THEIA Protocol
The problem we are solving:
Crypto-native mechanisms (NFT mints, ICOs, IDOs) for fundraising are flawed due to a misalignment of incentives between founders and investors. The recent fiasco of Pixelmon is a great example of this.
For these reasons, the VC model remains the dominant fundraising model.
The Solution:
A permissionless & decentralised fundraising protocol that fundamentally incentivises founders to build great products instead of just raising money , facilitated via game theory & maths.
Proposal overview
THEIA seeks to address the core shortfalls of the current crypto investment landscape by building a two-tiered investment platform consisting of Markets and Projects, both of which can be invested into by Investors. The platform sits on top of a universal fundraising mechanism which grantees a layer of security & liquidity for investors whilst also creating a monetary incentive for founders to build great products over the long term. This is facilitated by our Single Financial Instrument. Due to the nature of our instrument our protocol is compatible with not only the traditional crypto space, but also NFTs (art, gaming etc…), Fractionalised NFTs (musicians, science etc…). Anything that can be tokenizes can leverage the infrastructure of our protocol to raise money. Additionally we are compatible with nearly every EVM blockchain, with plans to expand to Solana in the future. This means that the market our project can target is truly vast and increasing with every minute as Web 3 becomes mainstream.
Our Single Financial Instrument:
Before fundraising on THEIA, a project must deposit an allocation of its native asset. This could be a coin, fractionalised NFT or some other asset. Once the asset is deposited into the smart contract the project can begin raising funds on THEIA.
When Investor invests inside a project he receives Project Tokens in return for his investment. Project Tokens are not minted by the project. They are minted via our immutable smart contract according to a pre-set of rules, and they function homogeneously across every project on the THEIA protocol. This ensures transparency and security on mathematical level.
From every investment into project, it receives a percentage commission upfront, usually in the range of 5-15%. The rate is set by the project. The intuition behind our mechanism is that the project only receives a small percentage of the money invested upfront. Most of the money goes to the smart contract, which serves as an isolated AMM. Investors can either choose to sell back their project tokens to the protocol and receive USDC in return or alternatively convert their project tokens into the native asset of the project. The project only receives the majority of the invested money when investors convert their Project Tokens, therefore founders are fundamentally incentives to prove their execution skill to their investors by delivering a high quality product and hence making their native asset intrinsically valuable. The investor will only convert into their Project Tokens when they believe that the project has delivered sufficiently as they forgo the benefits of Liquidity and Security Project Tokens provide when they make the conversion into the project’s native asset. Project Tokens can be thought as a new type of investment vehicle for project.
Prior to conversion Project Tokens can by traded directly with the protocol via an AMM built into the smart contract. It functions according to a bonding curve mechanism. The bonding algorithm functions akin to a federal reserve tethered to each project. It is responsible for the issuance and destruction of tokens and currency. Each bonding curve algorithm is backed by a reserve pool of USDC against which it issues tokens for the investors of projects. In addition to minting, it also sets the price at which investors can buy and sell tokens for USDC in the reserve pool. The price of tokens is determined by a mathematical algorithm, meaning that it is fully predictable and deterministic. This enables the following key benefits:
1. Trading can occur without the need for a counterparty.
2. Liquidity is instantaneous and native to the bonding curve. There is no need for third-party liquidity providers (e.g. Uniswap, Sushiswap, etc.)
You can read more about our bonding curve algorithm here.
Markets:
Markets are DAOs created by market creators. Ideal market creators are reputable individuals who are experts in their respective domains and have built online communities of followers who trust their opinions. A market creator creates a market with the purpose of finding and onboarding projects building legitimate services and products. The market’s criteria for choosing projects will be presented on the market’s page. The market creator sets a percentage commission for the market, and all investments into the projects in that market are charged that commission, which then becomes that market’s revenue. Each market has its own Market Token. The more investment projects in a given market receive the more revenue (USDC) the market earns, and the more valuable the market becomes. Investors can join a market’s DAO by buying and staking Market Tokens. Investors who would like to reduce their risk exposure may invest in markets, which effectively serve as a portfolio or basket of individual projects.
Market tokens are bought via the same fundraising mechanism as projects, except the currency that you invest into markets is TEA, our native token.
Projects:
Projects are created by project founders. Ideal projects are founded by an entrepreneur or a team of entrepreneurs who have a product idea, or are already in the process of building a product, and wish to raise capital in order to fund the development of their product before issuing their own native token. All available information about the project will be presented on the project’s page. Each project has its own Project Token. Investors can join a project’s DAO by buying Project Tokens.
Investors:
Investors can invest in both Markets and Projects. Ideal investors are individuals who want to support the long-term productive growth of the innovation economy and be economically rewarded by investing in the best markets and projects. Investors can invest in projects by buying Project Tokens with USDC and invest into markets by buying Market Tokens with THEIA’s native token, TEA.
