Orkan Protocol

The Orkan ($ORK) is a meta-governance protocol that aims to bootstrap the liquidity flow on the Fantom Opera Blockchain. It’s going to use bond issuance to acquire governance tokens from the projects that employ liquidity gauges and locking mechanisms as exchange incentives. At the time of publishing, we are mainly referring to SpiritSwap and LiquidDriver.

Also, by using some of the voting power accrued by the Orkan, we are looking to enable deep liquidity and usage of wrapped BTC assets within Fantom. But why? To build our way to one of our long-term objectives: creation of a powerful, flexible and unprecedented neutral entity across the interchain. This will allow our holders to (safely) enjoy numerous incentives in an unpredictable and diversified liquidity landscape.

SpiritSwap is one of the most important protocols (and gateways) on the FTM ecosystem. Their high product diversity and constant innovation is an example of what DeFi should be.

That’s why 75% of the $SPIRIT acquired is going to be locked as $inSPIRIT and 25% is going to remain liquid for our treasury to re-allocate freely (according to the DAO’s vote).

LiquidDriver has been accruing a lot of well-deserved attention. By having one of the most cohesive and active communities in the space, they have achieved a firm, but flexible grip over FTM.

That’s why we are locking 75% of the obtained $LQDR for $xLQDR. This will allow us to harvest a lot of value out of their yield rewards and perpetually feed our treasury. As with $SPIRIT, 25% of $LQDR is going to remain liquid.

Currently, our resources are being devoted towards the “Bootstrapping Phase” or Phase 1. For the moment, we are solely looking to increase the treasury and the value behind $ORK. Once we achieve our first milestone, the DAO will evaluate and decide what are going to be the next steps of the protocol towards our long-term objectives.

Both pre-sale and airdrop tokens are going to be delivered directly to your wallet. There’s no need to claim your tokens anywhere, you only have to wait until the contract has been deployed. In both cases, the tokens are going directly to the addresses that participated in the $TRDL lock on Ethereum.

With the objective of protecting our investors, we have decided to start our Public Sale in a Liquidity Generation Event (LGE) on BeethovenX’s platform. We believe this is the only way to protect new buyers from slippage, investors from suffering significant price impact, and seed investment from being diluted, while minimizing the treasury’s cost of providing liquidity to the launching pool. Objectively, this is the most capital-efficient way of bootstrapping new treasury assets.

We believe that Orkan should act as a meta-governance protocol over liquidity flow within the FTM ecosystem. Specifically, that Orkan should utilize perpetual bond issuance to acquire governance tokens from those projects on FTM employing liquidity gauges and locking mechanisms as exchange incentives (i.e. Spirit and Liquid Driver).

We propose to first focus on acquiring Spirit and LQDR as they are proven within the ecosystem and present a clear revenue generating opportunity. However, with the much anticipated launch of Solidly it is possible that adding additional bonds for assets with Solidly token allocations may be beneficial. We suggest that this consideration is monitored while both the Orkan and Solidly protocols begin to take shape.

As a long-term objective, we believe that a portion of voting power accrued could be used to enable deep liquidity and usage of wrapped BTC assets within ecosystem (i.e. wBTC and vBTC). This transition may also enable Orkan to adequately grow and maintain the peg of Strudel’s vBTC product via bond issuance and arbitrage.

These proposed directives benefit the Orkan community in the following ways:

a) Acquisition, and subsequent locking, of exchange related governance tokens allows Orkan to:

1. Accrue exchange-related fees, providing a perpetual revenue stream for the Orkan treasury
2. Allow $ORK holders to decide which liquidity pools to boost and, thus, where to drive liquidity
3. Provide additional revenue streams via bribe markets in the event they are created on FTM

b) Accumulation of wrapped BTC assets in the treasury over time will enable Orkan to:

1. Be a dominant provider of wrapped BTC liquidity on FTM, providing additional revenue streams and opening up discussion for potential partnerships
2. Grow and maintain a trustless wrapped BTC product within FTM

c) Establish the first DAO owned Bitcoin treasury and grow it in perpetuity with the following goals:

1. Leverage the value of the original liquidity primitive by creating incentives that foster a deep and varied liquidity landscape.
2. Transforming Strudel DAO into a powerful neutral entity which protects the values of BTC based products and drives its adoption across the interchain.

We believe the first priority of Orkan should be to gain as much voting power as possible, as quickly and efficiently as possible. Therefore, the protocol should initially focus on acquiring assets employing liquidity gauges and locking mechanisms as exchange incentives.

