Summary
Machinist will be developed with a single goal in mind - to fund the development of new and exciting community-centric blockchain projects on the FUSE Network.
This is a rare opportunity to not only help shape the direction of the powerful FUSE network, but also to contribute to building the ecosystem at the foundation.
We will democratize access to some of the first projects to emerge in the FUSE Network landscape, giving our users a second chance to be among the early adopters and investors in a space that is likely to expand soon.
Machinist is a launchpad similar to ETHPad, backed by a decentralized reserve currency like the well-known blockchain project OlympusDAO.
The goal is not only to attract the best projects, but also to bring a new wave of innovation to the FUSE ecosystem.
It will be the first launchpad backed by a decentralized reserve currency ever build on a blockchain. Initiated by the Fuse Assembly and operated by FuseDAO.
About
The Fuse Assembly is a small group of community leaders who drive the FUSE ecosystem from the community side. The FuseDAO will be the formal structure for the Assembly to implement revenue-generating projects like Machinist.
Motivation
Currently, FuseDAO relies on donations to fund projects in the community. This is expected to change through the implementation of own projects managed by FuseDAO, such as Machinist, which should generate additional revenue to support more projects in the future. The FUSE community should be able to decide for themselves which projects they would like to invest in. New projects will be introduced regularly. Depending on the number of MAC tokens stacked in the Machinist protocol, investments can then be made in these projects.
Rationale
Machinist will be the first FuseDAO project which creates organic growth for the FuseDAO Treasury by Bond sales and LP Fees within the FUSE community. This newly generated liquidity will help the FuseDAO Treasury to control the MAC (Machinist ERC20) token supply. The inflow is used to increase Treasury Balance and back outstanding MAC tokens as well as regulate staking APY. Compounds yields automatically through a treasury backed currency with intrinsic value which we see in high staking rewards. The initial profit distribution will be: 90% to stakers and 10% to the FuseDAO Treasury.
The project is divided into two distinct phases. Phase one is the growth phase, which means that high stakes (APY) are needed to attract new people (possibly from other chains) and use this new liquidity to grow and stabilize FuseDAO Treasury. The APY is high at the beginning, but is steadily lowered in the second phase. The goal is to create a decentralized reserve currency in the long run that is not tied to a single asset like the USD. This is achieved by having enough liquidity from various assets to control its own market supply and demand, thereby creating a decentrali reserve currency that will eventually stabilize in terms of token price.
To put it in simple words:
People can buy MAC tokens (or provide liquidity) and invest these tokens in Machinist. By doing so, they help Machinist generate revenue, which in return allows Machinist to pay back high interest rates and fund new community-driven projects, creating a decentralized reserve currency in the long run.
Process in more detail:
Each MAC token is backed by 1 fUSD in the FuseDAO treasury. However, the tokens cannot be minted or burned by anyone except the protocol. The protocol does this only in response to the price. When MAC trades below 1 fUSD, the protocol buys back MAC and burns it; when MAC trades above 1 fUSD, the protocol mints new MAC and sells it. Since the Treasury must hold 1 fUSD and only 1 fUSD for each MAC, it makes a profit each time it buys or sells. Either it receives more than 1 fUSD for the sale or it spends less than 1 fUSD for the purchase.
There are basically 2 different mechanisms for people to acquire MAC tokens.
Method 1: Buy on open market
Purchase of MAC tokens on the open market via an Automated Market Maker at the current price.
Method 2: Bond in Machinist
Bond assets like FUSE, VOLT, fUSD token or liquidity token for fUSD/MAC, FUSE/MAC, VOLT/MAC and thereby purchase MAC tokens from Machinist at a reduced price (e.g. -10%) over a period of several days (e.g. 7 day vesting).
Staking
Regardless of how the user acquired his MAC token, he usually wants to hold it for a certain period of time. Machinist rebases every 8 hours, thus paying interest back to staking users in the form of newly generated MAC tokens. OHM has coined the phrase 3,3 which basically means that if everyone stakes, everyone, including each individual, as well as the protocol will win in the long run.
