Thread by @The_ReadingApe

Today we're going to share a thesis that we've read on @VaderProtocol, specifically about their native token, $VADER.

⚠️ Warning: Reading this might cause you to irresponsibly ape into Vader. Just try to control yourself. Consider yourself warned!

🔥 Let's go! 🔥

@VaderProtocol We did not come up with this awesome thesis.

It came from a person named zeroboundss from the Vader Reddit subthread. Decided to make a more graphic version of it and help spread it around so that more people will understand the uniqueness of the Vader Protocol.

@VaderProtocol Abstract

🔹 Paradigm shift in governance tokens right now
🔹 Vader protocol combines several primitives in DeFi space that nobody has seen before
🔹 $VADER accrue value from the revenue streams: Protocol Owned Liquidity + AMM

@VaderProtocol Problem with Governance tokens

🔹 No one knows how to extract value from governance tokens
🔹 Value is largely speculative due to the popularity of the protocol or TVL, but there is no clear value accrual of the tokens from the protocol

@VaderProtocol Low flow of profits to governance tokens

🔹 None of the current AMM have their own liquidity
🔹 They have rented liquidity so no/little profit can be generated for themselves, hence very little profit is channelled down to governance token
🔹 Tokens are only used to vote

@VaderProtocol The Flow of Value:

🔹 TVL➡️Fee Revenue for protocol ➡️ LP's cut ➡️ Protocol's cut ➡️ Governance tokens
🔹 By the time the value reaches the governance token, not much is left
🔹 Hence to extract USD value from the tokens, people sell it

@VaderProtocol Solution?

🔹 Protocols can distribute a % of the fees generated by trading with LP liquidity to the governance token holders
🔹 But LP will have fewer profits, and they might leave en masse out of the protocol
🔹 We know that rented liquidity has no loyalty, only yield matters

@VaderProtocol Core issue

🔹 Protocols have huge revenue but low-profit margins because they do not own any liquidity
🔹 Without profits, nothing can be passed down stream to the governance tokens

@VaderProtocol What about Vader Protocol?

🔹 Combines the idea of POL (by @OlympusDAO) with revenue-generating AMM together
🔹 Protocol will be profitable and a huge treasury will be built with highly profitable revenue streams
🔹 A % of this profit goes to $VADER, providing a yield

@VaderProtocol @OlympusDAO Now we have a larger share of the fee revenue going to the protocol itself, and thus a large part of it can be channelled down to the $VADER token

@VaderProtocol @OlympusDAO Gold Standard for governance tokens

🔹 By holding on to the $VADER token, holders do not have to farm to dump the tokens in order to extract value, they will get a cut of the protocol's revenue stream
🔹 Farm-to-dump model ➡️ Hold-to-claim model
🔹 This is a breakthrough

@VaderProtocol @OlympusDAO Conclusions

➡️ Vader Protocol is the first to combine POL with fee generated from its AMM for the $VADER token to accrue value
➡️ By holding on and not selling, users can claim a part of the revenue stream
➡️ This hold-to-claim model shall become the gold standard in the future

@VaderProtocol @OlympusDAO The source of this thread comes from here:

reddit.com/r/Vader_Protoc…

If this helps you, do thank zeroboundss in reddit for it!

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~ End Thread