Oikos 2025
“Up only & Unruggable” tokens launchpad on BSC
Introduction
Oikos is pivoting away from its original model of synthetic asset emission to adopt an emerging narrative called “Up Only & Unruggable Liquidity.” This technology aims to revolutionize the launch and bootstrapping of tokens through an innovative approach that involves deploying smart contract code to encode precise token emission policies and permissionless market-making strategies, thereby managing the token’s liquidity without intermediaries. As part of the restructuring, Oikos will feature a permissionless launchpad through which projects can deploy tokens leveraging this technology.
Up Only & Unruggable Liquidity
The technology's core concepts are the “solvency invariant” and “intrinsic minimum value” (IMV). The former refers to the protocol’s ability to buy back its circulating supply while avoiding unexpected price fluctuations; the latter is the minimum price the token will ever reach in the event of a massive sell-off. Additionally, the IMV is guaranteed to increase in value as liquidity rises due to trading and other protocol revenue streams, regardless of market direction. Importantly, the protocol is trustless, meaning that liquidity is managed entirely by smart contract code, thereby eliminating the risk of “rug pulls” by malicious operators.
Permissionless Market Making
To deliver the features described in the previous section, the token liquidity is deployed to three contiguous positions (Fig 1) on a DEX supporting concentrated liquidity, e.g., Uniswap V3 or Pancake Swap. This is done by depositing the underlying asset (e.g., BNB) and backing the tokens in the floor position during the token bootstrap phase. As mentioned in the previous section, this process is handled by the smart contracts that compose the protocol in a trustless manner. The anchor and discovery positions initially only contain tokens (e.g., OKS) and are exchanged for the underlying as trading occurs. As the anchor and discovery positions are filled in with the underlying asset and hit a defined threshold, funds are relocated and sent to the floor; such operations can be triggered by interacting with a public-facing function exposed by the smart contracts. This mechanism enables the IMV to increase in value over time and never decrease while the token price is free to float within the entire liquidity price range.
Concentrated liquidity
In contrast to its V2 predecessor, Uniswap V3 allows anyone to provide liquidity for a token pair within a specific price range. This is done by concentrating the liquidity instead of distributing it uniformly along the reserves curve. Depending on the chosen range and market direction, each position transitions from being composed entirely of one asset to containing the other asset, plus the corresponding fees solely. The maximum amount of each asset that liquidity positions can absorb is referred to as “capacity” in this article.
Liquidity Structure
As shown in Fig. 1, the liquidity is deployed to three contiguous positions which are defined as follows:
- Floor - As the name suggests, the floor position contains the majority of the reserves backing the IMV price denominated in the underlying token (e.g. BNB). This price range is typically very narrow and represents the protocol’s last line of defense in the event of a sharp market downturn. The floor position is rebalanced when a “shift” operation is executed.
- Anchor - This position is centered around the spot price of the token and can contain both assets (including the underlying). The role of this position is to maintain a uniform price action under normal market conditions. This position can be rebalanced by both “shift” and “slide” operations.
- Discovery—This position's price range is designed to allow the token to increase in value freely if there is sufficient demand. In Finance, “price discovery” is the process of determining the price of an asset through the interaction of market forces. This position can contain both assets, and in addition to being rebalanced, the number of tokens it contains can be altered by mint/burn operations.
The liquidity structure is configurable and can be adapted depending on the token type and the project’s goals. The launchpad will offer presets tailored to various usage scenarios.
Insolvency Invariant
Oikos defines “circulating supply” as any token that was purchased by interacting with the DEX liquidity and which remains outside the protocol’s control. To guarantee solvency, the following relation is maintained at all times:
capacity > circulating supply
Specifically, the Floor and Anchor positions are carefully designed to ensure they contain sufficient reserves to absorb the entire circulating supply, should the market experience a sell-off. The insolvency invariant is enforced at the protocol level by smart contract code.
Public facing functions
The protocol is designed to be permissionless, meaning that any actor can contribute to running it without requiring any special privileges. The two main public-facing functions are:
- Shift - Called once the tokens inside the anchor and (partially) discovery positions are purchased and the liquidity ratio crosses a pre-defined threshold. As a result of this operation, the underlying contained in the position is transferred to the floor, and an IMV increase is triggered.
- Slide - Called once tokens are sold back to the liquidity positions while crossing a predefined threshold. Under these circumstances, the protocol effectively shifts the anchor discovery position closer to the market price.