In our opinion, the first assets that should be acquired are Spirit and LQDR. This opinion stems from the fact that both are gaining market share as a hub for decentralized exhange and yield farming on FTM. Moreover, locked Spirit (inSpirit) and LQDR (xLQDR) have current APRs of ~43% and ~103% respectively. Of note, we may later wish to accumulate those tokens governing protocols like Solidly or BeethovenX.

To incentivize Spirit and LQDR acquisition, we propose the following bond discount rates and treasury allocation based on the following targets:

We believe these targets can be achieved within the first four weeks of launch.

As Spirit is acquired we believe that half should be locked and wrapped as OinSpirit (OrkaninSpirit) and a swap pool in BeethovenX could be created for OinSpirit/Spirit to collect additional exchange fees in Beets. If creating our own wrapper is not technically feasible or slow, we believe 75% of spirit should be locked as inSPIRIT and 25% remain liquid. Similarly, we believe 75% of LQDR should be locked as xLQDR and 25% remain liquid.

Of note, Spirit and LQDR will be perpetually locked. Spirit votes will initially be used to boost the FTM/ORK liquidity pool to improve treasury LP rewards.

During the governance bootstrap stage all Spirit and LQDR rewards will be harvested and locked continuously to compound the treasury’s positions. Once initial targets are met, consensus should be reestablished as to what policy should be implemented in order to meet sustainable growth rates and whether we want to continue acquiring Spirit or move to alternative assets.

Once the desired levels of voting power are accrued, we propose that Orkan shift more resources towards other potentinal partnerships (veDAO, 0xDAO) and growing a treasury of Bitcoin indefinetly. In our view, by becoming the first DAO to explicitly accumulate BTC we can over time control a significant position in the network. The Bitcoin design allows for value to be stored in perpetuity which makes it the perfect asset for a treasury to hold as backing.

The BTC allocation in the treasury will initially be mainly composed of wBTC which is the most widely used BTC wrapper on chain. Over time other wrappers will be introduced in order to diversify the risk profile of on chain BTC.

To acquire wrapped BTC assets, bonding discounts and treasury allocations targets will shift to the following (pending the need for additional FTM/ORK liquidity):

As wrapped BTC assets are acquired, we suggest putting them to work in money market protocols such as Scream, which will provide lending yield or allow the treasury to lever up its position. Alternatively, these positions can unwound to create or contribute to liquidity pools — deepening BTC liquidity on FTM. We could again use inSpirit voting power to boost rewards in these pools.

During the BTC Accumulation and Utilization stage 50% of Spirit and LQDR rewards will be locked to compound Orkan’s inSpirit position and 50% will be used to purchase wBTC or vBTC. Once the target holdings are met, consensus should be reestablished as to treasury allocations, bond dynamics, and acquisition of alternative assets.

Upon obtaining adequate and sustained protocol growth, we propose that Orkan contribute to maintaining Studel’s vBTC peg via perpetual bond auctions.

A perpetual bond auctions enable the control of the vBTC supply in the following two scenarios:

1. If the price of vBTC is under the peg the free-floating supply of vBTC needs to decrease, then $ORK bonds are incentivized by lowering the vBTC BCV, which increases the demand for vBTC to purchase bonds at a discount. Alternatively other treasury assets can be used to increase the treasury vBTC stock.
2. If vBTC price is above the peg the free-floating supply of vBTC should increase through increased bridge usage. Alternatively, vBTC stock can be swapped for other types of tokenized BTC in order to diversify the treasury balance sheet. The BCV can be increased if necessary.

In this instance, bond discounts will be dynamic for vBTC (depending on where it is trading in relation to the peg) and depend on the need to acquire additional assets.

At this stage, we suggest a higher treasury weighting for wBTC and vBTC as follows:

Apart from revenue generated from inSpirit and xLQDR rewards and yield/fees from wBTC, the procotol can participate in vBTC arbitrage to gain an additional revenue stream.

Orkan vesting periods

Linear vesting

Gradual unlock of tokens (on a per/block basis) over course of vesting period(s).

Team allocation (staked)

Team allocation will be staked, converting from ORK to sORK prior to first epoch. Team members will be able to claim their pro-rata share of sORK at each unlock.

Launch details

Presale:

$33.33

Friday, February 11th.

Launch & Airdrop:

$66.66

Tuesday, February 15th.