DEGO.Finance Defi with Sustainability

4 min readSep 27, 2020

INTRODUCTION

Recently, we’ve seen a boom in decentralized finance (DeFi). The exponential growth and FOMO sentiment around DeFi have attracted many new crypto investors and developers to the space and have stimulated the interest of traditional financial players. Everyone hunts for gems in the DeFi world.

The exploration is worthwhile, but your funds, time and chances are limited, and you can never fully catch all investment opportunities.

However, in DEGO, things would be different.

DEGO adopts a modular design. Modularity refers to the combination of various elements of the product to form a subsystem with specific functions. We combine these subsystem as a universal module with other modules to create a new system with multiple functions and performance.

In short, each product can be regarded as a module. After a combination of different modules, a new product comes out, thereby achieving the effect of 1+1>2. LEGO bricks are the best example and inspiration for those modules. Every brick is plain and ordinary, but it generates endless possibilities when put together.

DEGO equals to LEGO in the DeFi world. With each DeFi protocol as a brick, like Stable Coin (DAI), Lending (Aave, Compound), DEX (Uniswap and Balancer), Derivatives (Synthetix), Insurance (Nexus Mutual), we will build a new dApp to enhance the value of DeFi, creating diversified investment portfolios and generating substantial financial returns for users. DEGO will become the entrance to the future of financial services.

STAKE

Yield Farming has recently been the focus of interest and discussion in the broader crypto community, initiating a new era for DeFi via liquidity mining.

The popular formulas of current liquidity mining are:

Daily output per user = Daily output of the mining pool * Staked amount/Total staked amount

Under this model, the whales become the top winners, they can easily take away nearly all liquidity rewards and irrational sellout their yield. And this is a harsh predatory game for shrimps. With the rise of yield farming, whales are the most common concern for DeFi farmers.

To solve this problem and toward a more sustainable ecosystem of DeFi, we create the Liquidity Mining with algorithmic adjusted.

Mining Power

In DEGO, we used a set of deterministic algorithms for liquidity mining, convert the LP token staked by users into POWER (similar to the hashrate of Bitcoin mining), and getting earnings through them. Under this model:

Daily output per user = Daily output of the mining pool * POWER / Total POWER

POWER = Staked LP token amount * Coefficient of correspondence

Calculation Formula of POWER

We divide users into three ranges according to their staked amount:

a) Worst range: users with the most staked amount = 1 time rewards

b) Best range: users with the intermediate staked amount = 5 times rewards

c) Common range: users with the smallest staked amount = 3 times rewards

For example, User A staked 10 LP Tokens and is currently in the common range, then his POWER is 10 * 3 = 30 POWER

Initial Three Ranges

The numbers of the initial three ranges are [10, 10, total number-20]. As the total number of users increases by 100 people, the worst range and the best, range increase by 10 slots, up to a maximum of 50 people.