Redemption Token
# Features Redemption Bonds Features * **Non-fungible:** Not like any form of ERC-20 LP token, a with different nonce is not mutually interchangeable, hence not fungible. * **Multi-dimensional:** Each ERC3475 Redemption Bond stores an array of integers, not like an ERC-20 token can store only a mapping from an address to a balance. This feature is used to store redemption conditions and different interest rates. * **Gas-efficient:** Current existing fragmentation of LP or NFT use ERC-20 token standard. This means each fragmentation of NFT or LP needs the deployment of a new smart contract. Thus generate an unnecessary gas expense. * **Multiple fragments:** Because of the high gas spent, the current fragmentation systems must limit the number of classes and sub-categories generated. ERC-3475 can in turn generate almost countless classes and sub-categories without the need to publish a new smart contract. * **Puttable:** the debts that a Redemption Bond represents must be fulfilled when the conditions are met. It can be a fixed amount of repayment or any floating interest based on a predetermined index factor. * **Obligated:** ERC-3475 obliges both the Redemption Treasury and the creditors to fulfill their promise. This feature can be used to make sure that the Liquidity will not be emptied suddenly. In return, the Redemption Treasury will ensure the promised yield. * **Marketable:** Debond is itself a financial product that will be allowed to be exchanged on a secondary market in the later phase of the project.
# Redemption Bonds Prizes & Lucky Draw Periods * Simply, higher prizes for higher denomination bonds. * All Series of same denomination bonds offer equal sized prizes.
| Bond Denomination | $100 | $500 | $1,000 | $10,000 |
|---|---|---|---|---|
| Prize Money | $1,000 | $5,000 | $10,000 | $100,000 |
| Lucky Draw Happens | Weekly | Fortnightly | Once a Month | Once Every 3 Months |
| Number of Series/Draws Per Month | 4 | 2 | 1 | 0 |
| Number of Series/Draws Per 3 Months | (4*3) = 12 | (2*3) = 6 | (1*3) = 3 | 1 |
Redemption Bond NFT
| Issuance of Redemption Bonds | ||
| Collateral Pool Management | ||
| Collateral Size Determination & Oracle | ||
| Redemption of Bonds | ||
| Prize Pool Calculation | ||
# Collateral Pool Management What is Collateral Pool and How Will it be Managed? The collateral pool is a specific pool in Redemption Treasury that will be managed by the smart contract. It will hold the collateral assets in a separate pool. The smart contract will have functions for adding and removing collateral from the pool. To ensure the bonds are fully collateralized, the smart contract will only allow bonds to be issued if there is sufficient collateral in the pool. The collateral pool will be managed by smart contract and the Redemption DAO Treasury. The collateralized assets will be locked in a special pool, which will be audited periodically to ensure that it is fully backed by the issued bonds. The pool will be monitored to ensure that it is always collateralized at the appropriate ratio. If the collateralization ratio falls below the required level, the Redemption DAO will need to add more assets to the pool to bring it back up to the required level. The smart contract uses an automated monitoring system to constantly check the collateralization ratio of the bonds pool. If the ratio falls below the required level, the smart contract will trigger an event to alert the Redemption DAO that additional assets need to be added to the pool. To implement this function in the smart contract, we will define a minimum collateralization ratio threshold variable, such as **`‘MIN_COLLATERALIZATION_RATIO’`**. We can also define a function, **`‘checkCollateralizationRatio()’`**, that calculates the current collateralization ratio and compares it to the **`‘MIN_COLLATERALIZATION_RATIO’`**. If the ratio falls below this threshold, the function will trigger an event to alert the Redemption DAO administration to add more assets to the pool. Here is an example of how this function might be implemented in Solidity: {% code title="Collateral Pool Management" overflow="wrap" lineNumbers="true" %} ```solidity uint256 public constant MIN_COLLATERALIZATION_RATIO = 1e18; // minimum collateralization ratio threshold (1:1) function checkCollateralizationRatio() public view returns (bool) { uint256 totalValueLocked = calculateTotalValueLocked(); // calculate the total value of assets locked in the pool uint256 totalDebt = calculateTotalDebt(); // calculate the total value of bonds issued uint256 collateralizationRatio = totalValueLocked / totalDebt; // calculate the current collateralization ratio if (collateralizationRatio < MIN_COLLATERALIZATION_RATIO) { emit CollateralizationRatioBelowThreshold(totalValueLocked, totalDebt, collateralizationRatio); // trigger an event to alert the Redemption DAO return false; } return true; } ``` {% endcode %} In this example, the **`‘calculateTotalValueLocked()’`** and **`‘calculateTotalDebt()’`** functions would be implemented to calculate the total value of assets locked in the pool and the total value of bonds issued, respectively. If the current collateralization ratio falls below the **`‘MIN_COLLATERALIZATION_RATIO’`**, the function will trigger an event (such as ‘CollateralizationRatioBelowThreshold’) to alert the Redemption DAO that additional assets need to be added to the pool. # Collateral Size Determination & Oracle How Will The Collateral Size Determined Against The Issued Bonds? To determine the price of RDTN tokens and how many tokens to lock in the collateral pool, an oracle will be used. The oracle will provide a price feed for RDTN and the smart contract will use this price to calculate the required amount of RDTN tokens to lock in the collateral pool. The formula for calculating the required amount of RDTN tokens is: | requiredRDTN = requiredCollateral / RDTNPrice | | --------------------------------------------- | Where RDTNPrice is the current price of RDTN as provided by the oracle. For example, if the collateralized assets are $100,000 and the current price of RDTN tokens is $0.10, the amount of RDTN tokens required to be locked in the pool will be 1,000,000 RDTN tokens. here's an example of how the oracle integration function will look like in Solidity programming language: {% code title="Collateral Size Determination" overflow="wrap" lineNumbers="true" %} ```solidity // Importing the required contracts and libraries import "@chainlink/contracts/src/v0.8/interfaces/AggregatorV3Interface.sol"; // Defining the contract for RDTN price oracle contract RDTNPriceOracle { // Defining the aggregator contract for RDTN price feed AggregatorV3Interface internal priceFeed; // Constructor function to set the RDTN price feed contract address constructor() public { priceFeed = AggregatorV3Interface(0x9326BFA02ADD2366b30bacB125260Af641031331); } // Function to get the current RDTN price in USD function getRDTNPrice() public view returns (uint256) { ( uint80 roundID, int256 price, uint256 startedAt, uint256 timeStamp, uint80 answeredInRound ) = priceFeed.latestRoundData(); return uint256(price); } // Function to calculate the amount of RDTN to be locked in collateral pool function calculateCollateralAmount(uint256 totalBondAmount) public view returns (uint256) { uint256 rdtPrice = getRDTNPrice(); uint256 collateralAmount = totalBondAmount * rdtPrice / 1e18; return collateralAmount; } } ``` {% endcode %} In this example, we are using the Chainlink AggregatorV3Interface to fetch the latest RDTN price feed data. We set the RDTN price feed contract address in the constructor function, and then define a **`‘getRDTNPrice()’`** function to return the current RDTN price in USD. We also define a **`‘calculateCollateralAmount()’`** function that takes the total bond amount as input and uses the RDTN price to calculate the amount of RDTN tokens that need to be locked in the collateral pool to back the bonds at a 1:1 ratio. This function will be called by the smart contract to determine the amount of collateral to be locked in the pool. We can further integrate these functions in our smart contract, along with other functions and workflows that we have discussed earlier, to create a fully functional Redemption Bonds system on the blockchain. # Management of Bonds How Will Redemption Bonds Be Managed? Although most of the work will be done by smart contracts a guild will be made to oversight the entire management process. Its members will be elected by Redemption Tokenholders and will consist of members who have expertise in bond management, finance, and blockchain technology. They will also oversee the automated monitoring system and will be responsible for adding more assets to the collateral pool if the collateralization ratio falls below the required level. The Redemption Bonds Guild will provide regular reports to the Redemption DAO and the Bondholders to ensure transparency and accountability. These reports will include information about the collateralization ratio, the amount of assets in the Redemption Treasury, and the status of outstanding Bonds. the Redemption Bonds Guild will play a critical role in ensuring that the Bonds are managed in a secure and responsible manner. They will work closely with the smart contracts to ensure that the Bonds are always backed