DegenHive

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28 Aug 2024

Introduction

Overview
The official documentation for DegenHive [WIP]

DegenHive implements a DeFi powered Identity framework designed to launch and manage AI character NFTs composable across dapps supported by the protocol.

It is built in Sui Move and will go live on Sui network and Movement M2.

DegenHive - Overview

What can a user do on DegenHive?

As a user, you can do the following actions on the platform -

Trade tokens or provide liquidity to our AMM pools (PCL, stableswap, weighted)
Stake LP tokens and earn BEE and HIVE rewards
Stake SUI for degenSUI, which represents liquid staked SUI
Mint HiveProfile, manage and interact with AI character NFTs
Farm BEE rewards by using HiveChronicle dapp on Sui Network
Launch dynamic NFTs on the platform
Build and integrate dapps with the framework

Wen Launch?

DegenHive is set to go live on 14th August on Sui Network via a vampire attack and fair-launch mechanics which lasts 15 days.

DegenHive - Launch mechanics

20% of HIVE tokens and 30% of BEE tokens will be distributed among launch particpants who will help bootstrap our Liquidity Pools and enable price discovery of BEE and HIVE tokens on Sui network.

Note: DegenHive will also go live on Movement M2 network when it goes live. Same BEE and HIVE tokens will be bridged to Movement M2 chain for DAO governance.

Important Links 🔗

Discord - https://discord.gg/YCvE53B6ku
Twitter - https://twitter.com/DegenHive

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Fair Launch

Upcoming Vampire attack and fair price discovery phase
DegenHive's launch consists of 2 phases,

Phase 1 (9 days) - Vampire attack on existing DEXes on Sui network. Designed to bootstrap liquidity in DegenHive's AMM pools and Liquid staking impl. via degenSUI
Phase 2 (9 days)- Centered around community led price discovery of BEE and HIVE tokens

Phase 1 (Vampire attack)

Users have two paths to participate in Phase 1 and earn a share of 8% of the HIVE supply:

Lock SUI: Lock your SUI tokens for a chosen duration to help bootstrap DegenHive's Liquid staking impl.
Deposit LP Shares: If you're already providing liquidity on Cetus, Kriya, or FlowX, you can deposit your LP shares (NFTs or tokens). Your liquidity will be automatically migrated to DegenHive's AMM pools, and you'll receive HIVE as a reward for participating.

Rewards for Participating in Phase 1:

LP shares: Receive pro-rata LP shares of the corresponding DegenHive AMM pool, claimable after your chosen lockup period ends. These represent your ownership in the pool and entitle you to a portion of its fees.
HIVE Tokens: Earn HIVE tokens, which can be used for participation in Phase 2 (Infusion) or claimed once the platform is live.
LP staking rewards : Earn BEE and HIVE as LP staking rewards along with 3rd party rewards (if any)

Phase 1 - Vampire Attack participation mechanics Overview

Phase 2 (Price discovery)

Phase 2, or the Infusion phase, focuses on establishing fair prices for HIVE and BEE tokens while bootstrapping liquidity for the SUI-HIVE and SUI-BEE pools. This phase lasts for 9 days, with participation mechanics similar to Phase 1.

Participating in Phase 2: Infusion

Users can contribute to Phase 2 by depositing HIVE tokens earned in previous phases (Airdrop or Lockdrop) or by depositing SUI. Note that once deposited, HIVE cannot be withdrawn until the end of Phase 2.

Rewards for Participating in Phase 2:

SUI-HIVE LP Shares: These are granted pro-rata based on the amount of HIVE and SUI deposited. These shares vest linearly over 9 months, ensuring a gradual release of liquidity and promoting long-term commitment to the platform.HIVE Rewards: Additional HIVE tokens are awarded as participation incentives, claimable after the platform is live
BEE Rewards: Users who deposit SUI during this phase receive a share of BEE's 15% supply.
Staking Rewards: Participants will also receive BEE and HIVE staking rewards from HIVE-SUI LP tokens, along with any additional third-party rewards associated with their deposited assets.

