|0029||Transfer of SOV Pursuant to SIP-0015||Armando||Ready to vote||Treasury||2021-09-08|
SIP-0015: Sovryn Treasury Management (link provided here) approved an operating budget of 5,639,130.56 SOV to be made available to the Exchequer Multisig. This budget is intended to be drawn from three funds: the Ecosystem Fund, Adoption Fund and Development Fund. SIP-0015 resolved that the transfer of SOV requires additional and separate SIPs. This SIP will facilitate the transfer of a total of 1,050,000 SOV from the GovernorVaultAdmin contract, to the Exchequer Multisig. The SOV to be transferred is drawn from the Ecosystem Fund and Adoption Fund, as outlined below:
|Contract Name||Contract Address||Vesting||Total Amount (SOV)|
|0028||Add SOV as collateral for borrowing||John Light (@john-light)||Ready to vote||Parameter||2021-09-03|
If approved, this proposal would enable SOV holders to use their SOV as collateral when borrowing using Sovryn.
Adding SOV as a collateral asset in the loan protocol would give SOV holders a way to gain liquidity from their SOV holdings without having to sell their SOV. A side effect of this is that it would enable SOV holders to go "leverage long" SOV by borrowing against their SOV collateral and using the proceeds of the loan to buy more SOV.
A 300% collateralization ratio is proposed due to the relative immaturity and volatility of SOV as an asset. This is compared to the 150% collateralization required when using RBTC as collateral.
Add SOV as system-wide collateral for borrowing any asset supported on Sovryn, with the following parameters:
If approved, this proposal will:
The remaining staking duration at any time defines the height of the annual interest rate (APR). The rewards will accrue using the voting weight formula, which means that the APR decreases over time in a quadratic fashion if the stake is not extended. The voting weight formula is explained on the wiki.
The maximum APR will be set to 29.75%. This APR is used for the maximum staking duration of 1092 days. 28 days later the APR decreases to 29.73%, 1 year later to 26.78% until only two weeks are remaining, with an APR of 3.66%.
This setting leads to an average APR of 21% over 3 years, where the return on average is:
These numbers can also be seen here.
Stakes can be extended at any point in time, restoring a higher APR, as long as the rewards program has not yet been cancelled by the Exchequer. After the reward program is stopped by the Exchequer, extensions of the stake will no longer increase the APR.
In the case that a user stakes longer to get a higher APR without having the intention to actually leave the tokens staked for that long, they would be subject to slashing penalties when withdrawing early according to the quadratic formula which also defines voting power, and the losses due to slashing penalties would outweigh the gains made through the higher APR.
The calculated APR's are designed to always deliver a higher rate of return than unstaking early and paying a slashing fee would earn, based on this slashing fee table on the wiki.
Example: If a user stakes for 3 years and unstakes after 1 year, they gain 28.81% in interest, but lose 27% through slashing. The user gained 1.81%, but this is less than the the gains for simply staking for one year from the beginning (11.19%).
Current SOV being Staked (user-initiated): ~1m (20% of circulating supply)
Current SOV Circulating Supply: ~5m
If we assume that all ~1m stakes for the maximum period and extend their stake each year to earn 33.06% per year, ~330k SOV would be distributed in interest per year (27.5k SOV / month) which is less than .5% of the circulating supply per month.
If the amount being staked doubles during the initial period of the reward program utilizing 1% of the circulating supply to continue incentivizing staking by choice would still be relatively insignificant when considering the total supply of 100M SOV and the total supply of the SOV Adoption Fund (38.5M).
|20||Staking contract updates||James Howlett (@jameshowlett977)||Ready for vote||Contract||2021-06-07|
If approved, this proposal will:
Fixing staking contract bugs
There are two main issues with the staking contract that are fixed by this SIP:
If a user stakes SOV until date
x, withdraws their SOV, then stakes SOV again until date
x, they will not be able to perform any of the expected functions on their staked SOV (e.g. extend staking, delegate staking, or withdraw staking).
For users who have more than one transaction adding to their vesting contract, the vesting contract is skipping a staking period when calculating the amount available to withdraw. If for example a user stakes on June 1 for a duration of two staking periods ending on June 29, then the vesting contract will only count the second staking period as being available for withdrawal.
Improving management workflow of team vesting contracts
To improve the management workflow of team vestint contracts, Exchequer needs the ability to invoke the
governanceWithdrawVesting function. This will be used in the event that a team member resigns or otherwise requires to have the remaining SOV withdrawn from their vesting contract before the full vesting period as elapsed.
|19||Exchequer Committee 2021 Budget||Max Shapiro (@maxshapiro23)||Ready for vote||Treasury||2021-05-31|
The Exchequer Committee has approved the following budget through the end of the calendar year which will be paid from Sovryn’s Treasury to accelerate the development and growth of the application in alignment with the Sovryn Roadmap published in the Black Paper in January 2021.
Contributors (please note that the below figures are represented on a monthly basis)
It should also be noted that there are roughly 70 active contributors across all 5 circles and roughly 40 open positions currently available.
Other Expenses (please note that recurring figures are represented on a monthly basis)
Excluding one-time expenses, the budget proposal is for $872k in recurring monthly expenses of which 2/3 is being spent on contributors. This monthly figure annualized comes to ~$10.5m on a recurring basis, if we include one-time expenses then the annualized figure is ~$11.6m.
