Draft Proposal for Creating wPIVX Wrapped Token on Ethereum

[cosullivan]

Name: PIVX_Wrapped
Term: 2 cycles
Cycle Amnt: 5000
Total: 10000
PIVAuthor: Cillian O’ Sullivan
Receiver: DG1GCFomn1bLBqC1KAdmAGw8MnYYMBnCwy
Address: DG1GCFomn1bLBqC1KAdmAGw8MnYYMBnCwy
Created: 17/02/2024
Status: Pre-Proposed

Overview:This pre-proposal outlines the creation of a wrapped token of PIVX, named wPIVX, on the Ethereum blockchain. The aim is to enhance interoperability between PIVX and the Ethereum ecosystem, allowing PIVX holders to utilize their assets within Ethereum-based decentralized applications (DApps) and smart contracts. This will pave the way for defi applications using PIVX.

Commitments/Standards:
1. Transparency: All aspects of the wPIVX creation process, including token minting and redemption mechanisms, will be fully transparent and auditable.
2. Security: The smart contracts governing the wPIVX token will undergo rigorous security audits to ensure the safety of users' assets.
3. Interoperability: Efforts will be made to seamlessly integrate wPIVX with existing Ethereum-based DeFi protocols and platforms.
4. Community Engagement: Continuous communication with the PIVX community will be maintained throughout the project development and implementation phases.

Details
:- Token Creation: The wPIVX token will be created as an ERC-20 token on the Ethereum blockchain, with a 1:1 peg to PIVX.
- Smart Contracts: Custom smart contracts will be developed to handle the minting and burning of wPIVX tokens, ensuring trustless and secure operations.
- Liquidity Provision: Strategies will be implemented to provide sufficient liquidity for wPIVX on decentralized exchanges (DEXs) and liquidity pools.
- Integration: Efforts will be made to integrate wPIVX with popular Ethereum-based DeFi platforms, such as decentralized exchanges, lending protocols, and yield farming projects.- Promotion and Adoption: Marketing and promotional activities will be conducted to raise awareness about wPIVX among the Ethereum and wider crypto communities, driving adoption and usage.

Funds Distribution Breakdown:- Development Costs: 70% of the total requested funds will be allocated to cover development expenses, including smart contract development, security audits, and integration efforts.- Marketing and Promotion: 30% of the funds will be dedicated to marketing and integration with defi protocols to drive awareness and adoption of wPIVX.


Promotion:Efforts will be made to promote this pre-proposal within the PIVX community through various channels, including social media, forums, and community newsletters.

Feedback and suggestions from the community will be actively sought and considered to refine the proposal before formal submission to the PIVX DAO.

 

[Eric_Stanek]

You stated liquidity will have strategies implemented, but liquidity means LOTS of funds, and you haven't explained where that will come from. Without liquidity being properly addressed, it will all fail. Please clarify.

 

[fuzzbawls]

From my perspective, PIVX is already natively available for trade on a wide number of exchanges thanks to the efforts of Jeffery. I am, however, not sure what more can be added via a wrapped token. Liquidity issues above are also a concern with this theoretical idea, and must be accounted for.

 

[cosullivan]

The community also must decide how many wrapped tokens we wish to create. One PIVX would be put up as collateral in order to mint

You stated liquidity will have strategies implemented, but liquidity means LOTS of funds, and you haven't explained where that will come from. Without liquidity being properly addressed, it will all fail. Please clarify.

Yes, you are absolutely correct. I think ultimately the community must decide how many tokens they want and perhaps liquidity could be funded via proposals over a few cycles . Of course, once tokens are minted if the community decides that we aren’t making use of it the capacity needed they can always be burned back to regular PIV.

 

[cosullivan]

From my perspective, PIVX is already natively available for trade on a wide number of exchanges thanks to the efforts of Jeffery. I am, however, not sure what more can be added via a wrapped token. Liquidity issues above are also a concern with this theoretical idea, and must be accounted for.

