Detailed explanation of Citadel DAO token economics: how to grow into a Bitcoin whale?

Author: Chloe

Original source:Author: Chloe

Original source:

Chain Tea House

The Bitcoin investment agreement Citadel DAO announced its Token Economics, allowing the native Token CTDL to be divided into xCTDL and vlCTDL according to the pledge and locking actions to provide different benefits.

Citadel DAO also introduces an elastic release mechanism, which is a strategy to balance pledgers and financing based on the project market value and the size of the user's treasury, so as to avoid large fluctuations in the project's market value from affecting the project's pledge ecology.

Citadel is a DAO treasury. Its purpose is to become the largest community with bitcoin positions in the world. Both its treasury and the agreement will be governed by CTDL tokens, using its bitcoin treasury to actively earn income, and long-term with CTDL Holders share.

In order to ensure that it can generate sustainable returns on its Bitcoin position, it not only holds Bitcoin, but also holds assets that affect DeFi. This allows Citadel to exert great influence in multiple ecosystems and fight for the benefits that Bitcoin deserves.

Citadel will grow into a Bitcoin whale for users, supporting not only the creation of Bitcoin-focused products in DeFi, but also the severely underfunded Bitcoin Core development system.

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1. Project overview

Over time, the income of CTDL holders is driven by the production of the treasury and its returns, rather than strict regulations. This mechanism is also built on those relatively stable assets-Bitcoin.

Therefore, when designing the protocol mechanism, Citadel's goal is to make dapps the most attractive place for CTDL transactions, while allowing funds to continue to grow.

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This is very similar to the experience of trading on a decentralized exchange. With just one click, users can exchange Bitcoin or other assets for xCTDL (Citadel with interest) at a discount below the current market price. We Call it "financing," and it's the main source of income for the vault. The number of xCTDL that can be exchanged is limited by the originally scheduled 10-year token release plan, and will be distributed according to the operating conditions of the agreement.

Both CTDL and xCTDL are standard ERC 20 tokens.

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Long-term holding or recharging:

With a fixed release rate, xCTDL aims to hit the target APY in its 10-year plan. To further bring the protocol into line with its holders while ensuring transparency among all participants, xCTDL has a rule that after a holder exits, an authorization period will be activated during which the holder will Receive their CTDL linearly until the end of the term.

This means that holders can withdraw CTDL at any time, while limiting their short-term arbitrage opportunities, and helping other holders to clearly understand when others decide to withdraw, and holders who already have CTDL can also access dapps to coexist into xCTDL.

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Lockup:

When users are ready, they can join Citadel to reap the benefits of Bitcoin for long-term profitability. Inspired by the veTokenomics and Convex protocols, users can lock their xCTDL for a period of 21 weeks, which gives users:

(1) The multiplier of their cumulative CTDL release (e.g., 2-3x xCTDL gains)

(2) BTC funds obtained through financing

(3) The percentage of income obtained through the active treasury

Any agreement that affects the work of Citadel's treasury, acquires assets for the treasury, allocates its yield, and provides any governance advice can be joined through Citadel's partner platform.

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2. Application scenarios

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Built-in rate of return mechanism:

Only a few users will actively invest funds into a treasury, because many protocols are limited by the management and return process, causing many community members to ask for a certain degree of transparency in the treasury, and the secret of Citadel is through the Badger treasury system Has a built-in rate of return mechanism.

This can make the productivity of the vault transparent, non-custodial, verifiable and automated.

Badger has extensive experience creating yield strategies that Citadel leverages to ensure all assets in the vault are actively earning yield.

There is a synergistic effect on the sum of vault production and yield, and as new assets are added to the vault, Badger ensures that there are free vaults activated so that it can start earning yield.

Example: Citadel deposits BTC into ibBTC’s Badger and earns BADGER, bveCVX, and bcvxCRV.

In the BADGER dapp, BADGER will give a higher boost to Citadel's BTC yield, while bveCVX will vote to push the base yield of the ibBTC CRV pool, which will make the yield proportional to the treasury growth and create a unique cycle .

Simply put, more BTC = more yield + acceleration = more vault yield.

This cycle will allow Badger and Citadel to dominate not only on the curve, but also in subsequent ecosystems that will compete for yield influence in the future. The same method can be applied to ensure that BTC yield is properly reflected in all DeFi .

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Partner Inception Program:

When launching a DAO, the key is that those governance participants, the community must have a common value and belief system, and work together for common goals and interests. Therefore, Citadel is in the process of launching Badger. It is planned to find some Unique partners come to participate in the process of launching Citadel for the first time.

Citadel calls this startup plan the Citadel Knighting Round.

knighting round：

Users will be able to exchange xCTDL for WBTC, ibbtcCRV Badger vault token, CVX and/or bveCVX, and only users who meet the whitelist criteria will be able to participate in the launch event.

The knighting round is a fixed pool of Citadel tokens that can be allocated to partner DAOs/applications, and they will become Citadel's knighting.

How the funds are allocated will depend on the participants who start the event. When participating in the event, they can choose a DAO to vote for. At the end of the event, Citadel will distribute these statistical results to these DAOs in proportion, and then these DAOs will be able to Choose the direction of the Citadel.

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Badger is a Bitcoin-focused DAO, and since there is no better asset to serve as the basis for a thriving vault protocol in the next few years, this will be a key factor that differentiates Citadel from the rest.

Citadel enables users to tokenize and exchange xCTDL for Bitcoin through the Badger bridge, similar to today's users who can use local BTC to recharge in the Badger vault to obtain income. Building bridges with profitable Bitcoin users.

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The design of Citadel's token economics balances the advantages of the existing token economics model, and at the same time fundamentally allows holders to get the greatest return.

Citadel can be pledged or locked, just to provide higher benefits, and the two derivative tokens are xCTDL and vlCTDL, vlCTDL holders will receive three forms of rewards: CTDL APR, the mechanism for producing BTC, Finally xCTDL holders will receive CTDL APR.

4. Project Planning

There will be various RFFs for the community to weigh in on before releasing the basic protocol. In the future, users will be provided with more details about the release plan, whitelist eligibility, partner dao, the role of Badger-Citadel, and how to participate in the release.

Twitter：

https://twitter.com/TheCitadel_DAO

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Discord：

https://discord.com/invite/67vc73jsat

5344k followers

6878 followers

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6. Conclusion

Launched as an affiliate DAO incubated by Badger, Citadel will have a standalone dapp but also have the functionality of the Badger app. Badger will receive a share of the Citadel token supply at launch, including earning Citadel revenue, among other things.

Citadel is expected to be the largest BTC depositor in the Badger app (guaranteed TVL and sustainable income), largest Badger token holder (earned through vault accumulation and BTC deposited in the protocol), BADGER token Largest depositors of BTC (when vlBADGER launches, this will allow Citadel to increase the yield on its BTC deposits), and the largest depositor of bveCVX vaults (allowing sustainable yields of BTC in the Curve/Convex ecosystem).

This will be the best cycle for the entire ecosystem, it will create a tight connection between the two DAOs, while promoting the development of Bitcoin in DeFi.

In this field, DAO treasury has not yet been fully explored and utilized. Imagine a DAO focusing on building a large treasury, letting the community manage its influence, developing autonomous methods to improve the productivity of the treasury, and allowing long-term Holders share in the proceeds of these activities.