TI Rating Report - Dafi Protocol
Dafi protocol creates a demand-pegged token inflation mechanism to motivate long-term users and early adopters and to avoid the oversupply of tokens. Staking DAFI tokens could receive synthetic as reward and the synthetic called a dDafi (dToken), which could be burned for underlying native token later on a 1:1 ratio. And the reward quantity is tied to network demand. The initial reward is restricted due to the low adoption and the quantity of reward increase as network adoption rises:
- When demand is low, users are given a reduced quantity of the dToken;
- dToken can be burn immediately for a reduced reward;
- As network demand rises, longer-term users’ dTokens expand in quantity.
Dafi enables every decentralized protocol and platform to create a synthetic (dToken) from their native token as the reward. Each economy could select a range of metrics to calculate its network’s demand. Metrics used to calculate may include:
- Price: the most significant weight;
- Onchain volume: transaction quantities;
- Transaction value: Beckstroms law, the value of transaction’s minus cost of transaction’s;
- Offchain volume: from a chosen Centralized Exchange;
- Nodes: Metcalfes law, nodes quantity squared;
- Total Value Locked (TVL) .
By feeding oracle data into the curve, the network’s demand could be quantified and affect token supply and reward quantities.