by the assets in the Redemption Treasury and that Bondholders are able to redeem their Bonds at maturity. # Redemption of Bonds How Will Bonds Be Redeemed (Both Before and At Maturity) ### Before Maturity To redeem a bond before maturity, the bondholder will use the Redemption Bonds dApp, which will call the redeem function on the smart contract and specify the number of bonds they wish to redeem. The smart contract will then transfer the face value of the bonds to the bondholder's account and release the required collateral from the collateral pool. The formula for calculating the required collateral to release is: | requiredCollateral = redeemedBonds \* bondDenomination \* collateralizationRatio | | -------------------------------------------------------------------------------- | Where redeemedBonds is the number of bonds being redeemed. ### At Maturity To redeem a bond at maturity, the bondholder can simply hold onto the bond until it reaches maturity. At maturity, the bondholder will call the redeem function on the smart contract and the face value of the bond and Profits earned will be transferred to the bondholder's account. When a bondholder wants to redeem their bond at maturity, they can simply call the redeem function on the smart contract using dApp. The smart contract will then calculate the face value of the bond and the profits earned based on the bond's denomination and the maturity period. The profit calculation is based on a fixed rate of return for a fixed period. The smart contract uses a formula to calculate the profit based on the face value of the bond, the profit rate, and the maturity period. The formula for calculating profit is: | Total Transferable Value = Denomination \* (1 + Profit Rate \* Maturity Period) | | -------------------------------------------------------------------------------- | Where: **`‘Denomination’`** is the value of the bond denomination **`‘Profit Rate’`** is the fixed profit rate offered by the Redemption Bonds **`‘Maturity Period’`** is the number of days between the issuance date and maturity date
# Prize Pool Calculation The Bonds prize pool is funded by: * A portion of the tax collected on every transaction of RDTN tokens, * Returns from DAO investments, and * Unclaimed prize amounts from unwon lottery pools. Specifically, a certain percentage of the 3% tax collected on every transaction will be allocated to the prize pool, along with any unclaimed prizes from unwon lottery pools and returns from the DAO's investment portfolio. To calculate the prize pool for each bond issuance, we use the following formula: ***PC = (TC × P%) / 100 + RC + IC*** Where: **PC** = prize pool for the bond issuance **TC** = total RDTN transaction volume during the bond period **P%** = percentage of transaction tax allocated to prize pool (i.e. 15%) **RC** = unclaimed prize amounts from previous bond issuances **IC** = returns from the DAO's investment portfolio
# Burning The Bonds What Happens to The Issued Bonds After They Are Redeemed? After a bond is redeemed at maturity, it will no longer be valid, and the Redemption DAO needs to remove it from circulation to maintain the integrity of the system. This is accomplished through a process called "burning." The bondholder will initiate the process by calling the redeem function on the smart contract, which will verify that the bond is valid and has not been previously redeemed. The contract will then calculate the total amount to be paid to the bondholder, which will be the face value of the bond plus the profits earned. Once the total amount to be paid has been calculated, the smart contract will transfer the funds to the bondholder's wallet. At the same time, the smart contract will burn the redeemed bond. This is achieved through the use of the burn function in the smart contract, which will destroy the token and remove it from circulation. Burning is done by sending the redeemed bond to a specific address, often referred to as the "burn address." This is an address that is hardcoded into the smart contract and is not associated with any user or organization. Any bonds sent to this address are cannot be accessed by anyone. Any tokens sent to this address are considered "burned" and are removed from circulation permanently. The burn function works by subtracting the balance of the redeemed bond from the total supply of bonds. This reduces the number of bonds in circulation and ensures that the number of bonds in the pool always matches the number of assets held in the Redemption Treasury. The mechanism behind burning ensures that the supply of bonds is kept in check and prevents the dilution of the value of the bonds.