Absolutely PIVX is supported by many great exchanges and that is a credit to the development team, however, decentralised exchanges are really just scratching the surface of defi, which I believe will once again be incredibly popular during the next bullrun, and we certainly don’t want to miss out. Practical uses include,

Decentralized Lending and Borrowing: DeFi allows individuals to lend and borrow funds without relying on traditional intermediaries such as banks. Users can lend their wPIV and earn interest or borrow assets using their crypto holdings as collateral.

Yield Farming: Yield farming, also known as liquidity mining, involves users providing liquidity to DeFi protocols in exchange for earning rewards. Users can stake their PIV or provide liquidity to various liquidity pools, enabling them to earn additional tokens or fees.

Decentralised Insurance: DeFi platforms are exploring the concept of decentralised insurance, where users can purchase coverage against various risks without relying on traditional insurance providers. This enables more accessible and customizable insurance solutions.

Decentralised Asset Management: DeFi offers decentralized asset management platforms that allow users to manage and invest their funds directly without relying on traditional asset management firms. These platforms often utilize smart contracts to automate investment strategies.

Prediction Markets: DeFi has facilitated the development of prediction markets, where users can speculate on the outcome of various events, such as elections, sports events, or even cryptocurrency prices. These markets provide a decentralised way for users to make predictions and potentially earn rewards.

Decentralised Identity: DeFi has also explored decentralized identity solutions, where users can maintain control over their personal information and selectively share it with different entities without relying on centralized authorities.

 

[Eric_Stanek]

Lending/Borrowing and Yield Farming isn't that attractive, because it would have to beat the native Staking/Masternode rewards of 13% to 18%. It would also have to beat those rates significantly, to offset the risk of not controlling your keys. Same issues undermine the other features too. How do we overcome that?

 

[cosullivan]

Lending/Borrowing and Yield Farming isn't that attractive, because it would have to beat the native Staking/Masternode rewards of 13% to 18%. It would also have to beat those rates significantly, to offset the risk of not controlling your keys. Same issues undermine the other features too. How do we overcome that?

You raise valid concerns regarding the competitiveness of lending/borrowing and yield farming compared to native staking/masternode rewards. To address these concerns and make wPIV more attractive, I would plan to implement several strategies:

1. Incentive Mechanisms: We will explore implementing additional incentive mechanisms, such as yield farming incentives or liquidity mining rewards, to make participating in wPIV more lucrative compared to native staking/masternode rewards. Furthermore masternodes have a barrier of entry of 10,000 PIV or about $3000. So most people are earning 13%.
2. Risk Mitigation: I understand the importance of controlling one's keys and will prioritize security measures to mitigate the risk associated with using wPIV on external platforms. This includes rigorous security audits of smart contracts, insurance options for users, and educational resources on best practices for managing decentralized finance (DeFi) assets.
3. Diversification of Use Cases: While staking and masternodes offer attractive rewards, wPIVX opens up new avenues for PIVX holders, such as participation in decentralised exchanges, lending protocols, and yield farming opportunities. By diversifying their portfolio and exploring different earning strategies, users can potentially maximise their returns while maintaining exposure to PIVX.
4. Interoperability Benefits: wPIV bridges the gap between the PIVX and Ethereum ecosystems, allowing PIVX holders to access a wide range of DeFi services and opportunities available on Ethereum. This interoperability can unlock additional value and utility for PIVX, beyond traditional staking rewards.

I appreciate the feedback and will continue to explore ways to enhance the value proposition of wPIV, making it an attractive option for PIVX holders seeking to explore new earning opportunities while managing associated risks effectively.

I once again though would like to re iterate the endless possibilities of DeFi
Decentralised Exchanges and Staking Borrowing and lending aren’t the only options, we also have an endless number of revolutionary features that can be explored.

