Poolz DeFi: Decentralized Layer-3 Swapping Protocol Based on Defi infrastructure

Introduction

As blockchain-cryptocurrency innovators are looking for decentralized, censorship-resistant ways of fundraising, there has been an emergence of Initial DeFi Offering (IDOs) and Initial Liquidity Offering (ILO). Furthermore, given the rise of Automated Market Makers (AMMs), a token’s liquidity has become a crucial determinant of its market price.

Although the market is becoming more competitive and value-oriented, early-stage innovators are facing unprecedented challenges due to these fast-paced changes. Prior to listing, they now have to seek liquidity investments for their tokens. In turn, however, the scenario presents new opportunities for early-stage investors, facilitating higher and more secure returns through liquidity mining.

About Poolz DeFi’s Project.

Poolz is a fully-decentralized, layer-3 swapping protocol that enables startups and project owners to auction their tokens for bootstrapping liquidity. As the blockchain-cryptocurrency community moves closer to absolute decentralization, Poolz empowers innovators in their pre-listing phase, bringing them closer to early-stage investors.

Investors, on the other hand, can leverage the Poolz platform to discover promising and disruptive projects with high potential value. In this sense, the platform offers a secured and intuitive way for investors to gain substantial, long-term returns from their assets.

How Does it Work?

The Poolz platform has two major user categories—Project Owners (PO) and Liquidity Providers (LP)—and distinct flows for each. For a high-level understanding of how it works, consider the following situations.

Before proceeding, note the following general information, that apply to both POs and LPs on the platform.

Supported Blockchains: Ethereum (MVP phase). In the future, Poolz will have multi-chain support and cross-chain integrations.
Supported Tokens: ERC20 (MVP phase). In the future, Poolz will integrate ERC721, along with multi-chain token standards.
Supported Wallets: MetaMask (MVP phase). In the future, Poolz will integrate WalletConnect, Coinbase Wallet, Fortmatic, and Portis, as well as other non-ERC20 wallets.

Poolz’s Solution

Poolz is a Layer-3 swapping protocol envisioning a decentralized way of connecting early-stage blockchain-cryptocurrency innovators and investors. Its unified interface allows project owners to launch and manage liquidity auctions that are easily discoverable by investors on the platform.

Starting off with Ethereum, Poolz embarks on a long-term mission to disrupt and fully decentralize liquidity auctions. The project is built with a vision to facilitate greater interoperability through cross-chain interactions, which in turn, will further strengthen DeFi adoptions and value.

Key Features of Poolz

Customizable pool options ensuring relevance for wide-ranging blockchain-based projects and use cases, alongside multi-chain integrations and support. Poolz is built with the long-term aim of enabling a unified interface with cross-chain interactions and other functionalities.
A fully decentralized, non-custodial, and trustless ecosystem with robust, Solidity-based smart contracts.
An interactive, intuitive, and responsive UI, coded in React for a smooth and seamless user experience. Moreover, Poolz integrates Web3 libraries to access continuous feedback from on-chain data, thus implementing necessary UI upgrades for optimum consistency.
Unit testing of smart contracts and network (developed in Truffle) code using Ganache, ensuring optimal bug-resistance and security.
Continual and multi-level incentivization mechanisms, facilitating recurrent gains for investors, liquidity providers, and yield farmers.
Due to Poolz’s optimized network and contract architecture, innovators require substantially lesser gas fee for registering their pools, as compared to existing market standards (see: Technical Considerations).

Poolz for Project Owners

Suppose, Marie is a project owner wanting to generate liquidity for her token before its DEX listing. In Poolz’s initial (MVP) phase, she can create pools for ERC20 tokens, but in the future, other token standards will also be usable.

Step 1: Marie selects the blockchain protocol relevant to her project and connects a wallet from the available options. Then, she clicks on ‘Create a Pool’ to initiate the process.

Step 2: She enters the basic token details, such as address (contract) and total supply allocated for this auction.

Step 3: Marie specifies the parameters of the auction, including inbound payment method (MVP Phase: ETH/DAI. Later, Poolz will support other swapping pairs). She will also specify the swapping ratio and the percentage discount for Poolz (POZ) token holders (for more details, read our litepaper).