It should also be noted that it is Sovryn’s intention to come in well below budget at the end of the budget period, December 31, 2021. Prior to the end of this budget period, the Exchequer Committee will submit an additional budget SIP to Bitocracy for calendar year 2022.
Sovryn’s treasury is held primarily in Bitcoin with a current USD equivalent of balance ranging from $15-20m. This does not include SOV that can be used as compensation for contributors or payments for service providers. Conservatively speaking, Sovryn’s treasury (excluding SOV considerations) would provide for 2+ years of runway which the Exchequer Committee believes is sufficient in order to fully develop the platform broadly in accordance with the Black Paper.
|0018||BabelFish Token Sale via Origins||Dark Knight (@dolarcripto)||Ready for vote||Other||2021-05-12|
I hereby submit this SIP to leverage the upcoming Sovryn Origins platform as a launchpad to do the first token sale in Sovryn for BabelFish. We see the Origins platform as the first Bitcoin layer-2 IDO platform, and would like to follow in Sovryn’s moon boot footsteps to showcase this, ideally setting a precedent for future teams seeking to launch Bitcoin DeFi projects.
No platform exists today to support projects seeking to launch DeFi projects on Bitcoin. Sovryn is uniquely positioned to provide this launchpad as demonstrated by the successful Origin sale of SOV. The intention of putting forth this SIP for a Bitocracy vote is to permit BabelFish’s use of the Origins platform to perform a token sale. (Additional details about the Sovryn Origins platform will be released by the Sovryn team at a later date.)
If this vote passes and BabelFish conducts a successful token sale, it would demonstrate the Sovryn Origins platform’s capability to serve as a launchpad for future Bitcoin DeFi projects.
This could bring an inflow of innovative decentralized product experimentation to be bootstrapped on Sovryn and initiate a virtuous cycle of innovation and a flywheel effect for SOV.
BabelFish aims to be the first money lego built on Sovryn with the mission of bringing deep stablecoin liquidity to the ecosystem. This will also be convenient in terms of UI/UX inside Sovryn’s portfolio, as users won’t have to choose between a growing myriad of USD-pegs, instead, all USD-pegs can be deposited and withdrawn 1:1 via a single xUSD.
The purpose of FISH tokens is to jumpstart its DAO. This is a collective experiment to remake and decentralize money and needs to be managed by an active community of participants akin to the example being set by Sovryn. For a comprehensive view of BabelFish’s token emission schedule, see here (subject to change).
We propose a capped initial token sale of 12.5% of the FISH supply. In addition, Sovryn will receive 2.5% to provide liquidity to the DAMM, and 1% will be airdropped to stakers pro-rata. Ultimately, stablecoin users who use BabelFish to bring liquidity to Sovryn will also earn FISH rewards for governance.
Token Sale Day One (Exclusive to Premium BCW members):
FISH price: $0.11
Tokens for sale: 32,508,000
Percent of supply: 7.74%
Vesting: 10 months linear
Wallet limit: $2,000
Token Sale Day Two (Public):
FISH price: $0.18
Tokens for sale: 20,000,000
Percent of supply: 4.76%
Vesting: 10 month linear with 50% immediately vested
Limit per wallet: $3,000
Airdrop to Sovryn’s Governance Stakers:
1% pro-rata to fully-vested SOV stakers by voting weight
Vesting: 10 month linear with 50% immediately vested
Listing on Sovryn AMM:
Tokens for Sovryn: 10,500,000
Percent of supply: 2.5%
Pool to be created: FISH/RBTC
|Token Sale Day One (limited to list of whitelisted wallet addresses)|
|Start Time: June 21st, 12:00 UTC|
|End Time: June 23rd, 12:00 UTC (or when all tokens sold)|
|Tokens for sale: 32,508,000 (7.74%)|
|Maximum purchase: $2,000 (in rBTC)|
|Token price: $0.11 priced in rBTC June 20th|
|Vesting: 10 months linear|
|Token Sale Day Two (Public)|
|Start Time: June 24th, 12:00 UTC|
|End Time: June 26th, 12:00 UTC (or when all tokens sold)|
|Tokens for sale: 20,000,000 (4.76%)|
|Maximum purchase: $3,000 (in rBTC)|
|Token price: $0.18 priced in rBTC June 20th|
|Vesting: 10 month linear with only 50% immediately vested|
Money on Chain (MOC) is an RSK-based DeFi platform with a stablecoin (DOC), HODL token (BPro), orderbook DEX (TEX), leveraging mechanism, etc. which empowers Bitcoiners to improve the performance of their assets while also retaining full control of their private keys. Money on Chain has two tokens listed on the Sovryn DEX: DOC, a Bitcoin-backed stablecoin, and BPro, a token for capitalizing on Bitcoin’s volatility.
The $MOC token brings governance to Money On Chain’s self contained protocol which includes DOC (the first USD stable coin collateralized with Bitcoin), BPro (a HODL and earn token with unique benefits), BTCx (an amplified leveraging mechanism), and TEX, a decentralized orderbook exchange.
The MOC token enables:
Vote and Veto of platform updates and parameters.
Staking for rewards and fees from users of the platform.
Discounts when paying the fees with MOC.
