IV. GOVERNANCE

The VIGOR project is a decentralized autonomous community run by custodians voted in by users. Custodians vote on all issues concerning the running of the DAC. Tools and dapps will be developed through community worker proposals. Initially the DAC is run by a core team called genesis custodians as the platform is being created and implemented. We plan to adopt the same or similar DAC framework as eosDAC.

V. TOKEN LENDING FACILITY

This paper has mainly addressed borrowing of stablecoin through a crypto credit facility. Here we introduce future capabilities for a crypto lending facility which allows borrowing and lending of crypto tokens through the use of an upside TES and an implied zero cost collar. A lender will be able to escrow crypto tokens for lending and earn insurance premium for taking exposure to bail out risk of upside price events. A crypto token borrower would post stablecoin as collateral and pay upside TES insurance premiums as they borrow crypto tokens and take the other side of the collar. This creates another insurance pool and structured product for a basket of upside TES. This is distinctly different than REX and Chintai as they only deal with resource lending, whereas the VIGOR project deals with lending the entire token asset so includes price volatility and price event risk (in other words capital gains/losses). The final reserve for this insurance pool may also serve as a source of liquidity to facilitate new lenders entering and current lenders wanting to exit. VI. OPTIONS In a later release this project seeks to implement options trading. This is a direct use case for our multisig escrow contracts and stablecoin. We plan to enable long call options, long put options, selling covered calls, and selling cash secured put options. It will enable decentralized derivative trading between users without central custody or clearing.

VII. TOKEN ALLOCATION

The utility token VIG has three main utilities in the system:

fee token stablecoin borrowers must buy loan insurance which is paid over time and denominated in VIG tokens

final reserve for backing of stress losses

access/credit score users need VIG to access the system and their credit score is a function of total VIG paid in over time (and number of late payments/collections)

The VIG token will have an initial supply of 1b tokens with 0% annual inflation rate and will be allocated as follows:

20% community: via free airdrop for wide distribution

50% developer fund: for research, engineering, deployment, business development, marketing, distribution, staking resources etc.

30% DAC long term fund: for long-term network governance, partner support, academic grants, public works, community building, etc.

VIII. CONCLUSIONS

The VIGOR stablecoin system innovates the cryptobacked decentralized stable unit of account. The system creates a decentralized credit facility that enables trustless crypto-secured financing. It creates the first decentralized market where borrowers and insurers interact to separate and transfer both volatility risk and event risk embedded in token prices. Thus the system creates the stablecoin utilizing token event swaps TES’s and financial product structuring in a standard regulatory risk-based capital framework. Market based price discovery is a key feature which minimizes price inefficiencies to the benefit of users. The system focuses on financial engineering specification of risk, onchain stress testing, price modeling and price discovery to ensure sufficient backing of the stablecoin and should provide for transparent and concise voting agendas. The bailout mechanism is low friction; designed to avoid auctioning of collateral into distressed markets. We unlock scalability with a system that can handle more leverage e.g. users increase loan insurance if they have low collateral levels. The system can be viewed as necessary protocol layer for a robust crypto-backed stablecoin system that scales, has tractable governance, and on top of which we can deploy an interface with automated features that users care about. This platform has potential for users to build a crypto credit score a natural application of identity on the blockchain.

The VIGOR DAC is a decentralized autonomous community owned and run by its members to build stablecoin technology.

Vigor Stablecoin and DAC Social Links