Step 4: As the project owner, Marie also specifies the total duration of the pool. Poolz has two types of pools—Direct Sale Pool (DSP) and Time-Locked Pool (TLP).

In DSP, the auctioned tokens go to the liquidity provider’s wallet immediately after a successful swap. In TLP, Marie can specify the time-period after which the investor will receive the tokens. For example, 40% at the time of swapping and the remaining 60% in 6-equal monthly vesting.

Note: Both for DSP and TLP, Marie needs to specify the initial duration of the pool when it is exclusive reserved for POZ token holders, at the discounted price (see Step 3).

Step 5: After filling up the details, Marie clicks on the ‘Start’ button to register the pool on her chosen blockchain. At this point, the token allocation that she has specified is transferred from her connected wallet to a HTLC smart contract, where they are escrowed for the pool’s duration.

Apart from her auctioned token, the gas (transaction) fee for registering the pool on the blockchain will also be deducted from Marie’s wallet. However, due to Poolz’s innovative architecture, this fee is reduced by almost 85%, as compared to the standard market rates.

The Poolz Ecosystem

Broadly, there are two categories of Poolz users. One involves the Project Owners or Pool Creators, while Investors or Liquidity Providers (LP) comprise the other. In this section, we discuss available pool types, the user flows, pool states, and Poolz’s governance model.

Types of Pools

There will be two types of pools on the platform—Direct Sale Pools (DSP) and Time-Locked Pools (TLP).

Direct Sale Pools (DSP): These are pools without any lock-in period, where investors get the token immediately after the swap.
Time-Locked Pools (TLP): These pools have a predefined lock-in period and investors receive their swapped tokens only after the completion of this duration. Poolz’s smart contract will also enable pool creators to define custom lock-in periods, thus releasing the swapped assets incrementally. For instance, say, disburse 40% of the swapped tokens immediately and, after say 1 month, the remaining 60% in 6-equal monthly vesting.

Poolz for Liquidity Providers (Investors)

Now, imagine that Adam is an early-stage liquidity provider, who wants to invest in a promising project like Marie’s. Considering that they don’t know each other, Poolz can connect them in the following ways.

Step 1: Adam selects a blockchain ecosystem of his choice (in Marie’s case, Ethereum) and connects his compatible wallet (lists mentioned above).

Step 2: On the browsing page, he will be able to see all listed pools, with information like opening time, closing time, remaining time, token name, payment method, swapping ratio, and present status.

After connecting his wallet, Adam can click ‘Join’ to participate in an ongoing pool of his choice, for example, Marie’s pool.

If he is a POZ token holder, he can also join pools with the ‘Created’ status, when they are exclusively available to POZ holders. If not, then he can only join pools with the ‘Open’ status.

Step 3: After joining, Adam will enter the amount of base token, as per Marie’s chosen ‘payment method’. In the MVP phase, Poolz will support ERC20 tokens—ETH and DAI—as base tokens for liquidity. In the future, cross-chain integrations on the platform will enable more swapping pairs.

Instead of the base token, Adam can also input the amount of the auctioning token that he wants to buy. After his input, the Poolz’s algorithm will automatically calculate the corresponding values based on the pool’s data. He will also receive a disclaimer informing the risks associated with investments, which he can accept or deny.

Step 4: After accepting the disclaimer, a transfer will be initiated for the entered amount of ETH/DAI, plus a fee that goes to the Poolz wallet. Adam will have to confirm this transaction from his connected wallet.

Step 5: Depending on the pool’s type and duration, the swapped tokens will immediately go to Adam’s wallet, or after the specified time-period.

Benefits for POZ Token Holders

Access to exclusive pools: As already mentioned, every pool on the platform is limited to POZ token holders for an initial duration after its launch.
Access to better swap ratios: Exclusive pools also offer special discounts for POZ token holders, thus enhancing the possible returns for liquidity miners.

The Poolz (POZ) Token

POZ is the ecosystem’s native ERC-20 token and will be used for incentivization, governance, project development, and token burns. As for investors and liquidity providers, the POZ token’s ownership makes them eligible for a range of use-cases.

