Epsilon builds reserve currency protocol on Serum ecosystem — Serum Stories #19
Protocols building reserve currencies like Olympus, Wonderland and Redacted Cartel have seen lots of activities in the past few months. The Epsilon team is here to bring reserve currency onto the Serum ecosystem.
This team has been relatively under the radar and gearing up towards launch in the weeks to come. Who is Epsilon? What are the team up to? Read on and find out!
- For those who are not already in the know, what is your 30 second elevator pitch for Epsilon?
Epsilon is a decentralized entity focused on research and technology, all backed by a reserve currency.
We seek to gather a top team of anonymous talent, and become a sort of “hub” for innovation and research on Solana.
2. How did you decide to build Epsilon?
Our vision is to create an on-chain paradigm which participates in investing, research, and technology. Similar to Wonderland and Redacted Cartel, we fuel our activities through the innovative reserve currency design popularized by OHM, with our own spin on further democratization.
3. For the readers who are not familiar with OHM, Wonderland and Redacted Cartel, can you give us a ELI5 of reserve currency design?
The function of a reserve currency is to serve as the backbone for whatever protocol or DAO it serves. In the case of Epsilon, the EP token will serve as this backbone, and will be backed 1:1 by a dollar pegged asset. This will help ensure the strength of the entire DAO, and in turn the projects developed in partnership with Epsilon.
4. Tell us about your experiences with building on Solana and Serum. How does Serum power your product suite?
Epsilon uses Atrix LP tokens to tap into Serum volume and make LP fees. These fees go into the treasury, providing additional profits for the DAO. Serum’s long term vision has always been attractive for us, and we feel that it aligns very strongly with our core principles.
5. Can you tell us more about the reserve currency you’re working on?
Our reserve currency, EP, is a multifaceted token which aims to provide value to holders in various ways. Stakers will receive rewards in the form of EP, and passive REP (explained below) will be rewarded to those that stake EP for a certain period of time.
6. There’s also REP, an innovative governance system. How does that differ from the traditional governance system? What are the pain points you observe from the traditional governance system that you’re trying to solve from this new system?
REP is our response to a glaring problem when it comes to the governance of many projects; that being inactive whales. REP is a non-transferrable token that is earned through contribution to the Epsilon project, and is split into passive and active components. Passive REP is delegated to those that simply stake EP, whereas active REP will be delegated to those that are active in the community via research, community management, pull requests, and more.
We are trying to solve the issue of governance being weighed solely in the direction of the top holders by giving more voting power to members that are actively improving the Epsilon experience.
7. The past few months we have seen the rise of Defi 2.0, and protocol owned liquidity is one of the features of this new era of Defi. How does the bonding mechanism work for Epsilon?
The bonding mechanism allows users to buy EP at a discounted price to market rates while providing the treasury with additional assets. These assets can be reserve currencies to back EP, such as USDC, or protocol owned liquidity such as EP-USDC LP tokens. Bonded EP can be redeemed after the vesting period, which is currently 5 days, and accrues staking rewards while vesting.
8. On Twitter you teased that the launch is coming soon. What can the community expect in the coming weeks?
We are cultivating partnerships with various projects that share our philosophy, and specifics regarding this will hopefully be released some time in mid/end of January. We’re working quietly and can’t wait to show the community everything that we have ready.
We hope you enjoyed the interview!
We would love to continue having these kinds of conversations with all the incredible teams building on Serum and sharing them with you. Just let us know who you want to read about next.
Meanwhile, follow Epsilon’s development on their Twitter.