Prorated

📝 Project Submission Template

GitHub collaborator invite has been sent to @HL-Hackaton.

🧠 Project Name

Prorated

🔍 Description

Prorated innovates a brand new tokenomic model where a protocol creates a DAO to raise funds for development and initial liquidity. Contributors choose a lockup duration on their position in exchange for leverage on their share of the pool. If the campaign is successful, the DAO token is created and 100% of the token supply is used to seed liquidity alongside a portion of funds raised. The LP tokens are the real governance asset for the DAO, and get locked into Voter Escrow NFT positions on behalf of contributors. Unlike low float / high FDV perpetually down tokens, this creates an economic model where a DAO can use a fee switch to perpetually buy their own token and DAO members are rewarded proportionally based on the size of their position multiplied by theor lock duration. Since individual liquidity is locked for up to four years, with enough buy pressure from DAO revenue this has the potential to become an up only token that rewards all users equally whether they are VCs, angel investors or retail, fully decentralizing the entire fundraising process with our new tokenomic model.

🛠️ How It Works

1. Prorated is primarily a fundraising platform to crowdfund protocol development.
2. Developers create a campaign to raise funds from contributors, who become DAO members
3. Contributors choose a lock duration on their position from 1-208 weeks as a leverage multiplier on the shares of the pool they receive.
   1. ie. $1,000 locked for 100 weeks receive the same shares of LP Tokens as $100,000 locked for 1 week would. Users are trading leverage for duration risk in order to reward long term commitment.
4. If campaign is successful, DAO token is launched and 100% of token supply is seeded into a Balancer style 80/20 pool with a portion of funds raised.
   1. Prorated has a custom Proswap DEX that is a UniswapV2 fork integrated with Balancer math libraries to implement a custom x^0.8y^0.2=k invariant for 80/20 pools.
5. The LP Tokens of this 80/20 pool are the real governance asset of the launched DAO.
6. LP Tokens are allocated prorate to contributors based on their shares of the fundraising pool.
7. LP Tokens are automatically deposited into a Voter Escrow NFT contract for preselected lock duration on behalf of each contributor.
8. veNFTs decay linearly and allow withdrawal of decayed portion of position
9. Since entire token supply is locked into the pool, the pool starts off with zero sell pressure with progressive unlocks every week. Longer average duration lock per token means much lesser sell pressure.
10. When DAO launches their protocol, any fees collected can be used to create buy pressure on the token. This creates an accurate an non manipulable price discovery mechanism in between sell pressure and DAO profitability.
11. Since liquidity is launched at such low market caps (portion of raised funds), it becomes much easier for protocols to sustain positive price pressure.
12. If DAO loses confidence in developer team's ability to deliver the protocol, they can rehypothecate their LP Token allocation and burn it or reallocate it to DAO members.
13. This essentially makes Prorated projects unruggable. If DAO fires dev team and rehypothecates, the DAO token basically becomes a retroactively fair launched meme token.
14. Prorated also creates custom Prolend isolated lending markets in between the DAO token and the fundraising token, enabling leverage trading by using one asset as collateral to borrow the other and sell or buy or to go long or short with leverage.
    1. These markets are a simplified version of Fraxlend smart contracts
15. Lastly, basic DAO Governance infrastructure is also deployed for DAOs to start using their properly allocated voting power to start making protocol decisions right out of the box.

💻 Demo

https://www.loom.com/share/c3c20e6535e148fcbf308bb1d81457f7

📂 Project Links

Include links to anything relevant:

• https://prorated.xyz
• https://github.com/hollowgrahm
• https://x.com/hollowgrahm

👥 Team

Protocol Design @hollowgrahm

Smart Contracts @hollowgrahm

Frontend Development @hollowgrahm