Money on Chain is a partner project of Sovryn. Two of its products, the DOC Bitcoin-backed stablecoin, and BPro, a token designed for BTC holders that allows users to earn on their Bitcoin position, are already listed on the Sovryn DEX.
Incorporating Money on Chain’s DAO token, $MOC, will further align both initiatives in bringing more DeFi products and features to Sovryn users.
DOC is a decentralized Bitcoin-backed stablecoin with greater permissionless features than that of USDT, making it deserving of incentivization for liquidity on Sovryn.
The goal is to incentivize $1.5M USD in DOC across the DOC/RBTC AMM pool as well as the DOC lending pool.
Exchequer to budget and manage the resources to list MOC on the Sovryn DEX. Token contract address:
Exchequer provides 2.5 RBTC in liquidity to the RBTC side of the MOC/RBTC AMM pool for a duration left to the discretion of Exchequer.
Exchequer to retroactively reward $37,500 USD worth of SOV to DOC lenders over a 30-day liquidity mining event.
The Origin Vesting contracts have cliff is incorrect, leading to the Vesting contracts to pass incorrect dates to the Staking contract. This results in Origin token holders being unable to claim their SOV. Origin Vesting contracts aren't upgradable. Therefore, we need to update 2 functions in Staking contract:
withdraw. Dates passed to these functions will be adjusted (only for incorrect dates) to the end of the current 2 week period (March 26, 2021 10:28:15 AM for Origin Vestings).
|15||Sovryn Treasury Management||Edan Yago (@YagoBit)||Ready to vote||Treasury||2021-03-22|
The Sovryn treasury (which includes BTC raised, the development fund, the ecosystem fund, and the adoption fund) is of critical importance for the success of the Sovryn project. It is most important now, in the bootstrapping phase of system development. Funds use may include, but is not limited to:
Each of these needs can change rapidly from day-to-day and effective deployment of funds requires that highly informed decision makers can make decisions rapidly. These types of decisions can not be made effectively by Bitocracy. If each decision must be voted on, there may easily need to be several votes per day, which is simply not practical. If we wish to make effective use of the protocol treasury, we need an alternative - in the long term and most certainly in the short term. We propose a Treasury Committee - hereafter referred to as the Exchequer in honor of the Bitcoin genesis block quote.
Under this proposal, a seven-member (chancellors) Exchequer Committee is formed. The Exchequer Committee will work on the following:
We envision that in the near future the Exchequer Committee may transition from multisig governance to a formal trust/foundation entity subservient to the Bitocracy.
We will need to experiment to figure out the right balance between managerial effectiveness and community control. The primary benefit to having an Exchequer Committee is the ability to make treasury decisions and manage budget on a day-to-day basis. Attempting to manage day-to-day activity via the Bitocracy system would be impractical. A secondary benefit of the Exchequer Committee would be having a dedicated team, who are well informed, able to budget, monitor, audit and execute use of funds.
The Exchequer Committee is to be given full latitude and discretion to make use of treasury funds within the Sovryn protocol for the purposes of liquidity provision and balancing for the Sovryn protocol. That is to say, the Exchequer Committee may freely move the funds in any way the committee sees fit between smart contracts that are part of Sovryn or multisig addresses approved by Bitocracy.
Further, the Exchequer Committee should have full discretion to transact up to 10% of the treasury funds with external systems for the purpose of arbitrage and balancing of prices within the Sovryn protocol.
The Exchequer Committee will manage a quarterly budget that will include anticipated budgeting for core team contributors. The top-level amount will be approved by Bitocracy. The Exchequer Committee will have full discretion of distribution of those funds within the bounds of that budget. The committee will provide full transparency on the use of funds to the team level (eg. dev team) but will not provide transparency to the individual level due to privacy concerns. Due to the immediate necessity of availability of the funds outlined in this SIP, it is proposed that the Exchequer Committee have one month to present a 12 month budget for approval, and in the interim period, the Exchequer Committee will have the mandate to utilize up to 10 BTC from the Sovryn treasury for ongoing expenses. A full accounting of these expenses will be presented as part of the overall budget.
Paying contributors and other operational expenses via a multisig is not practical. There are potentially hundreds of transactions required every month. The overhead involved in managing this with multiple signatories cannot be managed. Currently, these payments are being made on behalf of the protocol by a UK Limited company (1A1Z Limited) of which I am a director. I propose that we continue to use this service to the extent possible, until such time as a trust/foundation can be set up (as described below).
The Exchequer Committee will have the mandate to allocate certain SOV holding as further described below. A full accounting of these holdings, their source and vesting schedule is detailed in Schedule A to this proposal and is based on the predefined emission schedule of SOV as outlined here.
The Adoption Fund has a predetermined vesting schedule. The SOV that vests will be distributed to the treasury. The Exchequer Committee will have discretion on use of these funds for the first quarter with the condition that any allocation of such funds be subject to the Adoption Fund vesting Schedule as defined in Schedule A, and will be responsible for developing a formalized or programmatic policy for the second quarter.
The Ecosystem fund has a total of 250,000 SOV available for distribution, which are not subject to a vesting schedule. The Exchequer Committee will have the mandate to allocate these funds in accordance with the commercial needs of the Sovryn protocol.
