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Author Topic: Benchmark Protocol’s First Supply Adjustment *Notice*  (Read 215 times)

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Nsatsdja

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Benchmark Protocol’s First Supply Adjustment *Notice*
« on: 06. January 2021., 13:44:11 »


We are pleased to announce that the Benchmark Launchpad will be coming to an end in the coming week. As such, Benchmark Protocol will undergo the network’s first supply adjustment. Thank you to everyone who participated in the Launchpad and supporting the foundational stages of building the Benchmark Community.

Supply Adjustment Go-Live Date

Benchmark Protocol will undergo the network’s first supply adjustment on December 28th, 2020 (EST). The end of the Benchmark Launchpad, block 11,519,083, is scheduled to get mined on the 24th of December, as we transition to The Press. Due to the Christmas holiday and the NYSE being closed on the 25th, we have decided to delay the rebase to the 28th to give LP providers extra time to claim their MARK rewards from the Launchpad.

On December 24th, at block 11519083, Benchmark Launchpad rewards will come to an end as planned. The Launchpad website will remain online indefinitely for everyone to withdraw their LP tokens. You will have until 12/28 at 4:15 PM EST to claim your MARK rewards, otherwise you risk receiving zero MARK rewards. All unclaimed MARK rewards at 12/28, 4:15 PM EST, will be transferred to The Press.

You can read about The Press here: https://medium.com/benchmarkprotocol/transitioning-from-benchmark-launchpad-to-the-press-80e480ee4bc7

You can follow the block countdown below:
https://etherscan.io/block/countdown/11519083

Oracle Overview

Discovery

Benchmark Protocol expands on existing elastic-supply systems and ventures into unknown territory with an innovative and unprecedented rebase function. We aim to further improve existing algorithms and connect traditional markets with the crypto economy by incorporating metrics from the real world economy into our rebasement. The Benchmark Oracle governs the supply adjustment algorithm of Benchmark Protocol.

The MARK token has an elastic supply. Unlike tokens with supply caps, Benchmark Protocol dynamically adjusts supply to adhere to the Peg, where 1 MARK equals 1 SDR Unit. If MARK is closer to its target value, the VIX will have a stronger carrying weight in the rebalancing mechanism.
MARK reaches equilibrium at 1 SDR by design. Of course, deviations from the equilibrium point will occur. When these deviations occur, the Benchmark protocol adjusts the supply of MARK tokens to assume a value of 1 SDR by expanding and contracting supply. Deviations away from 1 SDR unit take time to correct via the Benchmark Protocol and this puts the price action into a dynamic state. The protocol makes supply adjustments to resume a 1 SDR unit of valuation.

Benchmark Oracle

Similar to other rebase-supply systems that entered the space before, we expect some fine tuning to be necessary during the launch phase of Benchmark Protocol. For this reason, we decided that the initial provision of data inputs for the rebase algorithm will be provided by the executive board of Benchmark Protocol using multi-signature governance.

Third-party Decentralized Oracles

As long as Benchmark Protocol hasn’t proven the validity of the rebase algorithm, there are too many possible attack vectors to outsource the data provision of the rebasement to third-party decentralized oracles. Nevertheless, we intend to transfer this responsibility as soon as the concept has been proven and a stable price feed is ensured by high trading volumes.

Data Input

The Benchmark Protocol rebase algorithm relies on four different data points that need to be provided by an oracle:

1. Current price of MARK
2. SDR value of Q3 2020 ($1.407)
3. 5 day SMA of the VIX from the date of rebasement
4. 5 day SMA of the VIX from the last trading day

MARK and SDR must be denoted in the same currency (USD).

Algorithm

The rebasement will be initiated by the executive board of Benchmark Protocol and occurs on every New York Stock Exchange trading day within a 5 hour window after settlement of the CBOE Volatility Index (VIX).

The algorithm takes the percentage difference between current MARK price and target price (SDR Q3 2020) and divides it by 10 to apply a stretch over 10 days (I). Then the percentage difference between the 5 day SMA of the VIX from the date of rebasement and the last trading day gets added to the rebase value (II).

Formula:

(I) Stretch * (CurrentPrice — TargetPrice) / TargetPrice +
(II) (5 DAY SMA VIX 2–5 DAY SMA VIX 1)
= Rebase(I) + Rebase(II)

Examples:
See Data Input for definition.
$0.50
$1.42
24.21
25.09

(I) 10 * (0.50–1.42) / 1.42 +
(II) (25.09–24.21)
= -6.47% + 0.88%
= -5.59%

1. $2.00
2. $1.42
3. 24.21
4. 25.09

(I) 10 * (2.00–1.42) / 1.42 +
(II) (25.09–24.21)
= 4.08% + 0.88%
= +4.96%

Execution

The Benchmark Protocol rebase algorithm utilizes data from the New York Stock Exchange (NYSE) and therefore will only occur on official trading days.
No rebasement will occur on weekends and holidays where the NYSE is closed. The Following link provides a list of NYSE Holidays: https://www.nyse.com/markets/hours-calendars
Additionally, Benchmark Protocol introduces an arbitrage factor that allows the rebase to happen within 5 hours post settlement of the CBOE Volatility Index (4:15 PM EST to 9:15 PM EST).

Non-Dilutive

As a result of network rebalancing, the number of MARK tokens in the network changes proportionally across all stakeholders. The psychology of price-elastic token ownership is dominant and intuitive. Most network participants expect the number of tokens in their wallet to remain fixed as long as they do not buy or sell. As such, the price of each MARK token adjusts.

Network Ownership Remains Constant

Because each wallet in the Benchmark network experiences the effects of rebalancing proportional to its holdings, the network share entitled to the wallets remains invariable. As the network increases or decreases in market capitalization, the percentage stake in the network remains the same. The graphic below demonstrates how a changing market capitalization has zero impact on the network share of a wallet, even as tokenomics remain static (no incremental buying or selling on the network).

About Benchmark Protocol:

Benchmark Protocol is a Supply Elastic Collateral and Hedging Device, Driven by the Volatility Index. The protocol operates as a rules-based utility that dynamically adjusts supply based on the CBOE volatility index (VIX) and deviations from the target metric — equal to 1 Special Drawing Rights (SDR) unit. Employing the SDR creates a larger use case rather than exposure to just one currency; the application of this creates a larger user base and delineated exposure to markets around the world. The DeFi space needs a collateral utility that retains its efficacy and increases inherent, baseline liquidity during periods of high volatility.

Benchmark is built on the Ethereum blockchain. The MARK token is the native asset in the Benchmark network, and provides only the utility value available to it through the Benchmark network. The supply of MARK adjusts by tracking the movement of the CBOE volatility index.
Learn more

Website: https://benchmarkprotocol.finance/
Twitter: https://twitter.com/Benchmark_DeFi
Telegram: https://t.me/benchmark_protocol
Discord: https://discord.gg/v56syTZpMX

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Benchmark Protocol’s First Supply Adjustment *Notice*
« on: 06. January 2021., 13:44:11 »

 

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