The POZ Token

POZ is the native token of the Poolz platform.

Token Name: PoolzDefi Token
Ticker: POZ
Type: ERC20
Initial Supply: 750,000
Total Supply: 5,000,000

Use Cases

The POZ token has several use-cases within the Poolz ecosystem:

Additional Benefits: Investors holding POZ tokens get additional benefits and better swap ratios for pools running on the platform, as outlined in the previous sections.
Governance: The Poolz platform will implement a regular Proof of Stake (PoS) consensus mechanism, enabling POZ holders to gain voting rights by staking their tokens is designated wallets. In general, the mechanism will involve limited-period staking, to be defined in details at the time of the platform’s governance launch.
Strike: POZ token holders will be able to generate annual passive income from their POZ tokens, by staking them in specific ERC20 wallets. As an incentive, POZ holders will gain staking rewards (discussed under allocation).
Token Burn: Poolz adopts a Limited Top Value Burn policy and will use 16.667% of its daily earnings to market buy POZ for token burning, with an upper limit of 20% of the total POZ supply.

Token Sale Metrics

Total Supply: 5,000,000 POZ
Seed Sale: 240,000 POZ, at 0.455 USD (avg. price). 25% TGE, then 25% quarterly.
Private Sale: 360,000 POZ, at 1 USD, with a capping of 2500 USD per person. 20% released on the day of sale and 20% after a month from the sale day. The remaining 60% is released as equal monthly vestings of 20%, for 3 months.
Auction Pools: 150,000 POZ to be auctioned at 1.6 USD.
Uniswap Listing Price: TBD.

Token Allocation & Circulation

Swapping Rewards: Out of the total supply, 1,850,000 POZ tokens (37%) will be allocated as swapping rewards for liquidity providers participating in pools listed on the platform. Swapping rewards will be available for 10 years, releasing 185,000 POZ per year (3,577 tokens per week). However, governance may decide changes to the vesting ratio in the future.
Mechanism: In proportion to their contributions, liquidity providers will gain a percentage of the total liquidity deposited over the current week. Swapping rewards on the platform will be calculated and disbursed every 4 hour and in weekly cycles. Suppose, LP (A) contributes to Pool (1) in the first 4-hour slot of Day(1)—Week(1). Now, if LP (A) is the only investor during this period, he/she get 100% of the swapping reward for that slot. Then, say, on the third 4-hour slot of Day (2)—Week(1), LP (A) would still be eligible for swapping rewards, but in proportion to the total liquidity deposited in the meanwhile. Likewise, LP (A) continues to get some reward for the remaining week.
Staking Rewards: 1,750,000 POZ (35%) will be allocated as staking rewards, to be circulated in the form of Average Annual Yields (AYY) POZ holders who stake their tokens in a compatible staking wallet. These tokens will be securely locked in a publicly-auditable Multi-Sig Wallet and will come into circulation over a period of 10 years, with a maximum capping of 175,000 tokens per year.
Private & Public Sale: 750,000 POZ (15%) will be allocated for private and public sales. At the time of writing, Poolz has concluded the seed sale of 240,000 POZ (4.8%) at 0.455 USD (avg. price) and the private sale of 360,000 POZ (7.2%) at 1 USD. Prior to listing, Poolz will conduct auction sales for 150,000 POZ (3%) at 1.6 USD.
Team & Advisors: 500,000 POZ (10%) will be allocated for incentivizing the Poolz team and its advisors. The team’s allocation will be disbursed over 6 months of equal vesting, after a lock-in period of 1 year. Advisors will receive their allocation similarly, but after 6 months of lock-in.
Liquidity Fund: 150,000 POZ (3%) will be allocated for providing liquidity on Uniswap and other exchanges after listing.

Roadmap

Q3 2020: Kick-starting Poolz

Platform, smart contract, and network development.
Seed sale completed.
Testnet Launched—built with Truffle and written in .NET core, for optimum security and stability.
Code published on GitHub: [LINK]

Q4 2020: Launching the MVP