Like the Adoption Fund, the Development Fund has a predetermined vesting schedule. Similar to what has been proposed for the Adoption Fund, the Exchequer Committee will have discretion up to this limit for the first quarter, with the condition that any allocation of such funds be subject to the Adoption Fund vesting Schedule as defined in Schedule A.
Approximately 2.1M SOV are currently held by the Protocol for programmatic sales. At this point I believe that the Bitocracy, and not the Exchequer Committee, should manage use of these funds.
The initial membership of the Exchequer Committee will be comprised of:
Core Team Leadership
Early Funders and Advisors
I see these as currently the most involved and informed members of the community. I am confident that they will not abuse (to the extent it might prove possible) the limited remit that membership in the Exchequer Committee entrusts them with.
I propose myself, since early on I decided to make my involvement publicly known and have my reputation on the line. I think I am well informed as to the state and needs of the project.
Exchequer Committee meetings should be behind closed doors as they may often need to deal with sensitive information. Committee meetings should be recorded and transcripts released at the end of each quarter. Any information that may remain sensitive, in particular, information that may doxx a participant, should be redacted.
This should remain the structure until such time as a legal trust or foundation - legally subservient to the Bitocracy - may be established. It is expected that this may take 2-3 months. At such time, the Exchequer Committee should be reconstituted under the auspices of the trust/foundation.
I will not go into detail here about the benefits of a trust/foundation. Suffice to say that it will allow more transparency and easier interaction with the non-decentralized world. However, this is a question that can be examined in more detail in the future.
I anticipate that there may be several objections that can be leveled at this proposal. Here I attempt to address these concerns.
Objection: This goes against the idea of users having Sovryn control of funds.
Response: The funds the Committee will manage are not user funds. They do not belong to any person and are the endowment of the protocol itself.
Objection: This structure is not decentralized enough.
Response: Decentralization is not a goal. It is a tool. The purpose of decentralization is to create a censorship resistant protocol. The Committee will have no powers of censorship, except over the treasury itself. This is a worthwhile sacrifice, as having all control require Bitocracy will lead to inadvertent censorship of treasury use, since the Bitocracy cannot scale to the level of day-to-day involvement required for the projects success.
Objection: This proposal requires a high degree of trust in the Committee.
Response: I think it is easy to overstate the degree of trust required.
Objection: This proposal does not provide enough checks and balances.
Response: It is hard to say what amount of checks are "enough". What is clear is that more checks mean less dynamism. With that in mind, I suspect that the reality is that there are too many checks and balances. Sovryn has taken a much more radical approach to decentralization than almost any other peer project. We must acknowledge that in the short-term, this places Sovryn at a disadvantage. There is no leadership that can unilaterally make decisions. There is no equivalent to Binance's CZ. This proposal seeks to strike a balance between competitiveness and pure Bitocracy. The best way to learn how to improve this balance is to learn by doing.
Bitocracy delegates to the Exchequer Committee the authority to direct the use of treasury funds held in all multisig wallets approved by Bitocracy under the following conditions:
An operations budget of 5,639,130.56 SOV shall be available to the Exchequer Committee subject to the vesting outlined in Schedule A, for a period of three months from the date of the approval of the SIP.
The Exchequer Committee shall present a 12 month budget to Bitocracy within one month from the passing of this SIP. The Exchequer Committee may expend up to 10 BTC until the budget is approved by Bitocracy.
The Exchequer Committee will publish high level monthly and detailed quarterly reports detailing the use of funds.
The Exchequer Committee will publish transcripts from its meetings at the end of each quarter. These transcripts may be redacted to protect sensitive information.
|Contract Name||Contract Address||Vesting||Month 1||Month 2||Month 3|
|Exchequer Multisig||0x924f5ad34698Fd20c90Fe5D5A8A0abd3b42dc711||No vesting||30,046.79||-||-|
Changes described to Adoption Fund, Developer Fund and GovernorAdmin Fund will be executed as separate SIPs.
More information about the Sovryn contracts can be found here.
|14||Strategic Investment||Anthony Pompliano||Ready to vote||Treasury||2021-03-22|
A syndicate of strategic partners, led by Anthony Pompliano (Pomp) proposes to acquire 1.5m SOV and to join the Sovryn community. The syndicate proposes to provide capital to the Sovryn treasury, run SovrynBTC nodes, and provide broad strategic assistance to grow the Sovryn ecosystem.
I have been writing and tweeting about the idea of decentralized finance on top of bitcoin for years. I have noticed that while bitcoin is decentralized money, most of its existing infrastructure is centralized. In comparison, Ethereum and other smart contract platforms have decentralized infrastructure, yet their core assets are not based on sound money principles.
Due to this analysis, I have always believed that the bitcoin industry would eventually have to bring decentralized sound money and decentralized infrastructure together. While some people want to bring bitcoin to Ethereum via tBTC or WBTC, I have been a big believer that decentralized infrastructure will get built on top of, and around, bitcoin.
After evaluating many of the projects in the space, I am excited about the prospects of Sovryn and believe that the team and community has a high probability to build one of the core decentralized infrastructure stacks to ensure that bitcoin remains decentralized, sovereign, and aligned with the original bitcoin ethos.
I, and the rest of the syndicate, want to help make this goal a reality. Beyond capital, we hope to contribute a diverse range of expertise and resources to the Sovryn mission.