# Redemption Bonds Workflows Based on all the aforementioned specifications of Redemption Bonds, here is a graphical representation of Bonds Issuance, collateralization, & Redemption process.
| Reward Scale in Max Sale | Matching Numbers to win lottery's 1st Prize | Price per ticket | Lucky Draw Happens | No. of Lucky Draws Per Month | Max no of tickets that can be sold | Max Prize | Total Fee Collection |
|---|---|---|---|---|---|---|---|
| In Case | of Max | Sales | |||||
| 9 Times Investment | 1 | $100 | Every Day | 30-31 | 10 | $900 | $100 |
| 90 Times Investment | 2 | $50 | Every Day | 30-31 | 100 | $4,500 | $500 |
| 900 Times Investment | 3 | $20 | Every Week | 4 | 1,000 | $18,000 | $2,000 |
| 9000 Times Investment | 4 | $10 | Every Fortnight | 2 | 10,000 | $90,000 | $10,000 |
| 90000 Times Investment | 5 | $5 | Every Fortnight | 2 | 100,000 | $450,000 | $50,000 |
| TOTAL | 68-70 | $563,400 | $62,600 |
| Probability | To | Win | ||||
|---|---|---|---|---|---|---|
| 1 Digit Match | 2 Digit Match | 3 Digit Match | 4 Digit Match | 5 Digit Match | Overall Probability | |
| 1 Digit Pool | 1/10 | N/A | N/A | N/A | N/A | 1/10 |
| 2 Digit Pool | 9/100 | 1/100 | N/A | N/A | N/A | 10/100 |
| 3 Digit Pool | No Reward | 9/1,000 | 1/1,000 | N/A | N/A | 10/1,000 |
| 4 Digit Pool | No Reward | 99/10,000 | 9/10,000 | 1/10,000 | N/A | 109/10,000 |
| 5 Digit Pool | No Reward | No Reward | 99/100,000 | 9/100,000 | 1/100,000 | 109/100,000 |
| Pool Type | 1 Digit Match Winner | 2 Digit Match Winner | 3 Digit Match Winner | 4 Digit Match Winner | 5 Digit Match Winner |
|---|---|---|---|---|---|
| 1 Digit Pool | 100% | N/A | N/A | N/A | N/A |
| 2 Digit Pool | 30% | 70% | N/A | N/A | N/A |
| 3 Digit Pool | 0% | 30% | 70% | N/A | N/A |
| 4 Digit Pool | 0% | 10% | 20% | 70% | N/A |
| 5 Digit Pool | 0% | 0% | 10% | 20% | 70% |
# Why Participate in The DAO? * **Be the Owner:** DAOs are decentralized, meaning that they are not controlled by any one individual or entity. Every token holder has a say in the project proportional to the tokens held by them. So the more tokens you hold, the more voting power you have to manage the project. * **Community-driven:** Redemption DAO is run by RDTN holders, who work together to make decisions and execute actions, creating a strong sense of community and fostering collaboration. * **Governance:** Participants in Redemption DAO have a say in how Redemption is run and what decisions are made. This democratic governance model allows for a more equitable distribution of power and resources. * **Create Proposals For Change:** Token holders can create new proposals or vote on the existing proposals, created by someone else. Let’s say someone wants to introduce new integrations to the project for better performance of the project. All other token holders will get this proposal and each token holder can vote on the proposal. If a total of 51% votes favor a decision, that decision is final. # How DAO Voting Works ### Eligibility to Create New Proposals You need to have at least **1,000 tokens** to be eligible for creating new proposals. But you have a voting right even if you possess 1 token. **Note:** Some proposals for suggested changes may be subject to a technical/legal feasibility study before the actual implementation of such changes. ### How Redemption DAO Voting Works? 1. **Proposal Creation:** As a token holder, you have the power to create a proposal for the DAO. All you need to do is submit a clear proposal description. 2. **Proposal Submission:** After you create a proposal, it will be submitted to the Snapshot (i.e, DAO's voting system). This will make it available for voting, and the system will record it. 3. **Discussion Period:** After submission, the discussion period starts during which members can discuss the proposal and provide feedback. This period typically lasts for a predetermined period of time, such as days or a week. 4. **Voting:** Now, all token holders can vote for or against the proposal using their tokens. The more tokens you hold, the more votes you have. 5. **Quorum:** Once the voting period ends, the system will tally the votes and determine whether the proposal has been accepted or rejected. The proposal will be accepted only if the number of votes in favor exceeds a specified threshold, i.e. 50% of the total tokens. 