Liquidity Rebase Test: Grootkit
We’re releasing another new and unique mechanic into the wild, a rebase that only affects tokens in the liquidity pool.
We have been working on this for a while and instead of just using it as a strategy for ROOT, it will also be a stand-alone project that takes a transfer fee to buy ROOT.
Links:
- GROOT address: 0x3a64b794ab9f836612592afbc7b6b4456b62b861
- Uniswap: https://app.uniswap.org/#/swap?inputCurrency=0x3a64b794ab9f836612592afbc7b6b4456b62b861&outputCurrency=ETH
- Dextools: https://www.dextools.io/app/uniswap/pair-explorer/0xf269f96bc1635ef859ab86a8b7f886c30cbcbeea
How Groot works:
The ROOT vault will be the sole liquidity provider and it will not be possible for anyone else to add to the GROOT/wETH Uniswap pair. Control of the LP tokens lets us perform the Liquidity Rebase.
In a single transaction we will redeem most of liquidity, make a buy to increase the price, then add the liquidity back in. When its added back less GROOT will be needed because the price is now higher, the remaining GROOT will be burned.
This function is public and can be activated every 15 minutes, it increases the price of GROOT by 5%. To prevent easy front running a 5% fee will be applied to all transfers.
When trading GROOT on Uniswap you must increase slippage above 5%.
Tokenomics:
- Liquidity Rebase Time: 15 minutes (Since last function call)
- Liquidity Rebase Amount: 5% (up)
- Starting Supply: 1 Million
- Fee-on-transfer: 5% (4% burned, 1% buys ROOT)
- Starting liquidity: 100 ETH / 1 Million ROOT
Testing in prod:
New mechanics can always have unknown or unpredictable effects. We intend to apply this price increasing strategy to ROOT with much less aggressive numbers. The 5% rebase every 15 minutes is at the upper limit of what we think can work without the whole thing imploding. We will be collecting the GROOT transaction and price data, as well as monitoring the community’s reception to the new mechanic.
If testing goes as planned we will be implementing the same mechanic in to ROOT this Friday with less aggressive amounts. The price of ROOT in the kETH pool will increase by 1% every hour until we tell it to stop.