Derivatives Markets: DeFi platforms enable the creation and trading of synthetic assets, derivatives, and other financial instruments. wPIV holders can engage in derivatives trading, hedging strategies, and risk management activities to optimize their investment portfolios and hedge against market volatility.

Smart Contract Development and Innovation: With wPIV on Ethereum, developers can leverage existing smart contract infrastructure to build innovative DeFi applications and services that integrate seamlessly with the PIVX ecosystem. This encourages collaboration, creativity, and experimentation within the DeFi space.

 

[johnnylaw]

Absolutely PIVX is supported by many great exchanges and that is a credit to the development team, however, decentralised exchanges are really just scratching the surface of defi, which I believe will once again be incredibly popular during the next bullrun, and we certainly don’t want to miss out. Practical uses include,

Decentralized Lending and Borrowing: DeFi allows individuals to lend and borrow funds without relying on traditional intermediaries such as banks. Users can lend their wPIV and earn interest or borrow assets using their crypto holdings as collateral.

Yield Farming: Yield farming, also known as liquidity mining, involves users providing liquidity to DeFi protocols in exchange for earning rewards. Users can stake their PIV or provide liquidity to various liquidity pools, enabling them to earn additional tokens or fees.

Decentralised Insurance: DeFi platforms are exploring the concept of decentralised insurance, where users can purchase coverage against various risks without relying on traditional insurance providers. This enables more accessible and customizable insurance solutions.

Decentralised Asset Management: DeFi offers decentralized asset management platforms that allow users to manage and invest their funds directly without relying on traditional asset management firms. These platforms often utilize smart contracts to automate investment strategies.

Prediction Markets: DeFi has facilitated the development of prediction markets, where users can speculate on the outcome of various events, such as elections, sports events, or even cryptocurrency prices. These markets provide a decentralised way for users to make predictions and potentially earn rewards.

Decentralised Identity: DeFi has also explored decentralized identity solutions, where users can maintain control over their personal information and selectively share it with different entities without relying on centralized authorities.

I'm going to think through all of the implications. DeFi is certainly a narrative that is coming back into play, with now MANY mainnets operating and still more being built. If I were going to attempt to bridge that way, I probably wouldn't start with ETH.

 

[Eric_Stanek]

To be honest, I have steered clear of supporting wPIV because we never had the budget to fund a liquidity pool. But, now we do. There are still lots of issues, but perhaps it can be considered now.

 

[cosullivan]

I'm going to think through all of the implications. DeFi is certainly a narrative that is coming back into play, with now MANY mainnets operating and still more being built. If I were going to attempt to bridge that way, I probably wouldn't start with ETH.

Certainly, we definitely should explore other options, especially with so many new innovative options out there bringing lower gas fees and more. BSC, Polygon, Fantom, Arbitrum, etc.

 

[Leander]

Very interesting! opens up many usage options!
however, on the other hand, it leaves our network vulnerable to attacks.

“While cross-chain bridges have enabled the proliferation of new blockchains, failures can be devastating for smaller networks that rely on this technology for a large amount of their total liquidity.”

Today this vulnerability is not an acceptable price in my humble opinion.

 

[cosullivan]

Very interesting! opens up many usage options!
however, on the other hand, it leaves our network vulnerable to attacks.

“While cross-chain bridges have enabled the proliferation of new blockchains, failures can be devastating for smaller networks that rely on this technology for a large amount of their total liquidity.”

Today this vulnerability is not an acceptable price in my humble opinion.

Great to hear many perspectives, not exactly sure where the vulnerability lies for the PIVX blockchain though?

 

[Leander]

Great to hear many perspectives, not exactly sure where the vulnerability lies for the PIVX blockchain though?

I expressed myself wrong.
I am referring to if there is an attack on wPIV's liquidity, this would be a blow to PIVX that would be unlikely to be reestablished.
You can consider me a layman on the subject.
My perception is that attacks used on bridges are increasingly frequent and sophisticated. Correct me if I said something that doesn't correspond to reality.

 

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