Come for Incentives, Stay for Governance: Introducing BonDAO
Greetings Medium community, today I want to introduce you to an innovative scheme of governance of DeFi protocols: BonDAO. BonDAO is the governance principle of Spartan Protocol which is built on the Binance Smart Chain to create fair liquidity pools for asset exchange and synthetic asset generation. Apart from the other examples, BonDAO participants don’t have to hold Spartan Protocol’s native token SPARTA.
What is Spartan Protocol, briefly?
Spartan Protocol is the new generation DeFi platform to bootstrap the liquidity of Binance Smart Chain assets with a one-sided asset settlement method. With this method, Spartans try to prevent themselves from being liquidated because of lacking liquidity and price manipulations.
It became ordinary for most of us to face another set of liquidation events on MakerDAO just because of that reason. In addition to that, the basic algorithm cerated by Spartans for AMM/Automated Market Manager is not directly based on a fixed-rate fee model. It utilizes a liquidity-sensitive fee model to prevent the users from unexpected capital inefficiencies and possible huge impermanent loss of funds.
After basic information about Spartan Protocol, let’s see the basics of DAO and what makes BonDAO unique. Go on reading…
Understanding the Governance Method of Community-Driven Projects: DAO
DAO stands for the abbreviation of ‘Decentralized Autonomous Organization’. In simple words, it means that there is no constant leader in that project, there is no CEO! All the necessary works are done by community members based on their willingness. So, the protocol becomes ‘autonomous’ which furtherly means that every staff is done by different members.
We can’t say that there’s nobody to work for DeFi platforms. Of course, there are some people to work for it. But there is no paid job, here. In addition to that, we don’t know these guys and most probably will never meet them. So that they are ‘decentralized’. To read more about what DAO is, how to utilize it, and many more, please check my previous post published on Publish0x here.
The two paragraphs above are the explanation of what DAO stands for. If we analyze some DAOs, it’s inevitable to see some common features. The first of them is holding some native tokens to contribute to the ongoing process. While we’re trying to end the provision of the whales, it doesn’t seem to be fair! Secondly, even if you are a holder, it sometimes may be hard to follow the ongoing advance. You must follow every kind of social media accounts so you must have and manage successfully all of them. It creates another type of stuff to be done every single day. So that there are still more steps to complete the actual meaning of DAOs.
The project is galvanized by communities of former Binance Chain projects. The project begins decentralised from day 0; there is no official team and no treasury.
Apart from all of the negative features of common DAOs, Spartans created their platform in order to reach the maximum percentage of users (not holders). Please go on reading to understand what is BonDAO, the native DAO for Spartan Protocol users…
What is BonDAO? What Makes It Different?
BonDAO is the name of Spartans’ DAO for now (when the time comes, the name will be SpartanDAO). The Spartan Protocol users can utilize BonDAO to list new assets on Spartan Protocol, to delist the older ones, or to change the allocation of current pools. To contribute to the DAO proposals, users don’t have to hold any amount of native SPARTA. On the other hand, users must take part in any of the listed pools currently. So it means that you must stake the LP tokens anyway.
There are more than 10 listed pools, already. Every one of them has 3 distinct features themselves. The liquidity pool is shown as JOIN on the Spartan Protocol DApp. If you want to swap your tokens, it is written as SWAP which you can obtain or redeem any kind of asset listed at that pool. Finally, the BOND button allows anyone to bond some BNB to acquire LP tokens. If you want to take part in BonDAO, you should have LP tokens on any pair.
Normally, on any kind of AMM protocol, you should have both assets you want to add liquidity. For Spartan Protocol, this is no longer a requirement. It means that if you have only BNB, you can still take part in the LP pool, acquire LP tokens, and also take part in the project’s roadmap. Please follow the instructions on the Spartan Protocol’s Medium page to see how you can add one-sided liquidity here.
After you add liquidity, you’re given LP tokens that represents your share in the corresponding pool. Ordinarily, you’re given 100% of all LP tokens at once. But for the Spartan Protocol itself, the LP tokens are not given at once. LP tokens are released in a 12-month vesting period (valid for BOND method). With this method, users are protected from unexpected loss of income and they become real believers of the Spartan Protocol because they must hold the position for at least 12 months.
There are 5 active proposals on the Spartan BonDAO at the moment. Four of them are about for adding new assets to pools and the remaining is related to increasing the proportion of bond-mint incentives by 2,500,000 SPARTA tokens. Please reach to the Spartan Protocol’s Telegram group to discuss the ongoing proposals and talk about your ideas.
*This article is created to spread the awareness of Spartan Protocol, BonDAO, and Binance Smart Chain with utilizing personal experiences, Spartan Protocol Medium page, website, and WhitePaper. None of the words above contain any kind of investment advice! Please DYOR (Do Your Own Research) before investing.*
