State of the Reactor - September 23, 2022


Key Takeaways

  • Please welcome Crocodile Playing Piano to the Tokemak team! He officially joined last month, and has a background in finance, programming, and data analytics.
  • The team will update the public Github with the latest smart contract code once the proper security checks have been performed. This will vastly improve the public perception of Tokemak’s development activity.
  • The team will be improving communications as ACC and Tokemak v2 roll out. As mentioned in the past, there is a delicate balance between avoiding leaking strategy to competitors and being transparent with the community.
  • The team reiterated that the protocol is on solid footing with regards to treasury, dedication, and roadmap.
  • Achieving the end goal of Tokemak as a protocol to improve liquidity bandwidth is an iterative process. While v1 was a good first step towards achieving this goal, more can be done to fully realize this vision.
  • Two mechanisms will be utilized to help decrease the circulating supply of TOKE: locking and slashing.
  • The profitability of deployments will determine which Reactors will be subjected to slashing. Announcements will be made to help prepare users for this transition and manage their liquidity directing positions.
  • Similar to veCRV, locking TOKE will allow increased governance (liquidity directing) power and yield.
  • Liquidity has historically been provided by costly centralized market makers that charge monthly fees and extract excessive value. Tokemak swung this pendulum too far in the opposite direction, allowing protocols to deploy liquidity regardless of profitability.
  • The next phase of Tokemak will help both mature and fledgling protocols provide liquidity in ways that benefit the ecosystem as a whole.
  • One of the visions for Tokemak is for it to be a venue where stablecoins compete for distribution. However, pairing volatile altcoins with stables exposes the protocol to excessive impermanent loss. Implementing a model in which assets are more selectively paired against correlated assets can allow optimized liquidity deployment at various stages of a token’s life-cycle.
  • Tokemak is pursuing a potential partnership with Lido and other staking derivative providers, allowing the protocol to pair new tokens with wstETH.
  • C.o.R.E.3. Reactors have intentionally been held back due to the market conditions. It would be difficult to deploy these pairs profitably, so caution is needed. It makes more sense to further develop slashing and sustainable deployment mechanics.
  • The team is seeking feedback from the community on the possibility of distributing yield in the form of ETH or USDC.
  • The DAO governance framework has taken a back seat to the protocol mechanics work, but is still a priority.
  • The team would like to avoid hyping unreleased updates, and instead let their work speak for itself once it's ready for the public. They acknowledge that this can cause stress within the community, and they will continue to seek a balance.
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