GTON Capital DAO Business Model

GM :fleur_de_lis:

Last December, we agreed on a roadmap that would see GTON Capital (GC) move towards more global narratives to create infrastructure for new digital capital markets. Our DAO creates infrastructure and products that offer DeFi market participants an alternative approach to onboarding, using products, hedging, and earning more on their DeFi assets.

The main aspect of our current plan is that everything we build as a DAO must bring value and monetize our activity and contribution.

In this post I’ll show the picture of how all components of GC are connected. There will be 2 parts GC 1.0 (built in Q1, already in testnet and currently under audit by external agency) and GC 2.0 (main R&D must be accomplished in Q2 and must be launched in Q2/Q3).

In this post, I will show a diagram of how all GC components are connected. It will have two parts: GC 1.0 (finished in Q1, already on testnet and is currently being audited by an external agency) and GC 2.0 (basic R&D should be completed in Q2 and should be launched in Q2/Q3).

The main idea of ​​this post is to show how everything is interconnected in GC and how different factors help GC DAO to grow the Treasury and boost the capitalization of GTON.

GC 1.0 (on Fantom Opera)

Revenue:

DAO treasury is located in the center of the scheme. There are two sources that boost Treasury holdings: OGSwap fees and bonding revenue. It seems obvious that bonding is, in fact, selling of the governance token directly from the treasury.
Selling GTON on DEXes, where the DAO holds 100% POL, also increases treasury reserves directly.

OGSwap fees: The first question is how OGSwap will get the necessary liquidity and variety of assets that will be useful to traders. The answer is:

  1. DAO will supply POL in the form of GTON with USDC/ETH/FTM and other assets to facilitate GTON trading. This is the main DEX for the Pathway protocol - an algorithmic pricing/market-making system for the governance token.

  2. GCMoney with GCD (gc dollar) as the main token. GCD is an algorithmic stablecoin pegged to $1 and collateralized by GTON, which is locked in a PMM DEX pool on OGSwap.

Other assets (synths) open up the opportunity for traders to get exposure to “classic” assets mirrored in the blockchain, such as: commodities (gold, nickel, oil, silver, wheat, etc.), indices (snp, dj, htfs, NFT index, etc.), stocks (tesla, apple, …).

There is no doubt that such products will find their PMF (product market fit). We can look at Synthetix, Neutrino and Terra as an example: https://www.coingecko.com/en/exchanges/terraswap

  1. Candy is a simple single-sided farming solution. DeFi users supply their ETH, FTM, USDC, DAI, and other assets to earn staking rewards in candyETH, candyFTM, and candyStables assets. Candy is the main source of “rented liquidity”.

As you can see, GCMoney and Candy raise the TVL of OGSwap and the fees (~0.03%) go to the GC DAO treasury.

Capitalization:

If the DAO generates more revenue, GTON should have a larger capitalization. This is a classic approach to evaluating stock. GC DAO uses an automated approach to managing gton evaluation - Pathway. This is a model that references valuation factors such as: reserves, revenue, growth, users, % staked gton, rented liquidity, fees.

Valuation(gton) = a1f1 + a2f2 + … + an*fn

where ai - is the importance of factor fi.

The formula must be chosen by GTON holders (DAO voting). The Pathway configuration can be updated using the PW migration process. PW1 → PW2 can’t happen right away, there is a smoothing factor that increases alpha with each block until it reaches 1.

PW(1->2) = (1 - alpha)PW1 = alphaPW2

As you can see, any parameter /kpi/traction that the dao considers as the possibility of increasing the capitalization, can be included in the pw formula to improve the gton valuation model. This is the main innovation of GC DAO. We can build a fully autonomous system where MM is automated by DAO actions. It takes time and effort to build a correct model and prove its robustness through simulation, but it’s worth it.

GC 2.0 (GTON Network)

The GC1.0 architecture can be implemented on the Fantom blockchain, but we have to provide an alternative entry into GC to use our assets like GTON and GCD. Therefore, in accordance with the GC-22 roadmap, we decided to create our own blockchain (GCNet).

The main reason for this is the new opportunities to monetize the GC DAO after a massive adoption of the GTON Network. The network will generate transaction fees, bridge fees, revenue from any DeFi users. Initially, all major staking/bonding products, as well as candy, ogswap, gcmoney will be deployed on it and POL will be migrated to the gton network, but this also opens up the opportunity for any project to be deployed to GCNet and become part of the GC DAO.

#WAGMI :fleur_de_lis:

Successful implementation is critical at the moment, but I would also like to share my vision and gather feedback. DAOs are mostly associated with groups of people who invest in projects (VC-DAO) or optimize trading/holding strategies (Hedge-DAO). Will GC DAO eventually become VC-DAO, Hedge-DAO or Hybrid-DAO? I think yes! At the moment, this is also part of our vision.

Hedge-DAO operations of GC will consist of investing treasury funds in DeFi assets and putting them into Candy pools. VC-DAO operations are about supporting new projects that integrate with GC products or deploy dApps on GCNet.

The vision is clear and many parts of it have already been implemented in Q1. We are currently preparing the Q2/Q3 execution plan and will publish it as a DAO proposal. Stay tuned!

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It seems like using $GCD as a payment currency for GCNet looks pretty familiar with xDAI. However, I like this concept, it will keep governance, staking, PoS, reserve utility for GTON and it will help with GTON Capital algorithmic stable-coin use cases and liquidity.

Another question is: How are you going to implement bridges from Fantom and Ethereum into GCNet?

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Hi Alex,

thanks for sharing this vision. Very interesting!

I agree to most of the points. Just two minor things:

  1. I do not certainly agree with: “… everything we’re building MUST capitalize and monetize our activities and participation”. Maybe not yet, but at a later stage, i would love to see GTON / GTON community do some pro-bono work. Why is that? Easy, we are building our new ideas on some pretty decent ideas and technology, that is originally not from us. That could be our way to give something back to the community.

  2. Especially in the first figure, i’m missing investors (in terms of VCs). I think, from the very beginning, GTON had the idea to get some VCs on board and to do a decent funding round. Where would this money land and how would it be utilized, in the context of figure 1?

Cheers
Marc

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Thanks Marc!

Your question is actually explaining the importance of “GC1.0 → GC2.0” concept. GC1.0 is a step for establishing DeFi products and core protocols. But it’s not yet something which is ready for much bigger VC capital utilization. To show the traction with GC1.0 we have enough funds for development and bonding/pathway will help us to generate revenue to continuously increase the treasury without VC involved.
But, it has limitations with our max capitalization. So we have to raise much more funds for something which is much bigger and scaling: This is GC2.0 with it’s own Ethereum-L2 where GTON is a PoS (network/validators/oracles security) token and GCD is a payment token for the GCNet.
So, if you look at recent VC raises there are small raises (3-15 mln$) for DeFi and much bigger for L1/L2s (35-350 mln$). Why this works this way: blockchains has much bigger network effect than DeFi dApps and obvious token utility.

I means that we have to show traction in april/may with GC1.0 and launch GC2.0 to raise enough VC funds for Q3/Q4 expansion. The reason for much bigger raise is: 1. liquidity for gton, stable and synths, 2. marketing/sales/PR budget, 3. incentives for devs/teams to build with GTON Capital infrastructure (GCNet).

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