Void Energy
TangleSwap’s Decentralized Reputation System
What is Void Energy (VE)?
In light of the hurdles and successes seen by previous generations of decentralized finance (DeFi) applications, the TangleSwap protocol has been designed such that the utilities and incentivization schemes behind its native $VOID token incorporate a distinctive and powerful, yet simple mechanism: the non-transferable Void Energy.
At its core, Void Energy (VE) serves as a decentralized reputation system, enabling TangleSwap to overcome many limitations inherent to decentralized platforms.
Decentralized protocols often grapple with the issue of user anonymity and untraceability. Unlike traditional Web2 apps, Web3 platforms lack the capability to track genuine user engagement. Void Energy addresses this challenge by offering a robust method to distinguish long-term supporters from transient participants.
While TangleSwap welcomes every single user in a permissionless fashion, we found that market history and research regarding past DeFi applications has highlighted the necessity for a more advanced and nuanced differentiation of user types in order to secure efficient and mercenary-resistant token emission schedules.
How is VE generated?
The unique design of Void Energy ties user reputation to two limited resources:
- $VOID
- Time
Given that the only mechanism to generate VE is by lock-staking the VOID token for a specified duration, VE is not inherently resistant to Sybil attacks, but it economically disincentivizes malicious behaviour altogether.
The amount of VE generated from staking VOID is calculated based on the following formula:
The user's VE is produced upfront — that is, from the very start — for the full chosen staking period. A minimum duration of just 7 days allows users considerable flexibility, while the maximum staking duration of 1400 days facilitates a broad spectrum of user-specific optimization possibilities.
Once the duration set by the user is reached (that is, the staking round expires), the user stops receiving rewards. At this point they can choose to either re-stake, or withdraw their VOID tokens.
The Void Energy mechanism empowers users to establish a strong reputation over time. However, those seeking to unmistakably prove their 'skin in the game' with limited resources can do so by opting for a longer staking duration, thereby instantly unlocking the total VE that would have otherwise been generated — in equal amount — over the period of multiple shorter staking rounds.
It is important to note that Void Energy is a precious resource: unstaking a single VOID token results in the loss of all accumulated VE. Much like in the real world, a good (decentralized) reputation is hard to earn, yet easy to lose.
Void Energy is strictly linked to a user's specific wallet address. It is neither tradeable, nor transferable.
For full clarity, let us examine four arbitrary examples, sorted in decreasing order of VOID rewards from A to D:
What benefits does VE provide?
While the VOID token constitutes an integral component of TangleSwap with various intrinsic utilities, the token only reaches its full potential through the exclusive advantages awarded to holders of Void Energy. Below you will find a brief list that outlines the benefits and functionalities that VE enables for any given user.
• Governance 🏛️
The functional decentralization of governance stands as a pillar of TangleSwap’s vision. However, the prevailing token-centric governance models within the industry have consistently fallen short in providing an adequate framework that effectively unites the diverse interests of stakeholders.
To tackle this pervasive issue, TangleSwap designates VE as the exclusive source of governance voting power, in a step to maximize alignment between long-term token holders and the protocol's performance & execution.
💰 Bribes
• Staking 🌱
A designated segment of the VOID supply is dedicated to participants who have tangibly demonstrated a sustained commitment to the protocol.
Your staking rewards are determined by the following formula:
• Boosted Farms 🧑🌾
The economic alignment of liquidity providers with the long-term objectives of TangleSwap is vital to securing a healthy token economy. To this end, a portion of farming rewards is reserved exclusively for those liquidity providers who have proven their long-term commitment by generating Void Energy through our Smart Farms.
Through this incentivization mechanism, we cultivate a class of stakeholders who not only have a vested, enduring interest in the TangleSwap protocol but are also proportionately rewarded for their contributions.
• Investment Hub Access 🌌
In the long run, the TangleSwap team plans to implement various additional utilities for VE as the use cases for a decentralized reputation framework evolve together with a young DeFi industry.
One such viable utility could be providing early access to select Investment Hub events via VE-gated access.
• Trading Discounts 🧮
Another long-term utility can include implementing discounts to enable high-volume and high-frequency traders to maximize their profit potential. By tying discount tiers to a specific reputation score in the form of VE, traders are incentivized to acquire VOID and join the community for the long haul, rather than just temporarily.
| Tier | Void Energy Balance | Trading Discount |
|---|---|---|
| Planet Earth | < 1M VE | 0% |
| Red Dwarf Star | ≥ 1M VE | 10% |
| Blue Hypergiant Star | ≥ 10M VE | 20% |
| Ultramassive Black Hole | ≥ 100M VE | 30% |
The Void Energy reputation mechanism serves TangleSwap's guiding principles by not only unlocking a plethora of platform-wide advantages for reputable token holders, but also cultivating economic incentives that synergize the interests of all stakeholders. Complementing this, TangleSwap's Buyback-and-Burn Blasters strategy further enhances these mechanisms by providing a sustainable and organic support structure for the token.
The end result is a core piece that represents the beating heart of the TangleSwap protocol — the fuel of our Tangleship — and a cornerstone of decentralized finance: $VOID.