Simply, bitcoin is too important to the world. There must be decentralized financial applications and services built to empower users with the full promise of the digital currency. We must build this together.
Strategic Investment Structure
Bonding of SOV
One of Sovryn’s biggest needs right now is BTC liquidity. This problem will be at least partially solved by SovrynBTC, a collateralized two-way bitcoin peg that is currently under development. The SOV acquired by the syndicate will be bonded as collateral for the SovrynBTC bitcoin peg, subject to the vesting period. This will ensure that users can peg their bitcoin for use within the Sovryn protocol.
Rapid growth of the kind Sovryn is experiencing brings with it many challenges as well as opportunities. There is a need to scale the team and organization, grow the marketing and user base, introduce new products all while maintaining focus. The syndicate includes many successful entrepreneurs who have experience managing exactly these challenges and can help the community and team navigate these challenges.
Decentralization and Nodes
The syndicate will contribute to maintaining the decentralization of the Sovryn protocol by running nodes and participating in multisig schemes when required.
The syndicate includes several leading cryptocurrency exchanges, who wish to list SOV and other tokens related to the Sovryn ecosystem. In doing so they can help introduce their users to Sovryn and help provide liquidity, trading venues, and price feeds that can be consumed by oracles integrated with the Sovryn platform.
Bitcoin Miners and Mining Pools
Bitcoin miners provide security to the Sovryn protocol. As part of the syndicate miners and mining pools will help maintain a close relationship and understanding between the bitcoin mining community and the Sovryn developer community.
Capital and Liquidity
The syndicate investment will provide additional capital for the Sovryn treasury to support the growth of the ecosystem. In addition to this capital, many of the syndicate participants will seek to provide support liquidity and arbitrage to maintain deep markets and robust pricing in the Sovryn platform.
Awareness Reputation and Monitoring
The participation of the syndicate will help cement Sovryn's position as the "blue-chip" operating system for bitcoin DeFi and the financial OS of the future.
The syndicate members have between them a broad network of strategically important companies, organizations, and institutions. Additionally, their collective audiences number in the many millions. This network and audience will be exposed to Sovryn, helping to accelerate awareness and adoption of the protocol.
As a community-driven and open source project, Sovryn must gain the trust of users of all types - from individuals to other DeFi projects to institutions. The high profile reputations of the syndicate members will help assure users and partners that the Sovryn protocol can be trusted. Syndicate members will be actively engaged in the project and help monitor its activity and development, acting as eyes and ears for the wider community.
The syndicate is led by Anthony Pompliano, better known as Pomp. He has built a portfolio valued at more than $500 million across the crypto industry and also runs the largest content platform in the space. Pomp not only brings years of experience as an operator, but he has a track record of investing early in many of the largest, most successful companies and products in crypto.
Pomp’s unique combination of capital and content brings legitimacy, stability, and attention to the Sovryn project. He is able to decrease user acquisition costs, drive mainstream awareness, and help recruit strategic investors or community contributors.
Other organizations and people in the syndicate include some of the world’s largest crypto exchanges, market makers, investors, and research entities. Each of the participants in the syndicate are nominated by Pomp and vetted by Sovryn’s core team. They bring unique expertise that has strategic value to Sovryn and the community.
We recently reactivated an improved version of FastBTC to allow for quick and simple user onboarding. At this point, FastBTC is limited to 0.01 BTC per transaction, because of missing liquidity. It is proposed to transfer 100 BTC from the Origin BTC Multisig Wallet through the RSK 2-way-peg onto the RSK chain. The funds are to be held by the Exchequer Multisig Wallet and supplied to the FastBTC contract in batches as liquidity requirements rise.
The FastBTC contract is a very simplistic, non-upgradable contract. It just knows 2 roles: owner and admin. Both can withdraw funds from the contract. The owner can additionally replace the admin. The Bitocracy is acting as the owner and a 3 out of 5 multisig is set as admin (0x0f279e810b95e0d425622b9b40d7bcd0b5c4b19d). The key holders are active team members (whose tokens could be slashed by the Exchequer multisig in case of misbehaviour) and early funders. 4 of the addresses have been set already and a 5th address is going to be added within the next week:
Incoming BTC are being held by a multisig with following keyholders:
For each user a unique deposit address is derived from this multisig. If liquidity on RSK is running low, the funds need to be transferred via the RSK 2-way-peg in order to refill the contract.
Because of the way the RSK 2-way-peg is designed, the multisig cannot send the funds over the peg directly, but we need to use a single private key. This means that for a time period of 24h the assets to be transferred are being controlled by a single person. This is why the amount is to be transferred in batches and the person(s) in charge should be slashable by governance in case of misbehaviour (and therefore have enough at stake).
Providing liquidity for FastBTC is not just substantially improving the user onboarding process, but also a lucrative business for the protocol, because fees are generated on each transfer. The fee is currently set to 5000 sats but is subject to change based on market conditions
The current Staking contract’s
stakeByschedule function, used by the current Vesting contracts, only allows staking for a minimum of two intervals with 4 weeks in-between. Therefore, the current Staking contract cannot be used with a Origin Presale Vesting contract.
Immunefi proposes the creation of a bug bounty program, to be funded by the Sovryn treasury, to incentivize the discovery and discreet disclosure of vulnerabilities in specified parts of the Sovryn platform.
