SCP-TBD Partnership With Resonate, a Revest Finance Protocol
Jun 7, 2022

‘I don’t believe NFTs are all about art. NFTs are, among other things, FINANCIAL INSTRUMENTS, and they should be used as such.’

Summary -
As of 6/4/2022, there is a little over 130,000,000 FOX ($16 million USD) sitting in the ShapeShift treasury all but collecting dust. This proposal would redeploy those tokens in a way that would benefit the DAO.
Here’s an example of one possible use:
“Ashley has 10,000 $FOX, and they will have 15,000 $FOX in one year of staking.
“Ashley utilizes the Resonate protocol and separates their principal stake (10,000 $FOX) from her interest (5,000 $FOX, (in one year.))
“The ShapeShift Treasury purchases the rights to the interest of 5,000 $FOX, (in one year) for 3,000 FOX, upfront.
“Ashley, understanding the time/value of money, gets an upfront, one-time payment of 3,000 FOX. (Every lotto winner and/or anyone who receives a pension is given a choice: an annuity paid out over the next 30 years, or a one-time, lump-sum payment. For example: With an annuity, you would receive a total payout of $200MM but with a lump sum you would receive $120MM. By accepting a lump sum payment you gain control over your income assets; even if the lump sum is less than the promised annuity payment.) Ashley would also retain the rights to their principal stake of 10,000 $FOX.
“ShapeShift is able to extend the staking APR bonus of 52.73% (as of midnight 6/5/2022) and, at the same time, reduce the emissions from the treasury by 40%.
“ShapeShift succeeds in locking up $FOX tokens for 12 months, removing them from the primary market, (which utilizes DEX’s,) and forcing them to be sold on the secondary market.
“Ashley sells the principal FNFT (10,000 $FOX) on a secondary market like OpenSea for ETH (equivalent to 9,000 $FOX,) ending with a net profit of $2,000 $FOX (or USD equivalent,) all while not affecting the price of $FOX.
(Ashley produces two FNFTs using the RESONATE dApp; one containing the principal and the other containing the rights to the interest:
a.) They deposit 10,000 $FOX into the ‘principal’ FNFT.
b.) They sell the rights to the ‘interest’ FNFT for 3,000 $FOX utilizing the RESONATE dApp.
c.) They sell the ‘principal’ FNFT on OpenSea for the ETH equivalent of 9,000 $FOX.
ShapeShift buys the rights to the interest of 5,000 $FOX for an upfront payment of 3,000 $FOX saving a total of 2,000 $FOX in interest payouts, slowing emissions. ShapeShift was also able to lock a total of 10,000 $FOX for 12 months, reducing the total circulating supply of FOX, and increasing the price.
Result:
Ashley: 9,000 $FOX + 3,000 $FOX = 12,000 $FOX gross profit.
ShapeShift: (50,000 $FOX) - (30,000 $FOX) = 20,000 $FOX saved.
In this example, we saw Ashley stake 10,000 $FOX for 12 months earning a 50% APR. They took a 60% buyout and then sold their principal FNFT on a secondary market. But the best part about RESONATE, my favorite part, is that we will not be restricted to a certain time frame, the amount staked, or even the amount for which we sell the interest-bearing FNFT.
Abstract (A summary in detail) -

Definitions
FNFT - Financial Non-Fungible Token
Voucher Decoupling - the separation of a stake’s periodic interest payments from its principal repayment obligation to create a series of individual FNFT’s. With Voucher Decoupling, the underlying stake becomes a principal-bearing FNFT and each interest payment can be claimed through the interest-bearing FNFT at any time.
Principal FNFT - This is the FNFT where the original sum of tokens staked is held.
Interest FNFT - This is the FNFT where the interest from the principal FNFT will be sent. You are able to withdraw the interest accrued at any time.
Fixed-Term - This is a type of voucher decoupling where the interest FNFT is locked for a certain length of time no matter how much interest accrues. i.e. 12 month vest, whether the APR is 75% or 2%.
and scene - You and I decide to go on a train vacation through the alps. The vacation is 7 days long, we expected to eat 21 meals while on vacation but lucky for us they had an abundance of food and we were able to eat much more.
Result - The trip took 7 days as expected but you were able to eat 33 meals. Your only requirement to be happy was a 7 day trip, you were happy.
and scene - The next time we traveled to Switzerland we took the exact same vacation.
Result - This time the trip again took 7 days, which made you happy but we were so busy you only got to eat 13 meals. You didn’t care about the food, just the length, so you were happy.
Fixed-Income - This type of Voucher decoupling is one where the interest FNFT is locked until a specific sum of money is paid out. I.e. As soon as 5,000 $FOX tokens are paid, the vest is concluded, so it might be 9 months or it might be 14 months.
and scene - A year passes and we decide to collect 3 jars of sand from 2 different beaches, you don’t care how long we’re at each beach, you just want to collect 3 jars of sand and then leave. The first is from Tokoriki. Since that place is garbage we collect the sand in 3 days and hop on the first flight to Malta.
Result - The trip to Fiji took 3 days and you collected 3 jars of sand.
and scene - Malta isn’t a pile of garbage so we stay for 11 days.
Result - The trip to Malta took 11 days and you collected 3 jars of sand.
Concept art of our eventual UI/UX:
[Album] imgur.com
NET EFFECT OF USING RESONATE VOUCHER DECOUPLING -
1.) The price of $FOX increases because the total amount of $FOX on the primary market decreases.
2.) The treasury emissions decrease by up to 40%, allowing the promotional APR to continue for a longer period of time.
3.) Stakers are able to sell not only the interest but also their principal, on a secondary market, not affecting the price of $FOX at all; all while removing themselves from the position they would otherwise have been forced to stay in for 12 months in total.
Drawbacks- As a protocol, shapeshift has the possibility to lose money if the interest rates drop because it’s paying money out upfront, though this can be prevented by using a ‘Fixed Income’ approach.
Vote -
FOR - A partnership with Revest Finance to utilize Resonate
AGAINST - No partnership

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AdamHasan
AdamHasanJun 10, 2022

Anytime, let me know if you’ve got any questions.

Giantkin
GiantkinJun 8, 2022

Def an interesting discussion. Thanks for joining!

AdamHasan
AdamHasanJun 7, 2022

Hey bud, thanks for the response. We’re on the docket for the tokenomics AMA this evening at 4pm MST.

PTT
PTTJun 7, 2022

Hi, before I can make a vote on this, can you set up an AMA with the DAO community discord and answer some questions in that form. This is the first I’ve heard of you, and I think its worth the time spent in an AMA. ShapeShift link is good for a little while in case anyone in the future reads this. Reach out to the @modsquad once there to get a meeting/partnership thread set up.

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