Price Discovery

The final ratio of HIVE to SUI and BEE to SUI within the pools at the end of Phase 2 establishes the initial trading price for HIVE and BEE tokens. This community-driven mechanism ensures a fair and transparent price discovery process.

Phase 2 - BEE and HIVE price discovery

Phase 1: Vampire Attack

The primary goal of Phase 1 is to put tokens in the hands of users, with the amount of tokens users earn should be proportional to the “value” they bring to the protocol. “Value” here is measured in-terms of your commitment to use the protocol in the future.

This section details how users can participate and the rewards they stand to gain.

How to Participate

Users can participate in the Lockdrop in one of two ways:

Vampire Attack (Liquidity providers): Existing Liquidity Providers (LPs) on existing DEXes (Cetus, Kriya, FLowX) can pre-commit to switch their LP positions for varying time periods, earning a pro-rata share of HIVE as participation reward. This directly contributes to bootstrapping liquidity for our AMM pools.
Degen Staking (Liquid Staking via degenSUI): Users can deposit SUI which will be used to bootstrap liquidity for DegenHive’s liquid staking layer and SUI-degenSUI AMM pool.

Phase 1 - Participation mechanics overview

Timeline and Flexibility

Phase 1 spans 9 days, offering flexibility and strategic decision-making for users:

Phase 1 - Timeline

Days 1-7: Users can freely deposit and withdraw liquidity, allowing them to optimize their positions based on perceived rewards.
Days 7-9: Only withdrawals are permitted, limited to 50% of the initial deposit at the start of day 6 and decreasing linearly to 0% by the end of day 9. This prevents manipulation and ensures fair price discovery.

Incentives for Participation

Users receive the following rewards for participating in Phase 1:

LP Shares: Receive a pro-rata share of DegenHive AMM pool LP tokens based on your contribution. These tokens unlock after your chosen lock-up period and represent your ownership in the pool, entitling you to a share of its fees.
HIVE Rewards: Earn HIVE tokens, usable for participation in Phase 2 (Infusion) or claimable once the platform is live.
Staking Rewards: DegenHive LP tokens are automatically staked, earning BEE and HIVE rewards, along with any additional third-party incentives from the original pool.

HIVE incentives for participating in phase 1

Important Notes

Early Unlocking: Users can unlock their locked DH LP tokens before the lockup period ends in case of emergencies, but a 13% fee will be charged.

By participating in Phase 1, users actively contribute to DegenHive's launch success while positioning themselves for future rewards and governance influence.

Phase 2: BEE & HIVE price discovery

Phase 2, or the Infusion Phase, serves as a critical price discovery mechanism for HIVE and BEE tokens. It also aims to establish ample initial liquidity for these tokens. The phase lasts for 9 days, with participation mechanics similar to Phase 1.

Participation Mechanisms

Users have two options to participate in Phase 2:

Deposit HIVE for SUI-HIVE Pool: Users can deposit HIVE tokens earned in earlier phases (Airdrop or Lockdrop). In return, they receive a proportional share of SUI-HIVE LP tokens and additional HIVE rewards.
Deposit SUI for SUI-HIVE and SUI-BEE Pools: Users can deposit SUI to participate in both the SUI-HIVE and SUI-BEE pools. They will be rewarded with proportional shares of SUI-HIVE LP tokens, plus additional HIVE and BEE rewards.
- Notably, 15% of the total BEE supply is allocated for distribution among SUI depositors in this phase.

Partcipation mechanics for phase 2

Timeline and Withdrawal Dynamics

Days 1-7: Users can freely deposit HIVE (which becomes non-withdrawable) and SUI (which remains withdrawable) during this period.
Days 7-9: SUI withdrawals are limited to a single instance per Phase 1 position. The maximum withdrawal amount starts at 50% of the deposit on day 6 and linearly decreases to 0% by the end of day 9.
- This design mitigates potential manipulation and ensures fair price discovery.