Immunefi is a bug bounty platform focused around cryptocurrencies created with the intention of preventing catastrophic hacks around the space and making security more accessible. It offers this service with a pure performance fee basis with no costs related to onboarding, maintenance, or other modifications, nor requires any deposit to our wallets. With a bug bounty program with high enough bounty payouts, Immunefi believes that it can even economically incentivize black hat hackers to disclose a bug instead of exploiting it, due to the difficulties associated with dealing with stolen funds. In addition to the bug bounty platform, Immunefi also offers premium bug report triaging and management, leveraging its expertise to handle the bug report management process.
Immunefi has a growing community of white hat hackers that have been successful in finding, disclosing, then assisting to repair catastrophic vulnerabilities, including one which got covered on CoinDesk, leading to a positive reputation boost for the project as well as increased confidence in the platform by the community.
The Sovryn bug bounty program will be focused around its smart contracts and app and the prevention of the loss of user funds, either by loss of access or by direct theft, as well as accessibility to the app. A full list of what will be covered is listed under Assets in Scope. Upon the advice of the Sovryn team, this list may be expanded to further secure other assets.
During the initial phase of the bug bounty program, the program will add bonuses to the payout amount for bugs reported within the bonus period as well as will work with Sovryn to provide NFT rewards for validated Critical and High level bug reports.
Immunefi will also provide its premium bug report triaging and management service and thus handle and receive all bug report submissions, freeing up the Sovryn team to focus on other tasks while only having to deal with bug reports that have been validated by the moderation team as well as not have to worry about spending time interacting with the bug reporters themselves. Full coordination with public relations with regards to recognition of a patched vulnerability that was due to a bug report through Immunefi will also be provided. However, though the moderation team will provide its recommendations, the final decision on the severity level and the payout will be with the Sovryn team itself.
For the bug bounty platform itself, Immunefi will only take a 10% fee on top of the reward paid out to the bug reporter after Sovryn has sent out the reward. This fee will not reduce the reward the bug reporter receives and they will receive the full displayed amount.
For the bug report triaging and management service, it will start at the current experimental rate of USD 1000 per month for the first ten submitted bug reports of that month, with a succeeding addition of USD 1000 per month for another 10 bug reports consumable for the same month, for every time it goes above the allocated number of reports. These fees however, are payable in BTC. If a month has less than or equal to three bug reports in a given month, there will not be a fee charged but instead the total will be carried over to the succeeding month. Additionally, if the tranche of 10 is completed and another tranche is started, but the number of bug reports is less than or equal to 3, that total is carried over to the succeeding month and the initial month only gets charged USD 1000. If a month has 0 bug reports, there is no fee charged. In addition to obvious unacceptable reports, such as UX issues, feature requests, documentation errors, typos, copyright date issues, and out-of-scope reports (including those that at first glance are not within a paid tier of vulnerability severity), all incomplete reports are not counted until a reviewable report is sent.
To keep costs under control, a group will be set up on Keybase (or Discord if preferred) for active communication regarding the bugs that are being submitted so we can quickly make adjustments as needed (e.g pausing web/app bug reports, having some reports just go directly to the Sovryn team, etc.). Additionally, going above $2k (up to 20 bug reports) in any month requires approval from the Sovryn team on that channel to increase beyond that.
Rewards are distributed according to the impact of the vulnerability based on the Immunefi Vulnerability Severity Classification System. This is a simplified 5-level scale, with separate scales for websites/apps and smart contracts/blockchains, encompassing everything from consequence of exploitation to privilege required to likelihood of a successful exploit.
Smart Contracts and Blockchain
|Critical*||Up to USD 1 000 000|
|High||USD 22 140|
|Medium||USD 8 800|
|Low||USD 2 200|
*For Critical bugs, the payout amount is capped at 10% of the funds at risk.
|Critical||USD 22 140|
|High||USD 8 800|
|Medium||USD 2 200|
All payouts are pegged to the USD values set here and are payable in BTC though the Sovryn team may, at their discretion, have up to 50% of the reward payable in SOV according to a vesting schedule dependent on the amount paid out.
Until the end of the bonus period, Sovryn will provide bonuses for Smart Contract/Blockchain bug reports based on the remaining time of the bonus period. In addition, critical and high Smart Contract/Blockchain bug reports that are validated will receive a unique artwork NFT on Sovryn, showing them as the heroes that they are, all throughout the bonus period. These NFTs will be designed upon each accepted Smart Contract/Blockchain high and critical bug reports.
|Bonus Time Remaining||Bonus|
|More than 3 weeks||+25%|
|Between 2 and 3 weeks||+20%|
|Between 1 and 2 weeks||+15%|
|Less than a week||+10%|
Payouts are handled by Sovryn directly and are done in BTC. However, the Sovryn team may decide to have up to 50% of the payment in SOV, which may include a vesting schedule.
In the case of Critical bugs that are affected by the 10% cap, the bonus will be applied after the cap.
Throughout the bonus period, Immunefi will provide exposure for the Sovryn bug bounty program, in addition to the initial launch promotion consisting of an announcement on Twitter, on Discord, and the email newsletter. This includes:
Like with all critical bug reports that are accepted by Immunefi’s clients, we will work with the Sovryn team in order to maximize positive PR in order to drive further confidence in the platform’s security due to a patch that wasn’t exploited, as well as to further highlight that experts are looking through the Sovryn codebase.
