Sifchain Public Token Sale Announcement
Tags: Sifchain, Token Sale

Using Rowan

On the first day of the token sale, Sifchain will deploy a BetaNet version of the protocol. Thus, token sale participants will be able to convert eRowan to Rowan via cross-chain Ethereum<>Sifchain transactions. In effect, users will be able to pool, stake, and/or delegate their tokens on-chain. Therefore, Sifchain’s tokens will have utility from the very first day. Read on to see how you can use Rowan. Our Token Economics Paper is a great resource if you want to learn even more.

Staking

Validators secure the Sifchain network by ensuring the legitimacy of transactions. By staking Rowan, you receive validator tokens. Validators receive block rewards. The more transactions that occur on Sifchain, the more block rewards there are for validators.

Block rewards vary according to an inflation rate set by Sifchain governance, to yield an annual percentage rate (APR) between 10% and 100% (mostly below 30%). Staking requires you to run a validator. Instructions are accessible here.

Block rewards are rebalanced with liquidity provider income in order to generate validator income. Liquidity provider income varies from pool to pool: between 1% and 100% (mostly below 30%).

This rebalancing policy works between two subsystems with similar ranges, albeit different market forces. The two subsystems’ rewards are kept even over time, so that users are incentivized to deploy capital to both subsystems, in a way that keeps roughly the same amount of capital in each subsystem.

Delegating

If you want to support Rowan’s crypto-economic security but cannot run your own validator, you can delegate your capital to a validator. Delegators earn validator tokens, minus a commission rate retained by the validator.

The commission fee is used by the validator to sponsor technical improvements to Sifchain. Validators are encouraged to offer reports about their contributions to Sifchain’s technical infrastructure. Delegators are encouraged to select validators based on their ability to support Sifchain’s technology innovations.

Pooling

You can pool Rowan and eRowan in Continuous Liquidity Pools (CLP). You can also set up a CLP. When tokens are traded/swapped, poolers earn swap fee revenue according to the pool they select. Liquidity pool rewards are given through on-chain mechanisms which are fully automated and autonomous of any single user.

As the market sets pool APR for Sifchain, we expect them to normalize against rates for pools on other decentralized exchanges (DEX) like Uniswap and Sushiswap which use a liquidity formula known as XYK.

In BetaNet, all pools will use the CLP liquidity swap formula inspired by THORChain. The following formula determines a slip-based fee, with a higher fee charged to the trader when their swap causes a larger price slip.

As verified here in a Gauntlet Network multi-agent simulation of profit seeking traders, liquidity pools with Sifchain’s CLP swap formula attract more liquidity than those with an XYK model. Traders benefit from lower trading fees against this deeper liquidity. Poolers with the CLP formula also benefit from strong swap demand and earn more revenue overall than XYK poolers.