Void Anonymity Pools (VAPs)
The first and foremost incentive and use case of the Void Protocol is to grant each user on Osmosis, and within the Cosmos, the option to opt-in to financial privacy. This is extremely important in today's world where almost nothing is private by default, and as we increasingly use the blockchain for payments, DeFi, NFTs and real world purchases, privacy over one's history and balances will only become more important. True decentralization has a huge place for privacy and we hope to fill the gap on Osmosis.
To maximize the chance of achieving full privacy, we recommend to leave funds in the pool for as long as possible, ensuring many deposits and withdrawals have occurred since your deposit. Many factors help achieve privacy, we will build a gauge to offer some indication of anonymity.
A major goal of Void is to ensure capital remains productive whilst the user has to wait for the anonymization process to complete. Being built on Osmosis, Void Protocol will be looking to implement yield-bearing strategies on all of the VAPs. This helps Void Protocol in a few different ways:
- Encourages users to leave funds in the pool for an appropriate amount of time
- Increases the Void Anonymity Pool TVL helping all users achieve anonymity
- Reduces opportunity cost of time spent in pools, if earnings are attractive enough some users may leave funds in the pools almost indefinitely
- Portion of yield earnt can be distributed to other areas of the protocol, eg a small portion of earning used to buy $VOID and reward governance
One idea of a strategy on Osmosis is to allow for native staking of the assets from within the VAPs, this would incur an un-bonding period before users can withdraw from the pools but would allow for very attractive long term rewards for those who deposit and enable this strategy on assets.
A portion of token supply is reserved for platform rewards. This, alongside the yield-bearing strategies implemented, will provide a decent return and a reason for users to leave their funds in the pools for an appropriate duration. This helps the capital inside the pools remain productive which in turn lessens the opportunity cost of anonymizing. This again will also help contribute to a healthy TVL.
33.5% of the token supply is reserved for platform rewards, the current split starting at 10% for LP rewards and 23.5% for Void Anonymity Pool rewards.
Leaving funds in the pool for X amount of time is a requirement to achieve anonymous funds, but we don't want the user to feel like there are no options with their capital. Funds will not be locked into the pools for a set time, it is up to the user to ensure they are leaving funds in for an appropriate time. Depending on the yield-bearing strategies chosen, users may have the option to lock up their funds in return for better rewards.
Users will have the option to slowly withdraw out of their deposit instead of withdrawing it all in one lump sum*. This will allow people to leave portions of capital in the pools to earn, increasing TVL. It also allows people to take extra precautions over-time by using burner wallets for each withdrawal. Note: extra safety measures will need to be taken to to avoid tying the transactions together. *This feature will be introduced after MVP.
A distant goal in the continuation of the protocol is to allow users to lock down their capital for X number of months, granting themselves access to the future yield their funds would produce over those X months. This would allow someone to lock up most of their capital, but still be granted access to anonymous capital to use while their stack of funds is anonymizing.