Participation Timeline for phase 2

Incentives for Participation

Phase 2 participants are rewarded generously:

LP Shares: Receive pro-rata SUI-HIVE LP shares based on your HIVE and SUI deposits. These shares vest linearly over 9 months, promoting long-term commitment to the platform.
HIVE rewards: Earn additional HIVE rewards (for both HIVE and SUI depositors), claimable once the platform goes live.
BEE rewards against their deposited SUI which can be claimed once platform is live.
BEE and HIVE LP staking rewards : DegenHive LP tokens are automatically staked, allowing participants to earn BEE and HIVE staking rewards, along with any third-party incentives associated with the underlying pools.

HIVE incentives for participating in phase 2

SUI Allocation and Price Discovery

The total SUI pooled during Phase 2 is utilized as follows:

40% for SUI-HIVE Pool: This portion is paired with deposited HIVE to create the SUI-HIVE pool. LP tokens are distributed pro-rata among participants and vest over 9 months.
50% for Core Developers: Reserved for the core development team.
10% for SUI-BEE Pool & Burn: The remaining 20% of SUI, combined with 15% of the BEE supply, establishes the SUI-BEE pool. The resulting LP tokens are burned, ensuring permanent liquidity lock-up.

The final ratio of SUI to HIVE in the SUI-HIVE pool at the end of Phase 2 determines the initial HIVE trading price. This community-driven process ensures a fair and market-reflective valuation.

Price Discovery Mechanism

The final ratio of SUI to HIVE in the HIVE-SUI pool determines the implied exchange rate between the tokens. For example, if users deposit 100 HIVE and 100 SUI, the implied HIVE to SUI exchange rate is 0.4 SUI (since 40% of SUI is allocated to the HIVE-SUI pool).

BEE and HIVE token prices given different participation scenarios

Tokenomics

DegenHive introduces a dual-token economy designed to facilitate governance and drive adoption of its HiveProfile objects driven identity framework.

The two core tokens are:

HIVE: The governance token and primary social currency, essential for participation in protocol governance and facilitating transactions within the ecosystem. Its deflationary nature ensures scarcity over time.
BEE: A meme-inspired token with a 3% burn tax on every transfer.

To ensure a sustainable economic model that benefits all participants, the protocol integrates key DeFi primitives such as liquid staking and AMM pools (PCL stableswap, weighted). These mechanisms help capture value generated by the social graph and redistribute it among users via "Lock and burn" model.

DeFi yield is used to incentivize activity and adoption of the Social Graph

Honey-Stream Auctions and the Lock-and-Burn Model

Just like Bee colonies which farm honey as a food source that sustains the colony through winter and periods of adverse weather, DegenHive employs a honey stream powered "Lock-and-Burn" mechanics designed to onboard new creators, where the revenue generated by the protocol (in SUI or MOVE) is streamed into our BEE and HIVE AMM pools. Here, liquidity is perpetually locked, which should prove invaluable during harsh market conditions, providing a steady foundation for our community.

DegenHive will be deployed as self-governed instances on both Sui network and Movement's M2 chain, with HIVE and BEE tokens bridged across instances on a 1:1 basis, with honey streams operating as following on both instances -

On Sui Network: SUI earned as protocol earnings streamed to SUI-HIVE, SUI-BEE and SUI-degenSUI AMM pools
On Movement M2: MOVE earned as protocol earnings streamed to MOVE-HIVE, MOVE-BEE and PCL AMM pools

LP tokens minted against liquidity addition are burnt, perpetually locking liquidity in these pools. This continuously increases liquidity depth in these pools, reducing the need for external incentives and ensuring efficient token trading.

Honey Streams power the DegenHive economy towards self sustainability over time

HIVE : Governance token

Governance and the In-Social Currency of the platform
HIVE serves as the governance token and is the social currency of the platform on both Sui network and Movement M2 chain.

Key utility and use-cases

Once deposited in the HiveProfile, HIVE tokens facilitate various pivotal activities within the DegenHive ecosystem:

Governance participation: Users can deposit HIVE in HiveAsset NFTs which can then be staked to obtain voting power in protocol governance.
- Users earn degenSUI (on Sui Network) or MOVE (on Movement’s M2 chain) alongwith HIVE as staking yield for governance participation.
- Voting power is determined by the following formula -

HIVE is required for participating in governance and earn pro rata share of protocol yield

Subscription Payments: HIVE facilitates subscription payments between HiveProfiles, with payments settled pro-rata based on the subscription’s dollar denominated price.
- The HIVE to dollar exchange rate is provided by a TimeWeighted Average Price (TWAP) oracle.

