Gold Standard DAO V2

Self repaying loans through derivative tokens backed by stable assets.

Abstract

Gold Standard DAO is a platform for users to unlock future yields now using your gold.

The creation of synthetic tokens that users can acquire for no cost in exchange for locking collateral in the Gold Standard DAO protocol. It gives users the ability to get an advance on their future yield immediately. These Synthetic Tokens are a powerful DeFi primitive and a new way to make derivatives based on yield instead of debt.

We aim to supply synthetic assets using collateral supplied by users without having the possibility of liquidation.

Why Gold and Decentralised Finance?

Traditionally, gold is an asset class where people store in secure vaults to gain its long term appreciation of value in terms of dollar and buying power. When we are able to create synthetic assets using the technology of what the blockchain has to offer. Liquidity is freed up instantly, in turn users can do more with the excess liquidity in the form of tradable gsTokens. When a synthetic asset is traded at the value to its underlying asset, in theory no liquidation can occur.

Decentralised / Open Finance

The set of lending, borrowing, trading, and derivatives applications on the Ethereum blockchain is commonly referred to as “DeFi.”. At its most basic level, users post collateral or liquidity in order to gain yield on their assets. Some just supply liquidity and are fine with interest rates or fees generated by their deposits, while others take a more active strategy by leveraging their positions or buying options. However the transaction fees on Ethereum do not allow users to profit from this efficiently.

Lending Platforms

In 2018, Compound launched the first of its kind algorithmic money market. Users deposit into it and immediately earn interest, which is paid by other users who borrow the liquidity in the system. They further innovated by tokenizing the deposits by making cTokens, which allow you to have an interest earning token you can freely transfer.

A few other algorithmic money markets have also been built out, most notably AAVE. AAVE especially has innovated with their flash loans, credit delegation, stable borrowing interest rates, and the ability to use a broad selection of collateral types. Furthermore, since now there are several lending and borrowing markets, yield bouncers have been built that move your deposits across protocols to achieve the best possible yields.

Yield Farming

Recently, the “Yield Farming” trend has gained popularity. DeFi protocols are incentivizing liquidity and certain user behaviour by offering rewards in the form of their governance token. This idea was started by the popular synthetic asset application, Synthetix, as a way to incentivize creation of Synths and to provide liquidity bridges into and out of their system.

Then, the trend hit a tipping point when Compound incentivized lending and borrowing by rewarding their COMP token. Surprisingly, these governance tokens have achieved high valuations, so if one factors in the price of the governance tokens they receive, their yield jumps dramatically, often to 20% or higher APY. The second order effect of this is that lending and borrowing demand and rates have increased along with these incentives.

The ensure GSD has actual intrinsic value, users will have percentage of protocol fees and has the right to shape the direction of GSD determined by votes.

Summary

GSDAO V2 lets you reimagine the potential of DeFi by providing highly flexible instant loans that repay themselves over time.

GSD the governance token will earn protocol fees and shape the future of GSD

No liquidations, your only debt is time.

This GSD V2 protocol will be available on Avalanche as part of the new defi legos offering synthetic tokens backed by real assets. We are unlocking the power of defi with gold assets, crypto traders have the option to hedge their portfolio into gold while enjoying what defi has to offer.

All shall prosper!

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