6. **Reality.eth Check:** Once the vote has closed and met the minimum quorum, it's time to take action. Using the Snapshot UI, you can "Request execution" in the "SafeSnap Execution" window. This initializes the reality.eth Oracle. 7. **Execution:** Once the proposal has passed, Reality.eth question has been resolved, and the 24-hour cooldown period is over, the Snapshot interface will have the option to trigger each of the multi-send transactions in the proposal. The Gnosis Safe will then execute each transaction in the proposal sequentially. The execution of the New proposal has been described below in detail. ### Snapshot + Safe + Safesnap +Reality Redemption Treasury uses a powerful Gnosis Safe smart contract wallet with multi-signature (multisig) functionality. This cutting-edge solution puts the power in your hands, enabling you to veto malicious transactions with the support of 12 multisig owners. But that's not all. We've taken things to the next level with the integration of Gnosis Safe, Snapshot, and SafeSnap. With Snapshot, you can vote without worrying about gas fees. SafeSnap, on the other hand, is a Snapshot module that allows for on-chain execution of off-chain voting, giving you unparalleled control over the Gnosis Safe holding the Treasury funds. While Reality is a tool developed by Gnosis Guild that allows for on-chain execution based on the outcomes of events reported by Reality.eth. It enables proposal execution from Snapshot. Our team has thought of everything, including the proposals that call for payments from the treasury. These proposals must meet strict criteria, including filling out the "Transactions" container with information like transaction type, asset, recipient address, amount, etc. Once the vote has closed and met the minimum quorum, it's time to take action. Using the Snapshot UI, you can "Request execution" in the "SafeSnap Execution" window. This initializes the reality.eth Oracle and kicks off a bonded escalation game. By putting up a bond of 0.1 ETH, you can set the outcome and identify the passing result of the Snapshot proposal. The bonded escalation game has a 72-hour period, and anyone can challenge the outcome by putting up a bond double the size of the current one. If there's a challenge, the game restarts, and the 72-hour countdown begins. Once the reality.eth bonded oracle resolves in favor of the proposal, there's a Timelock period of 72 hours. During this time, the Redemption Network DAO Treasury multi-sig owners can veto malicious transactions in a 2-of-4 fashion, giving you ultimate control over your staking. After all the steps have successfully completed, the proposal will be executable, and new changes will take place in the project. # How Does DAO Treasury Work? DAO Treasury is the backbone of Redemption. It manages the entire financial system of the project. In order to ensure its longevity, Redemption has designed several income streams for the Treasury to strengthen its ecosystem. * 3% Tax on every transaction will be charged and these fees will be directed to the treasury. * A certain percentage of funds from any unwon lottery round will be added to the treasury. * The DAO will manage assets in the treasury and use these funds in profitable ventures to generate more profits. These profits will also increase the Treasury value over a period of time. * 10% Fee from every ticket sale will be collected in the Treasury which adds significant funds to the treasury. * In case of a need for emergency funds, the DAO can issue a limited amount of tokens at discounted rates to fund its operations without affecting the token price in the exchange.