Augusta Finance: Revolutionizing Liquidity and Governance
Augusta Finance operates as a liquidity-releasing protocol and governance point, firmly embedded in the Velodrome Finance ecosystem. Its innovative solutions allow users to secure instantaneous veVELO NFT-backed loans while concurrently simplifying access to Velodrome Finance governance power.
Understanding Velodrome Finance
Velodrome Finance constitutes a ve(3,3) DEX built upon the Optimism network. It amalgamates liquidity from various protocols on Optimism via the veVELO bribery mechanism. As an NFT, veVELO can be transferred amongst individuals through the platform’s official NFT Marketplace, thereby enabling holders to reap multiple income sources such as bribery fees, swap fees, and veVELO rebase. As the current reigning protocol within the Optimism ecosystem, Velodrome Finance’s governance power equates to mastery over a substantial portion of all liquidity in the Optimism ecosystem.
Challenges and Augusta Finance Solutions
There are existing issues with the liquidity release of veVELO NFTs and the standard PFP NFT lending protocol. These flaws stem from the Convex fork model’s disadvantages and the intrinsic properties of PFP NFTs, respectively. Augusta Finance, acknowledging the financial advantages of NFTs like veVELO, has introduced a collateral lending product tailored for veVELO NFTs.
The current conventional model, the Convex model, though useful, has some drawbacks. For example, liquidity receipts face considerable discounts in the secondary market, and the model is unable to yield positive external returns. Furthermore, mainstream PFP NFT lending models, including BendDAO’s P2Pool model and Blend’s P2P model, face problems regarding NFT collateral, forcing the protocol to utilize its token as a liquidity incentive and creating an imbalance in the supply and demand of the protocol token.
To address these challenges, Augusta Finance adopts the NFT collateral lending model, which capitalizes on the interest-bearing and governance properties of veVELO NFTs. This model effectively mitigates problems within the PFP NFT lending protocols.
Examples and Case Studies
To further illustrate the effectiveness of Augusta Finance’s solutions, let’s consider a case study. Company X, a prominent player in the NFT market, faced challenges in releasing liquidity from their veVELO NFTs. By utilizing Augusta Finance’s collateral lending product, Company X was able to unlock the value of their veVELO NFTs and access immediate liquidity without compromising their governance power within the Velodrome Finance ecosystem.
Tokenomics and Governance
Augusta Finance’s token distribution plan encompasses several sectors. For example, a substantial 45% incentive goes into the ETH pool (62%), the borrowing pool (33%), and the AUGU liquidity pool (5%), all with a vesting period of three years and monthly decay. Other allocations include 20% for partnership and growth, 15% for IDO, 10% for treasury, 2% for trigger, 3% for airdrop, and 5% for reserve, with one year of vesting.
The $AUGU token, with a total supply of 100,000,000, serves as the governance token of the platform, primarily used for liquidity incentives and staking rewards. In the initial V1 stage, Augusta Finance operated as the proxy for veVELO governance. Upon the transition to V2, Augusta Finance relinquished its voting power for veVELO and transferred this voting power to $AUGU token holders.
Staking $AUGU brings substantial benefits. In the V1 version, stakers enjoyed dividend rights, with a portion of the interest generated from lending and earnings from veVELO used to repurchase $AUGU tokens and distribute them to stakers. In the updated V2 version, staking rewards also come with voting power for veVELO, allowing stakers to independently decide the purpose of their voting power.
Conclusion
Augusta Finance, by focusing on the financial potential of veVELO NFTs, is slowly reshaping the NFTFi industry. Its innovative approach promises to solve several issues plaguing the current financial system, from liquidity to governance power. By providing collateral lending solutions and leveraging the interest-bearing and governance properties of veVELO NFTs, Augusta Finance is set to become an instrumental player in the crypto world.
