As any self-respecting blockchain protocol, Cargo would not be Cargo without introducing new tokens and financial primitives into the primordial soup that is crypto markets and DeFi in particular. In this document we lay out our thinking process related to the two sets of tokens we would be working on.
First and foremost it’s the Cargo Liquidity Provider (CLP) tokens, aimed at releasing value of assets locked in various rebalancer strategies, across the sector, and making them portable. That’s planned to be the DeFi primitive underpinning our architectural choices as we are building out our protocol.
Secondly, while we favour a functional product-first approach, it’s clear that stickiness and robust community power is correlated with liveliness and distribution of its governance token to the main stakeholders in its orbit a.k.a. Ecosystem.
So, in summary, we are talking about a new DeFi lego piece, called CLP token, in its various incarnations, as well as a governance token (name to be defined later).
Cargo Liquidity Provider (CLP) tokens
There are multiple ways to use Uni V3 tokens as collateral on various lending platforms (aave, wild credit etc.). However, being able to deposit your rebalancer receipt LP tokens as collateral is not yet as widespread (see Gelato's G-UNI ERC20 Uniswap v3 positions as collateral to Aave's AMM market integration case study). This is where Cargo protocol steps in with creating a unified format for such liquidity pockets, regardless of a LP management protocol involved.
As an example, when a user deposits their USDC and ETH for the purpose of being actively managed into the Unipilot protocol 0.3% fee pool, via Cargo, they would get back ERC-20 tokens with the following format CLP-USDC-ETH-0.3-UNIPILOT. Incidentally, this clearly shows which rebalancer and consequently strategy is going to be used in deploying these tokens to Uni V3. Now, what is our vision on what they should be able to do with these tokens?
- Simple and the most obvious, they should be able to use CLP tokens as collateral, to be able to borrow some other token in return. In principle, the experience should be the same as how they would be able to do that with their Uni V3 LP positions directly. This would require business development and work with relevant DAOs to accept such tokens into their vaults. The advantage of dealing with Cargo-wrapped rebalancer LP as opposed to rebalancer LP directly would lie in ease of integration. Once you have done your integration work with one Cargo-style wrapped rebalancer LP you are set up to accept all of them.
- Swapping a position in one rebalancer for another. Once you are able to denominate and track value of the CLPs, trading them in an internal matching system or externally, on an AMM or decentralized order book exchange is a fairly obvious functionality.
- Designing structured products. Take various CLP tokens and build your own tracker/portfolio tokens out of them. How would you like being able to assemble your own blended return token from a bunch of distinct ETH-USDC value pockets with various rebalancers? Or take your stablecoin pair and spread it across the entire LP management sector, taking advantage of pools with sufficient TVL limits, and then issue that synthetic product token into the wild. Could be a pretty interesting product for treasury management purposes as well as for speculation. This is a complex but exciting one as the limit here is purely the user's imagination (and position size limitations).
Governance (DAO) token
As mentioned in the summary, to be successful, Cargo needs a buy-in from the wider community of DeFi power users. One of the potential ways to achieve this is to incept a token that is an attractive hold and that has governing power over the direction of the protocol.
What it should do:
- Be transferable
- Give the users the means of approving and course-correcting strategic and product decisions proposed by the founding team and core community developers.
- Power over the community treasury management, to which 50% of the total float is allocated in the current version of the protocol tokenomics.
- When locked-in (see, for example ve structure, and a case against this specific choice in the useful links section) get Cargo protocol fees earned by the platform itself accrued to them in ETH/WETH/DAI or whatever token is decided by the DAO. One of many inspirations for this element:
How it should be distributed - some of the airdrop options:
- Rebalancer treasuries, to incentivize them to participate in the Cargo Protocol governance - definitely
- Airdrop to early users/testers - maybe
- Airdrop to users of rebalancers - maybe
- Airdrop to prominent DeFi communities (e.g. Lobster DAO) - maybe
Add Gelato’s G-UNI ERC20 Uniswap v3 positions as collateral to Aave’s AMM market https://governance.aave.com/t/arc-add-gelato-s-g-uni-erc20-uniswap-v3-positions-as-collateral-to-aave-s-amm-market/5687
ZKP Private Airdrop https://github.com/a16z/zkp-merkle-airdrop-contracts