HIVE is used to settle subscription payments for special access to NFTs on the social graph

Entropy Points which limit user-action: The number of permissible user actions per epoch on DegenHive’s social graph is constrained by the user’s HIVE balance and voting power.
- A portion of a user’s HIVE balance is temporarily locked proportional to the entropy points expended during the current epoch.

Entropy points to limit user action across dapps

Long-Term Sustainability

The following mechanisms are designed to ensure the long-term sustainability of the HIVE token within the DegenHive ecosystem:

Deflationary Mechanism - A portion of subscription fees are burned, reducing HIVE supply.
Lock-and-Burn Model - Recurring Honey-Stream auctions generate revenue in SUI on the Sui network and in MOVE on Movement’s M2 chain which are added as to SUI-HIVE and SUI-MOVE AMM pools with LP tokens being burnt, perpetually locking liquidity in these pools

Honey Stream keeps perpetually adding liquidity in SUI-HIVE and SUI-BEE pools

HIVE Supply distribution

The HIVE has a total supply fixed at 1 billion units. This supply is strategically allocated across various segments of the ecosystem to ensure balanced growth, incentivize participation, and secure the protocol’s long-term viability. The distribution is as follows:

Launch Phase (20%): Includes airdrops, lockdrops, and an infusion phase rewards aimed at attracting early users and liquidity providers
Honey-Stream Incentives (10%): Engagement with honey-streams are incentivized as they help power the protocol’s sustainable economic model through a Lock-and-Burn model.
Protocol Treasury (40%): Utilized for liquidity provider incentives and to fund platform growth initiatives, as governed by the protocol’s governance processes.
Development Team (20%): Reserved for the core DegenHive development team to incentivize ongoing development and maintenance. These tokens are vested over three years and grant the team voting rights in protocol governance, although they do not accrue staking yield during the vesting period.
Early Backers (15%): Set aside for early backers and investors who supported the project’s initial phases.

HIVE Supply distribution

BEEs : Meme-coin

BEE meme-coin fueling creation and curation of open datasets on the Social-Graph
BEE is DegenHive’s native meme-coin, implemented as a closed-loop token designed to incentivize activity across the protocol. It features a deflationary model with a 3% burn tax applied to every transfer.

Key utility and use-cases

Engagement Rewards: BEE tokens are earned as rewards for both content creation (posting buzzes) and content curation (like, comment) activities and for engaging with Honey Stream content.
Deflationary Supply: The 3% burn tax on transfers progressively reduces the circulating BEE supply over time and offsets new BEE being introduced in circulating supply as incentives

Long-Term Sustainability

Similar to HIVE tokenomics, recurring Honey-Stream auctions generate revenue in SUI on the Sui network and in MOVE on Movement’s M2 chain which are added as to SUI-BEE and SUI-BEE AMM pools with LP tokens being burnt, perpetually locking liquidity in these pools.

BEE Supply and Distribution

BEE has a fixed maximum supply of 420 billion tokens. At launch, 20% of total SUI collected during infusion phase are paired with 15% of the BEE supply and added to the AMM pool, with LP tokens being burnt forever ensuring sustained liquidity in the pool. Overall BEE supply distribution is as follows:

Bootstrapping SUI - BEE Pool (15%): 15% of the BEE supply along with 20% of the SUI deposited during phase 2 are used to bootstrap the BEE-SUI AMM pool, with corresponding LP tokens being permanently burned perpetually locking liquidity in the pool.
Infusion Participation incentives (15%): Allocated among users participating in the second phase of the protocol launch based on their pro-rata share of SUI deposit.
Time-Stream Incentives (20%): Engagement with honey-streams are incentivized as they help power the protocol’s sustainable economic model through a Lock-and-Burn model.
Treasury (50%): Accessible via protocol governance to fund growth initiatives on DegenHive.