Meanwhile, Machinist receives fees from liquidity provided via bonds and uses this newly generated revenue to pay interest to Stakers and ensure a healthy treasury in the event of a market downturn. Additional revenue not distributed to Stakers goes directly into a Gnosis Safe (FuseDAO Treasury) and is used to grow the Fuse ecosystem from a community-centric standpoint.
Example
- Currently, 100 MAC staked, 100 sMAC outstanding
- Protocol earned $10, which will be converted to 10 MAC
- 10 MAC will be sent to the contract, which results in 110 MAC staked, 100 sMAC outstanding
- 100 sMAC will be rebased to 110 (10%), which means your sMAC will be increased by 10% too
Bonds
MAC tokens can be purchased directly from Machinist at a reduced price (e.g. -10%) over a period of several days (e.g. 7 days vesting).
The protocol will start with these 4 bonds with different ROIs to incentivise people to lend money to the protocol:
Single assets
- fUSD
- FUSE
Liquidity Token on fusefi
- fUSD/MAC LP
- FUSE/MAC LP
The protocol will provide those 2 bonds shortly after launch of the VoltDAO:
Single assets
- VOLT
Liquidity Token on fusefi
- VOLT/MAC LP
Objectives
Machinist should:
- Grow the FUSE community by getting people who don’t normally participate in launchpads or decentralized reserve currency projects excited about by integrating WalletConnect and making it mobile useable via fuse.cash
- Build a strong and growing FUSE ecosystem by funding and providing liquidity to new community-driven projects
- Allow the community to invest in early-stage blockchain projects with great potential
- Create a decentralized reserve currency (MAC) in the long term that is not tied to a single asset such as the USD by having enough liquidity of different assets to control its own market
- Incentivize new customers (potentially from other chains) to buy/bond MAC and participate through high APY to grow FuseDAO treasury
Machinist is:
- Trusted due to the fact that it is led by community leaders from FuseDAO
- Transparent, as the FuseDAO publicly votes on which projects are supported and with how much funding
- Secure, since it is a multisig system and no single person can move funds without the majority of the FuseDAO (via Gnosis Safe)
- Innovative, because it financially supports new projects on the FUSE Network to try out cutting-edge ideas
Deliverables
- Deployed smart contracts of the protocol on the Fuse Sparknet Test Network
- Deployed smart contracts of the protocol on the Fuse Main Network
- Design and launch a user-friendly fuse.cash compatible (via WalletConnect) frontend dApp that’s simple and intuitive to use (supports for Metamask as well)
- V1 (01/2022)
- Stake MAC token to accumulate gMAC (which will be used in V2 and V3)
- Bond assets to purchase MAC at a reduced price (including auto staking those bonds to accumulate gMAC automatically)
- V2 (02/2022)
- Governance to democratically decide which projects to list
- V3 (03/2022)
- Tier IDO system to invest into new projects based on staked MAC
Budget
A total budget of 200k FUSE is requested for the project. The budget is divided into liquidity pools and project setup.
1. Liquidity Pool Budget
- 90% of total budget
- 180.000 FUSE
The project needs initial liquidity to provide fUSD and FUSE pools for the MAC token on fusefi to start with an intended price per token of 1 fUSD.
- 75% of LP budget: fUSD/MAC
- To onboard new users from other chains via USDC/fUSD pair
- 25% of LP budget: FUSE/MAC
- To onboard existing users who are already holding fuse in their pockets
- To incentivise the community to lock up their fuse in the FuseDAO treasury
2. Project Setup Budget
- 10% of total budget
- 20.000 FUSE
The project needs to be implemented, deployed and operated on the Fuse Network by two developers and one external designer / animator (who did the Cozy Cosmonauts Artwork and Animations). The project setup budget will be split between those 3 people.
Contributors
Bertrand Juglas (+20 years of software development experience) and Jan Owiesniak (+10 years of software development experience) are both active contributors in the Fuse community and 2 of 5 founding members of the Fuse Assembly.
