Since inception, the primary motivation behind PROPHET has been to improve and enhance the fluid yield-generation features initially developed by Reflect (RFI).
It is our key differentiators — (i) a deflationary supply, (ii) dynamic fees and rewards, (iii) robust liquidity measures and (iv) variable transaction limits — that allow PROPHET to scale and adapt to changing market conditions, providing a protocol that is fit to last in an ever-changing crypto ecosystem.
In the last 48 hours since launch, we’ve increased the tax rate to 3% as our total holders grow. We’ve also increased the maximum token transfer limit to 20,000 PROPHET to attract bigger buyers. On top of that, we’ve already burned 65,437 PROPHET — about 6.5% of the total supply.
We are humbled by the support that our (rapidly growing) community has given to the project in the few days since our stealth launch — and are now excited to now reveal the team’s immediate next steps, as well as our vision for the long-term future of the project.
The Liquidity Dilemma: Creation of the PROPHET-DAI Pool
Users have rightfully flagged liquidity incentives as a key issue for the team to address.
The issue stems from blacklisting the Uniswap pool from accruing yield-generated rewards. This measure was put in place to prevent rewards from being disproportionately allocated to the locked liquidity pool — an outcome which would negatively impact regular token holders since the team’s initial liquidity makes up most of Uniswap’s PROPHET-ETH pool.
We attempted to address this deficiency through our liquidity reward campaign, where 2.5% of the total PROPHET supply will be airdropped to liquidity providers in the first 10 days from launch. That campaign remains ongoing.
However, as of the time of this post, users will now be able to add liquidity to a PROPHET-DAI pool on Uniswap.
Crucially, the PROPHET-DAI pool will not be blacklisted from accruing rewards. As such, any users contributing to this pool will continue to receive rewards just like regular holders (as well as receiving the usual Uniswap trading fees).
In addition to providing an additional source of liquidity, the new PROPHET-DAI pool also gives rise to arbitrage opportunities, which we anticipate will lead to further increases in trading volumes which is the main driver for yield in the PROPHET ecosystem.
Giving Power to the People: Creation of the PROPHET DAO
One of PROPHET’s core enhancements is the addition of dynamic, variable transaction fees and rewards. With a fixed 1% fee (as in the case of RFI), user rewards will exponentially decrease as the total number of holders rises. A fixed fee system would therefore be fundamentally inhibitive to growth of the project.
PROPHET therefore allows fees and rewards to fluctuate between 1% and 10%, depending on the needs of the PROPHET ecosystem in particular market conditions. For example, taxes can be increased during high volume trading periods, or lowered during market slumps.
Importantly — the decision as to which rate applies will be left entirely to the community via a newly-created PROPHET DAO.
The establishment of the DAO represents the first step towards decentralizing the PROPHET protocol and putting all decision making power into the hands of the community.
A full post on the mechanics of the PROPHET DAO will follow in the coming days.
Optimizing Returns: Trading Incentives
It is no secret that the PROPHET protocol functions best when trading volumes are high. Higher trading volume generates more taxes which in turn gives more yield to holders. In addition, higher trading volume accelerates the token burn rate.
While the team is happy with the current trajectory of the project — we are also aware of the need not to become complacent.
For these reasons we will be running a series of trading competitions — starting with a trading game called “The Vision” — with substantial prizes to be won in the form of PROPHET tokens.
We anticipate that the PROPHET DAO will take over the organization and operation of similar competitions in the near future to incentivize trading.
Marketing Plans: Strike While The Iron Is Hot
We understand that marketing can make or break a fresh crypto project. And too often, we see teams build great products and tech without putting in the necessary efforts to make external communities aware of their project.
With ETH breaking $500, all the signs are pointing to a new DeFi bull cycle with new money flowing in. So we plan to strike while the iron is hot.
That’s why we’re focusing our short-term efforts in getting the world out about PROPHET to as many communities as possible in the DeFi space.
Besides the usual action items like verifying our profile on Etherscan, and submitting to CoinGecko (which have all been completed), we’re working on partnering with key influencers, organizing AMAs, as well as paid ads on websites in the cryptocurrency niche.
The team will be deploying further funds towards marketing in the coming days to raise awareness of our updated vision and roadmap.
We appreciate our community for going above and beyond to share PROPHET in as many groups, and channels as possible, helping new members understand what we’re about, and defending us from baseless FUD.
That’s all we have for now. Stay tuned for more announcements in the coming days!
