Name of the Project
SMUG(DOGE) PROTOCOL
‘Serving Many Users Globally’ Protocol
Application type
Launch grant with a future investment ask.
Proposal overview
In crypto, especially when talking about meme coins, its important to be safe and sound with your investment. Volatility is expected in meme coins, but a rugpull is not. SMUG is a unique meme token on because of its reflectionary/redistribution mechanism, and is fertile grounds for a DEX. It’s important to first understand this:
Every time you buy, send, sell, wrap or LP your $SMUG, you are subject to a tax of 10%, no exceptions. Half of that 10% (so 5% of your transacted amount) is permanently re-added to a locked liquidity pool (which you can check in the verified Contract section of the block explorer at our contract) with the other half being redistributed to other holders of the token (airdropped to your balance which you can check on the blockexplorer or Metamask).
That’s not us adding anything manually to the LP. In fact, it makes no sense, economical or otherwise (for now) for you or anyone else to add any LP yourself to this pool.
When it receives the ONE from each taxed transaction, it uses half of it to buyback $SMUG from the protocol, and adds it permanently to the liquidity pool by burning the LP tokens. This is the reason why you need to set slippage to at least 11% when interacting with $SMUG.
Receive tax ->Sell half of ONE to $SMUG → Bind the remaining half with $SMUG (auto-buy) → Add to liquidity pool → Burn tokens
And it never stops. Day or night. No matter how small the amount, this allows for an ever-increasing price floor, and it allows for big buys and sells to flow into the coin, at a lower price impact, as the liquidity is crowdsourced from everyone.
You can read more about the details of this on the external links section.
What’s Unique
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While the above taxation mechanism isn’t anything too novel in crypto (pioneered by SafeMoon and alike), the idea of having a truly community-owned locked LP, especially when being a ‘meme-token’, gives us a great foundation to build upon and allow people to launch their own tokens on our platform!
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By having community-sourced liquidity, there’s less risk for users, and it gives way for a more equitable distribution. When the protocol owns the majority of its own liquidity it can to a greater extent minimize volatility and protect the holders of the token. We have the first-mover advantage in this space (Viper is only recently doing a similar thing, and it serves a different purpose, but the idea of protocol-owned liquidity is present there, and many experts agree on it being the future of DeFi).
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The SMUG Protocol aims to act as a launchpad for meme tokens, but also adding value to older, Harmony native protocols via the liquidity mining incentives, all the while bolstering the protocol’s own reserves (locked LP, plus the small marketing wallet we have equating to about 2% of total supply). This approach solves the principal-agent problem by introducing a third party (SMUG Protocol), to act as a sort of escrow between the prospective buyers of a new token.
How it would work:
A creator of a token approaches us, and their token gets put on a list of pending projects, all of which can be voted in via snapshot DAO. Each week, qualifying projects can bid DEXSMUG for the right to host a 7-day Farm on SMUG Protocol. Existing DEXSMUG token holders get to vote on these, much like PancakeSwap does their Farm Auctions. This way, the wishes of the community are honored, and the project benefits from the transactions done, as the only way to buy DEXSMUG (and sell) is by going through SMUG (at this point in time, subject to change), which gets 10% taxed on transactions of any kind (transfer/sell/buy/wrap/bindLP), which ensures the protocol’s own treasury and locked LP goes up, as well as redistributed rewards go to the supporters of the protocol.
Well hold up -
How do we make sure that some project owner doesn’t just market-buy the DEXSMUG token, vote their project in, and then dump the DEXSMUG after they’ve finished voting and it’s a sure thing?
Great question! The transaction is, like I’ve mentioned, full of taxes, and anyone doing such a thing would have to be really, really confident in their token, in order to do it. Furthermore, there is no incentive for bad actors in this model, as the liquidity is hosted on the SMUG Protocol, and they cannot “rugpull” which is really common for meme tokens on DeFi. Furthermore, whatever the success of the Farm Auction is, SMUG (and its holders, by extension) benefit. More LP locked and added in the protocol, and more value accrued for the SMUG holders.
Upon launching, we will have 95% lockup a la Viper, in order to make sure that the POC works, and the community will vote on what happens after the lock-up period. What separates us from the other OlympusDAO mechanisms is the simplicity for the end user and the synergy we can attain from leveraging existing products such as vaults present on FarmersOnly, lending protocols existing, etc.
SMUG will be needed to buy DEXSMUG, which is needed to participate in the launches (and bids!) of farm auctions! SMUG is also hyper-deflationary in and of itself. Since the 0x0000000dead wallet now holds a bunch of $SMUG, it’s technically one of the top holders of $SMUG. What does that mean? Well, additional SMUG gets burned as part of the ‘5% redistribution to the top holders’ tax! The burn address will hold more and more $SMUG as we grow, making $SMUG hyper-deflationary!
Token is needed.
We aim to add value in a fun and interesting way and be much more than a doggy coin, due to the novel way of the protocol owning, rather than renting, its own liquidity.
State of product
- Token launched on October 28th
- 60k USD LP tokens community-sourced
- Listed on NOMICS with accurate price and mcap, also listed on Coingecko.
- Website in Chinese and English, JP soon SmugDoge — Did you buyed?
- Organic Twitter and Telegram following that is very proactive and helpful.
Support
- Soft support: Technology, comarketing, partner network[investors, and projects]
- Monetory support: Launch grant, Investment.
Roadmap
- Mid-November, SMUG Protocol launch, establishing governance via snapshot, migrating SMUG to DEXSMUG (so that interactions with the token aren’t taxed)
- Early-December, Launching our first Farm Auction bids and distributing NFTs to the supporters
- Leveraged yield farming on Harmony is something I have an idea of doing by forking an existing successful BSC protocol, and for this to work well in terms of tokenomics, community-owned liquidity is very important, say it a cross between TIME and ALPACA.
Team
Nenkov.one - Main and only dev, creator, website design, marketing
Lukas Konig - Main CM, but mostly the data guy who helped make the API and list SMUG on Nomics/CG/LCW and has helped me and the community a lot.
Lots of community managers and ideas men who are renowned across the Harmony community (and to them I owe most of the success, and the future success, of this project, no lie).
Proposal ask
- 50k in tranches, as is the norm for Harmony grants.
Justification
- The grant will be used to acquire a security audit.
- Used to pay off bounties for technical and marketing purposes, without having to sell the token itself.
- On-boarding more technical staff, if possible, lots of people in the Telegram chat doing a lot of work on making this project work, and they are the reason why I am applying for this grant. There’s so much potential given the 400k mcap of the SMUG token right now.
Metrics for success
- LP tokens (USD worth) locked in the SMUG-ONE, as of today, we have about 60k USD, out of which only 2k USD is my personal timelocked funds (unlocking in late April 2022).
- TVL in SMUG Protocol
- Number of successfully launched tokens on our protocol
- Number of SMUG holders (currently at about 350 Harmony Blockchain Explorer )