Key Advantage:
The key advantage of THEIA is the alignment of incentives between market creators, founders, and investors, such that behaviour conducive to the long-term productive growth of companies and innovation is incentivized. Since the value of the market, as determined by the market’s revenue and the value of the market token, is intrinsically tied to the value of the projects underneath the market, market owners are incentivized to perform adequate due diligence and choose high-quality projects. The long-term reputation of the market owner is also at stake. A track record of scams and bad performance will be evident on the market’s statistics page.
Project founders are incentivized to choose reputable market creators that provide a large audience for discovery and those that can provide additional services other than providing a platform. These additional services can range from technical help to strategic consultation. The market’s reputation and provision of helpful services to its projects are justification for the market’s commission rate. The ability of the project to describe its value proposition and show progress will also be essential to the success of the project’s fundraiser, as our fundraising mechanism incentivizes projects that demonstrate long-term development. The project’s fundraising period is specified by the project founder and can last as long as three years. The ability to continuously fundraise means that project founders do not have to raise as much money as possible in a short period of time like in traditional fundraising rounds.
TEA Token Value Accrual Mechanism:
Intrinsic Monetary Value:
The TEA Token’s value is designed to accrue in line with the growth of THEIA’s whole ecosystem. The Intrinsic Value of TEA is simple: It is the ONLY currency investors can use to OWN A STAKE of a Market.
Let’s unpack this statement by looking at the flow of value within THEIA:
- Investment Into Projects → Commission for Markets → Dividend for Market Stakeholders
Market Governance Value:
The only way to have voting rights within a Market is to become a stakeholder, and the only way to become a stakeholder of a market is to invest TEA into it.
Therefore, not only is the value of TEA driven by the revenue a Market produces but also by the power and voting rights inside the Market’s DAO.
Token Distribution:
TEA Token Total Supply: 100,000,000 Tokens
- Team: 20,000,000 TEA - 20%
- Pre-Seed Sale: 5,000,000 TEA - 8%
- Private Sale: 10,000,000 TEA - 7%
- Foundation: 5,000,000 TEA - 5%
- Initial Decentralised Exchange Offering (IDO): 2,000,000 TEA - 2%
- Marketing: 3,000,000 TEA - 3%
- Staking Rewards: 15,000,000 TEA - 15%
- ICO 2.0: 15,000,000 TEA - 15%
- Development: 25,000,000 TEA - 25%
- Team: 18 Months Cliff, 24 Months Linear Vesting
- Pre-Seed Sale: 12 Months Cliff, 24 Months Linear Vesting
- Private Sale: 12 Months Cliff, 24 Months Linear Vesting
- Foundation: 60 Months Linear Vesting
- ICO 2.0: 3-5 Separate offerings split over 5 years
- Each Offering: 3 Month Cliff, 12 Month Linear Vesting
Roadmap
1. Prototype Launch:
Our MVP Product presents the core system at work for investing into a project on THEIA. This system includes: Buying Project Tokens, Selling Project Tokens back to the protocol, and converting Project Tokens into the Project’s native asset. Our MVP is currently on the Avalanche testnet. When we launch on the mainet, investors will be able to invest into the THEIA project via our fundraising mechanism.
2. Alpha Launch
Our alpha launch will allow users to invest in approximately 10 high quality hand picked projects on the THEIA platform. Effectively we will be creating the first market by the THEIA team. We have already begun making partnerships with DAO and projects who want to use our platform.
3. Beta Launch
Our Beta Launch will deliver on our promise of a fully permissionless fundraising platform where anyone will be able to create a market and project. We are already making introductions and partnerships with individuals and communities we believe will represent and spearhead our platform with quality.
4. V2 Launch
Our V2 launch will include greater market customisation, the introduction of the locking contract as well as a more extensive bond marketplace. Our Decentralisation initiate is planned to take place in 2023 which will completely hand over THEIA’s governance to our community.
Funding
We are currently raising an investment round of $2-3 Million. We would like Harmony to participate in this round with an investment of approximately $1M.
We have finished building the smart contracts for our core mechanism, but the platform requires significant development efforts to realise its full scope. We will be allocating approximately $1M towards our development in order to scale our team and hire more full stack and front end engineers. As we all know this space moves fast and the speed of getting to market is extremely important which is why we need to heavily expand our development team in order to meet our target dates of Alpha Launch & Beta. Alpha & Beta Launch are our main milestones.
The rest of the funding will be allocated towards both legal & marketing costs.
Proposal ask
$1,000,000 at $25M Valuation. 4,000,000 TEA (4% of Token Distribution)
Metrics for success
Alpha Launch - May Release:
-Minimum of 5 projects on THEIA
-$5M invested across all projects within 2 months of launch.
Beta Product - June Release
-Min. 25 projects within 2 months of launch
-Min. 5 markets within 2 months of launch
-$25M invested across all project within 2 months of launch
External links
Website: https://theia.finance/
Whitepaper: Welcome to THEIA - THEIA
Testnet: http://testnet.theia.finance/
Testnet Instructions THEIA Testnet- User Instruction Manual | by THEIA | Mar, 2022 | Medium
Twitter: https://twitter.com/Theia_Labs
Discord: THEIA