Like Bitcoin, Daffy’s ambition to create a fully decentralized global network is the core source of its revolutionary features – that of being trustworthy and enabling arbitrage. These are the two characteristics that form Defy’s core value and determine its long-term market development. It is easy to see why this is so:
- On the one hand, the main model of any Defy project must be zero-centric in order to have unlimited trust to demonstrate the value of a decentralized network beyond the market value of a single product or a brand.
- On the other hand, in order to compete with centralized products and maintain its most important competencies, a decentralized network must also mediate.
A non-cooperative network is an inherently robust decentralized network model. Shield Is building a decentralized non-cooperative game theory-based, derivatives trading network consisting of traders, dual liquidity pools, liquidators and brokers.
Shield decentralized network based on non-cooperative game theory
Non-cooperative game theory was first proposed by John Forbes Nash in 1950, which described a multiplayer game system that is not limited to two people (ie, a zero-sum game) and which is called “Nash equilibrium. “Is stable after receiving. Prior to the birth of blockchain, most of the governance systems of human society, including banks, exchanges, Internet leaders and social institutions, were based on the zero-sum game. The Zero-Sum game system pinned its hopes of giving some centralized parties the mandate to quit organizational tasks, or to deal with the decay.
However, a governance system based on zero-sum games is an unstable structure that moves left or right as the power of the sports teams changes, a structure that determines the convergence of power from the very first day into the strongest. The side of the game leads to repeated collapse and reconstruction of the system. The Shield protocol is one such non-cooperative game network, as shown in this graph:
Shield’s decentralized network is maintained by four major components: Broker, Private Pool LP, Public Pool LP, and Liquidator. Transmission is executed through the Governance Token – SLD.
Broker (responsible for getting into trades): Consists of 4 levels, where traders are introduced to the network through competition to earn commissions, with different commission rates for different levels. C and D levels will carry 10% and 20% commission rates to the prize pool respectively. Every 30 days, 60% and 40% of the reward pool will be split evenly between A and B brokers, and the rankings will be reset based on the latest rankings.
Private Pool LP (Order Seller): An address is shown for a private pool, in which each private pool is competing with each other to provide liquidity (competing to become an option seller) to earn funding fees. SLD Award for taking more liquidity for.
Public Pool LP (Backup Pool): An integrated large liquidity pool that earns liquidity mining rewards by competing to provide guaranteed liquidity.
Liquidators (provide liquidation): Compete to perform network liquidation operations and earn liquidation awards.
Each aspect of the network has a clear interest incentive and an adequate competition mechanism, so they all meet the needs of the network to their advantage. They thus reach the optimal Nash equilibrium of the entire network to maintain decentralized security and network stability.
Dive into Tokenomics for long term value
The key to a decentralized and stable network is to provide adequate and appropriate incentives to each player who maintains the network through the value vehicle of the token.
The Shield has prepared the following mining incentives for public pool LP, private pool LP and network maintaining liquidators:
- Reserve liquidity mining: Each block that provides liquidity to the public pool will be rewarded with “liquidity share * 32” in the SLD.
- Liquidity mining order: Liquidity from private pools or public pools will be rewarded with an SLD of “order funding fee * 30% / 0.05” upon taking the order.
- Liquidation Mining: Liquidators will receive SLD liquidation compensation reward of “with liquidation” Ether System Gas Charge * 150% / 0.05“(In the case of insufficient system funds) as well as liquidation competition SLD reward.
The mining award will be halved for every 20% of the remaining mining share.
The shield generates a buyback value by always maintaining 10% of the total SLD equal to 100% of the value of the buyback pool (derived from 90% of the transaction fee), while the mined SLD is redeemed by swap and burn contracts Goes (as shown above).
When the secondary market value of SLD is higher than the current swap price, the value of the swap and burn pool will continue to increase, as no one will swap.
When the secondary market price falls below the current swap price, one can buy SLD on the secondary market to earn the difference from this swap and burn pool, thus ensuring a minimum price in the secondary market price (this is the minimum price Is similar to price in stock) valuation through PE valuation).
While with the development of the business model, transaction fees increase to the left of the swap and burn pools, the right portion of the SLD pool will become half of the barn and mining rewards. Therefore, the value of SLD will continue to increase in the long run.
Shield is the first decentralized derivative network with non-cooperative game theory. Every player who helps to maintain the network is fully encouraged. And the redemption of tokens is accomplished through an innovative Swap & Burn model. Under the logic of uncapped business growth, ie the uncapped increase in the value of swaps and burns and the continued deflation of passes used to capitalize, as they are destroyed and mined in half, Shield’s original token, The value of SLD has long term value potential. .
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