Based on feedback from the Sovryn community, an ad of the bug bounty program on Gitcoin, which would be a regular bounty program though with a minimal prize. The information on Gitcoin will be a light overview of the bug bounty program and then information indicating that they should submit bug reports through the Immunefi bug bounty platform.
|https://github.com/DistributedCollective/Sovryn-frontend||App - Front-end|
|https://github.com/DistributedCollective/multisig-ui||App - Multisig UI|
|https://github.com/DistributedCollective/governance-dapp||App - Governance|
For web/app bug reports, only those that directly affect the assets in scope are accepted.
We are especially interested in receiving and rewarding vulnerabilities of the following types:
The following vulnerabilities are excluded from the rewards for this bug bounty program:
Smart Contracts and Blockchain
Websites and Apps
The following activities are prohibited by bug bounty program:
In the case of two or more reports covering the same vulnerability, only the first complete bug report gets the reward.
For the bug bounty component, we request the allocation of enough BTC to cover up to 1 validated critical bug reports at full value, plus the 10% fee for Immunefi, payable upon accepted bug report. This comes to a total of USD 1 375 000. Throughout the bonus period, additional funds will be allocated when payouts occur in order to ensure that there will be enough funds to cover the full payment of a maximum critical bug report. At the end of the bonus period, a one-time reallocation addition to USD 1 375 000 will occur, in order to be able to cover at least one maximum critical bug report.
Recipient address and management of funds: Sovryn Treasury Multisig. No funds will be transferred to Immunefi as a deposit. The only time funds will be transferred will be to pay the bug reporters, directly from the treasury, and then to Immunefi.
For the bug report triaging and management service, we request the allocation of enough BTC to cover up to 20 bug reports per month for six months at the rate mentioned. This comes to a total of USD 12 000, payable in BTC. However, this amount is simply a consumable amount depending on the amount of bugs submitted and not to be paid upfront. If further funds are needed, either for the continuation of the service or because of the volume of bug reports coming in, a separate proposal will be created.
Immunefi will post a monthly report of the work that was done while the bug report triaging and management service is in place. This report will first be sent to the Sovryn development team before public posting on the Sovryn forum in order to ensure that bug reports they wish to temporarily keep under embargo will remain confidential until it is safe to disclose publicly.
Proposal - Designate the Exchequer Multisig and use of funds.
1. There is a miscalculation in the cSOV/RBTC redemption process on the VestingRegistry contract, which leads to only 1% of the corresponding amount of RBTC being reimbursed on request. Therefore, a manual redemption process is required to facilitate the redemption payouts of the remaining 99% for Genesis pre-sale participants requesting a redemption of their pre-deposit.
2. The Exchequer Multisig is designated to hold certain funds in the form of RBTC and SOV, in order to allow for flexible deployment of such funds in accordance with near term Sovryn protocol requirements.
3. Such requirements include, but are not limited to:
* For funds held by the Exchequer Multisig in the form of RBTC, the only approved use will be to facilitate RBTC redemptions for Genesis pre-sale participants who wish to redeem their pre-deposits within two months after SOV TGE, due to the miscalculation outlined in section 1.
* Deployment of SOV for the purposes of exchange listings, market making, and partnerships with third parties.
4. The Exchequer Multisig shall be a 3 out of 5 multisig held between the following wallet addresses:
5. The Exchequer Multisig will be allocated a total of 573,777.58 SOV.
6. The funds being held by the vault contract of bitocracy 1.0 as RBTC (0xc7a1637b37190a456b017897207bceb2A29f19b9) are moved to the control of the Exchequer multisig in order to allow for the performance of any necessary redemptions requested by Genesis pre-order participants.
7. After a period of two months post TGE, any remaining RBTC funds remaining in the Exchequer Multisig will be moved to the vesting registry contract of Bitocracy 2.0 (0x80b036ae59b3e38b573837c01bb1dB95515b7e6b)
Origin sale was oversubscribed. Sovryn paused deposits to the Origin sale in order to avoid receiving too many funds, which would necessitate many manually processed redemptions. In total, over 200 BTC was received. However, after accounting for donations and redemptions the total amount of BTC eligible for SOV distribution is 194.7. As a result, 5.29 BTC of the potential allocation remains unclaimed.
The team has reached a consensus that it is not worth reopening deposits to collect these 5.29 BTC, as that dev effort can be better spent on further development of the system and onboarding new users to the platform who participated in the Origin sale.
Therefore it is proposed to distribute the allocated 2M SOV to the current set of depositors, this would set the effective price at 9736 sats per SOV.
Pull Request 146
To provide funds for the Sovryn protocol treasury, it is proposed to approve a sale of SOV tokens to protocol supporters prior to SOV tokens becoming transferable and liquid. 2,000,000 SOV would be tendered. The Origins pre-deposit process collected deposits in the total of 200 BTC. It is proposed to forgo the Dutch Auction process as outlined in in the SIP-0006 Draft which can be referenced here, and approve the sale at the proposed opening price of 10,000 satoshis per SOV tendered.
