ill, we had to fork Olympus' front-end as well, and simply make whatever changes we could. We were able to get WalletConnect and Coinbase Wallet integrated with Web3Modal, and I was quite proud of the changes we were able to get finished, although we were unable to finish the front-end as a whole to the point where we were comfortable presenting it, sadly. All around, I am very impressed with what we have built, I just wish we would not have lost track of time while developing the contracts.