Elastic supply
In addition to the algorithmic liquidity structure described in previous sections, the protocol can respond to market conditions by executing mint and burn operations as needed. When the price increases significantly, and the liquidity in the discovery position is depleted, the protocol mints extra supply to accommodate the increasing demand. On the other hand, if the price decreases at a certain pace, the protocol burns tokens contained in the discovery position to reduce unbacked supply and thus enforce “scarcity” as a countermeasure.
Utility
Tokens bootstrapped using the Oikos launchpad benefit from inherent utility deriving from the innovative token design, which can be accessed through the upcoming dedicated user interface.
No-Liquidation Loans
Holders can use their assets as collateral to borrow directly from the floor liquidity and receive the underlying in exchange. To access this feature, holders pay a fixed-term fee, calculated on a per diem and pro-rata basis; currently, the charge is approximately 0.03% of the loan amount. Loans can have variable durations and involve locking token collateral against its value in the underlying token, quoted at the IMV price. The credit facility disburses the loan amount directly from the floor liquidity; since it’s guaranteed that the IMV cannot decrease, the protocol does not need to worry about the under-collateralization of a loan. This happens because the collateral can only increase in value. If a borrower fails to repay their outstanding debt before expiration, the protocol burns the necessary amount of locked collateral without incurring losses. Loans can also be extended in duration; in this case, a new fee is recalculated based on the new loan terms.
Native Leverage
By combining the no-liquidation loans and automatic purchase of tokens, holders can leverage their position cheaply and without risk. Additionally, as the IMV price increases due to market activity, the borrowable amount also increases, allowing holders to borrow more with the same collateral.
Staking
Depending on the liquidity configuration and project type, a small portion of the liquidity denominated in the underlying token typically remains unused; as a result, these funds can be utilized in other parts of the protocol. For example, Oikos uses extra liquidity to back new supply, which is then distributed to users staking in the system. Upon staking OKS, holders receive the staked counterpart (e.g., sOKS). Once the protocol liquidity is rebalanced and the IMV increases, staking rewards accrue to sOKS holders in real-time. Holders can unstake and convert the staked token at a 1:1 ratio with the native asset; projects can configure minimum staking times and other restrictions that apply to this feature.
Protocol Revenues
The protocol generates revenues in several ways. First and foremost, the liquidity structure allows the protocol to sell tokens at a slightly higher than it buys them for. This is the main protocol revenue stream through which the underlying token accrued is directed to the floor liquidity. This allows the protocol to increase its IMV over time. Moreover, since the protocol controls the bulk of its liquidity, it receives a percentage of the fees generated by all trading activity at the DEX level. Pools on PancakeSwap and Uniswap can be created with a fee ranging from 0.01% to 1%, depending on the token type. For example, more volatile and less liquid pairs may benefit from a higher fee rate to compensate liquidity providers. In addition to the mentioned venues, extra protocol utilities contribute to generating revenue flow. For example, the credit facility allows holders to borrow directly from the liquidity at an upfront cost. The interest paid by lenders is partially directed to the floor to strengthen the liquidity.
Reverse Token Split
As part of the product renovation, OKS will be bootstrapped on the upcoming launchpad, subject to a reverse token split with a ratio of 75:1. To this end, a snapshot of Oikos Debt Share (ODS) balances has been taken at block height 24990716. Only OKS holders with a balance of at least 1000 units at this block height can claim their new tokens following the split operation while all the remaining supply will be burned. Contextually, all synths will be discontinued in combination with the Oikos Minter and the Oikos Exchange in their current form.
Liquidity Bootstrap
After the split operation, the liquidity will be deposited on PancakeSwap via a bootstrap process. The initial IMV is 0.00003785 BNB, with a market capitalization estimated at 130 BNB. The floor liquidity will back approximately 40% of the initial circulating supply of ~3,400,000 OKS, corresponding to roughly 50 BNB. As a result of the token split, the supply will be held by a dedicated smart contract, which will distribute it to legitimate holders upon successful migration.
Conclusion
The operation lays down an ambitious plan for Oikos's future. The new go-to-market strategy combined with revolutionary technology sets the project on a trajectory with the new DeFi narrative and is poised to propel OKS to new heights. Future articles will publish more details about the new tokenomics and migration process for qualified holders. Stay tuned to our community and social media for announcements and updates.
Happy 2025, everyone from the Oikos Team🍾
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