On Thursday January 11th, the Origins pre-sale opened for pre-deposits. Within approximately 48 hours, a total of 200 BTC were pre-deposited and the proposed Origins pre-sale became fully subscribed at the proposed auction price of 10,000 satoshis, as outlined here. There is therefore no requirement to hold the proposed auction, as the sale is fully subscribed and such an auction would close at the opening price, were it held.
On January 25, 2020, Sovryn launched the Genesis Reservation system. Sovryn community members who controlled a special NFT were granted access to stake BTC or RBTC for cSOV tokens at a rate of 2500 satoshis per cSOV. Per SIP-0003, up to 2,000,000 cSOV were made available in the Genesis event, which will be redeemable on a 1:1 basis for cSOV, subject to approval by existing SOV holders.
After acceptance of SIP-0004, due to various circumstances surrounding the Genesis event, up to 641,946.1868 new tokens were created. This new token is referred to in this proposal as “cSOV-2” and is effectively equivalent in purpose to cSOV.
Proposal - Approve the 1:1 redemption of cSOV and cSOV-2 for SOV.
1. The RSK address of the cSOV token referenced is 0x0106f2ffbf6a4f5dece323d20e16e2037e732790
2. The RSK address of the cSOV-2 token referenced is 0x7f7dcf9df951c4a332740e9a125720da242a34ff
3. The RSK address of the SOV token referenced is 0xefc78fc7d48b64958315949279ba181c2114abbd
4. Up to 2,000,000 cSOV may be redeemed for an equivalent amount of SOV. Additionally, up to 641,946.1868 cSOV-2 may be redeemed for an equivalent amount of SOV.
5. Any cSOV converted to SOV will be subject to 10 months linear vesting (with approximately 1/10 of the total amount released on a monthly basis). Vesting will start from 2 weeks after TGE and the first vested tokens will be released approximately 6 weeks after TGE.
5. Any cSOV converted to SOV will be subject to 10 months linear vesting (with approximately 1/10 of the total amount released on a monthly basis). Vesting will start from TGE and the first vested tokens will be released approximately 4 weeks after TGE.
6. The source code for the redemption smart contract to be used can be found https://github.com/DistributedCollective/Sovryn-smart-contracts/blob/vesting-factory/contracts/governance/Vesting/VestingRegistry.sol.
7. The source code for the vesting smart contract to be used can be found https://github.com/DistributedCollective/Sovryn-smart-contracts/blob/vesting-factory/contracts/governance/Vesting/VestingLogic.sol.
Due to demand massively exceeding anticipated demand, it is proposed to increase the Genesis reserve allocation of cSOV.
On Monday, January 25'th 2021, Sovryn launched the Genesis Reservation system. This allowed users to reserve an allocation of SOV at a price of 2500 sats. Despite the fact that participation was limited only to addresses active prior to the snapshot on January 8'th, demand far exceeded supply and expectation. Within a matter of minutes, the funds received exceeded the allocation.
The approved allocation (SIP 0003) was to allow 2,000,000 cSOV tokens to be reserved for 50 BTC. In practice, 67.956 BTC were received, from some 800 addresses. From these, 66.04865467 BTC were correctly received for investing. The remainder was received as a surplus (or excess) without proper allocation rights. This amount is redeemable.
The goal of Genesis was to allow the cohort of early users, who were using the system, to become stakeholders in its future. Trade-offs (discussed below) notwithstanding, expanding the eligibility would appear most congruent with this goal.
Proposal - Activation of Genesis Reservation
1. The Sovryn protocol will issue up to 2,000,000 cSOV tokens. This represent a 200,000 increase from 1,800,000 of SIP 0002.
2. cSOV tokens will provide a pre-reservation mechanism for community members to stake funds in order to receive the right to SOV tokens, on a 1:1 basis with cSOV tokens subject to a vote by SOV holders.
3. These cSOV tokens will be distributed to stakers who have the early community NFTS.
4. The required stake per cSOV token will be 2500 Satoshis
5. Any cSOV tokens converted to SOV will be subject to 10 months linear vesting (with 1/10 of the total amount released on a monthly basis) from the date of the end of the SOV public sale.
6. Any cSOV holder that does not actively convert their cSOV to SOV within a two month period after TGE will be able to receive their staked funds.
Proposal - Issuance of cSOV to community members
1. The Sovryn protocol will issue up to 1,800,000 cSOV tokens
2. cSOV tokens will provide a pre-order mechanism for community members to stake funds in order to receive the right to SOV tokens, on a 1:1 basis with cSOV tokens subject to a vote by SOV holders.
3. These cSOV tokens will be distributed to stakers who have the early community NFTS
4. The required stake per cSOV token will be 2750 Satoshis
5. Any cSOV tokens converted to SOV will be subject to 10 months linear vesting (with 1/10 of the total amount released on a monthly basis) from the date of the end of the SOV public sale.
6. Any cSOV holder that does not actively convert their cSOV to SOV within a two month period after TGE will be able to receive their staked funds.
Proposal - Assign Multi-sig Addresses for Sovryn Bitcoin Treasury
1. The Sovryn protocol will assign five signatory addresses to form a 3of5 Bitcoin multisig wallet.
2. The wallet will hold the Sovryn Bitcoin treasury.
3. Future transactions from the Treasury require approval via a simple Sovryn vote.
4. The signatory public keys are: