{"signature": "0xc622c48bcc2e5fc175c8f213872f2d1f2f5e8d324c1f21e8b4006e6101a29e424569fbaf04726e35faa031a92f04ef6b12d27177dc1afbdba0bd43198726067f1c", "application": {"round": "0x0b33428de19ae46f72e8888cd1c0102ed49afa87", "answers": [{"type": "email", "hidden": true, "question": "Email Address", "questionId": 0, "encryptedAnswer": {"ciphertext": "DdvcatbtJ784f1cjDX/27d2mdHlrGwvhxgm9nhGnVdTebzFmwxUfxIINGa/L6eND", "encryptedSymmetricKey": "20b39ff4c61ee79156930a3d6a498cbe8d6e401aaecd0c0a27f6683aba223468b04989e5cedf451d8e8c495003015508fa0acadbcae4ba96a6d171405f1d3b8b6ce387df795b64e95d2aa179ef42121b6b0249b14f4351976de68311cffbf6b25b66b6671693a6b399d7314420ca8225ac0fd97343c4e34d3f26439711620cf600000000000000206b334ff178f6502820f832f4afa9ca8702399dc8e1f34b6057c9b7954d7b16e0cdae6b88a99def9b37ae85e75c76eba8"}}, {"type": "short-answer", "answer": "yavuzhanz_uzi", "hidden": true, "question": "Avalanche Forum Username:", "questionId": 1}, {"type": "short-answer", "answer": "https://github.com/InverterNetwork", "hidden": true, "question": "Project GitHub Repository:", "questionId": 2}, {"type": "dropdown", "answer": "Existing Bridge Contract Enhancements", "hidden": true, "question": "Which theme does your project primarily focus on? (Select one)", "questionId": 3}, {"type": "paragraph", "answer": "Overview of Inverter Network\nEstablished in 2023 in Switzerland, Inverter began as a research project to design a modular protocol infrastructure for programming token economies. In early 2024, Inverter introduced the Primary Issuance Markets (PIM) stack.\n\nIn short, PIMs enable projects to perpetually capture value from their token economies by facilitating dynamic token issuance with programmable distribution. In the initial version of PIM, bonding curves are utilized as the main dynamic issuance mechanism.\n\nKey Features of Primary Issuance Markets (PIM):\n\nDynamic Token Issuance and Pricing: PIMs utilize algorithmic pricing for minting and redeeming tokens, which includes a reserve ratio and trading fees. This setup allows projects to dynamically adjust token supply based on market conditions and project needs.\n\nMarket Value Capture: PIM allows projects to profit from their tokens' trading volumes and volatility, capturing value from the token activity that previously only benefited external parties like third-party market makers and exchanges.\n\nSustained Treasury Growth and Stability: Proceeds from token issuance contribute to increasing project reserves, establishing a price floor, growing the treasury, and supporting long-term development without dumping on the community.\n\nArbitrage Opportunities: Protocol-owned arbitrage agents ensure price stability and generate additional revenue when secondary market prices diverge from PIM-set prices.\n\nPrimary Issuance Market Stack (PIM Stack)\nInverter\u2019s Primary Issuance Market (PIM) stack is designed to enable projects to seamlessly configure and operate the full life cycle of token economies. PIM stack enables builders to customize token issuance, utilities, and circulation for custom use cases.\n\nKey Features of Inverter\u2019s PIM Stack:\n\nPlug & Play DeFi Functionalities: Inverter offers reusable, upgradable, and interoperable DeFi integrations, allowing subnets to design token economies without needing contract development.\n\nAlgorithm Library: Custom algorithms, such as dynamic pricing, condition the issuance logic of tokens through issuance curves, optimizing the token economy.\n\nAgent Library: Projects can activate verifiable arbitrage agents to market-make for their PIMs, optimizing issuance parameters based on real-time data, credit scoring, and additional services.\n\nOur Value Proposition\nBy leveraging PIM, Inverter focuses on various dynamic token issuance models for subnets and introduces the following benefits to the Avalanche Teleporter Ecosystem:\n\nDynamic Issuance via Bonding Curves:\n\nWhen a project without an existing token on the C-Chain sets up a Subnet for the first time, users cannot obtain gas tokens due to a lack of liquidity. As a result, the funds available on the C-Chain cannot be utilized effectively. This creates difficulties during the initial onboarding phase, hindering the smooth establishment of the new Subnet.\n\nPIM allows users to send their AVAX from the C-Chain directly to a bonding curve on the Subnet via Teleporter. This mechanism dynamically issues the Subnet tokens in response to the amount of AVAX sent, effectively addressing liquidity issues.\n\nPIMs leverage bonding curves to create a market for any token by offering algorithmic bids and asks at each level of token supply without needing any liquidity provider or bootstrapping. This ensures that the token is tradeable from the moment of origination, making it an ideal solution for launching tokens without fundraising.\n\nBy facilitating the direct transfer and real-time issuance of tokens, Inverter ensures that users have immediate access to the necessary gas tokens, thereby smoothing the onboarding process and the setup of a new Subnet.\n\nDynamic Issuance via Oracles:\n\nWhile major L1 projects have performance-based issuance models, such as rewarding validators through successful block production, their static nature limits current issuance models. They need dynamic incentives to meet specific objectives. This inflexibility results in static token economies that fail to reflect real-time performance metrics, leading to suboptimal alignment within the economic actors in the ecosystem.\n\nOur solution integrates oracle-signaled issuance for subnet tokens, linking the issuance logic to on-chain and off-chain verifiable data. We create performance-aligned token economies by dynamically adjusting issuance according to set KPIs. This ensures that incentives are closely tied to real-time performance metrics, fostering a more engaging ecosystem where stakeholders\u2019 behaviors are tied to economic incentives.\n\nFuture Steps\nTreasury Management for Subnets\n\nThere is a lack of low-risk treasury management options for AVAX tokens that are bridged to subnets. This limits subnets' ability to utilize their bridged AVAX tokens efficiently and securely.\n\nCreating a Collateral Vault mechanism using the Teleporter allows subnets to efficiently use their reserves on the C-Chain. AVAX in this Collateral Vault can be used for liquid staking, providing low-risk options, and for other DeFi protocols, such as lending, if higher risk is desired.\n\nCollateralized AVAX tokens can be converted into sAVAX or ggAVAX to earn rewards via GoGoPool or Benqi.\n\nCollateralized AVAX tokens can be deposited into lending protocols like Benqi.", "hidden": true, "question": "Please explain how your project aligns with the Avalanche Teleporter ecosystem and contributes to its growth and development:", "questionId": 4}, {"type": "paragraph", "answer": "Overview of Inverter Network\nEstablished in 2023 in Switzerland, Inverter began as a research project to design a modular protocol infrastructure for programming token economies. In early 2024, Inverter introduced the Primary Issuance Markets (PIM) stack.\n\nIn short, PIMs enable projects to perpetually capture value from their token economies by facilitating dynamic token issuance with programmable distribution. In the initial version of PIM, bonding curves are utilized as the main dynamic issuance mechanism.\n\nKey Features of Primary Issuance Markets (PIM):\n\nDynamic Token Issuance and Pricing: PIMs utilize algorithmic pricing for minting and redeeming tokens, which includes a reserve ratio and trading fees. This setup allows projects to dynamically adjust token supply based on market conditions and project needs.\n\nMarket Value Capture: PIM allows projects to profit from their tokens' trading volumes and volatility, capturing value from the token activity that previously only benefited external parties like third-party market makers and exchanges.\n\nSustained Treasury Growth and Stability: Proceeds from token issuance contribute to increasing project reserves, establishing a price floor, growing the treasury, and supporting long-term development without dumping on the community.\n\nArbitrage Opportunities: Protocol-owned arbitrage agents ensure price stability and generate additional revenue when secondary market prices diverge from PIM-set prices.\n\nPrimary Issuance Market Stack (PIM Stack)\nInverter\u2019s Primary Issuance Market (PIM) stack is designed to enable projects to seamlessly configure and operate the full life cycle of token economies. PIM stack enables builders to customize token issuance, utilities, and circulation for custom use cases.\n\nKey Features of Inverter\u2019s PIM Stack:\n\nPlug & Play DeFi Functionalities: Inverter offers reusable, upgradable, and interoperable DeFi integrations, allowing subnets to design token economies without needing contract development.\n\nAlgorithm Library: Custom algorithms, such as dynamic pricing, condition the issuance logic of tokens through issuance curves, optimizing the token economy.\n\nAgent Library: Projects can activate verifiable arbitrage agents to market-make for their PIMs, optimizing issuance parameters based on real-time data, credit scoring, and additional services.\n\nOur Value Proposition\nBy leveraging PIM, Inverter focuses on various dynamic token issuance models for subnets and introduces the following benefits to the Avalanche Teleporter Ecosystem:\n\nDynamic Issuance via Bonding Curves:\n\nWhen a project without an existing token on the C-Chain sets up a Subnet for the first time, users cannot obtain gas tokens due to a lack of liquidity. As a result, the funds available on the C-Chain cannot be utilized effectively. This creates difficulties during the initial onboarding phase, hindering the smooth establishment of the new Subnet.\n\nPIM allows users to send their AVAX from the C-Chain directly to a bonding curve on the Subnet via Teleporter. This mechanism dynamically issues the Subnet tokens in response to the amount of AVAX sent, effectively addressing liquidity issues.\n\nPIMs leverage bonding curves to create a market for any token by offering algorithmic bids and asks at each level of token supply without needing any liquidity provider or bootstrapping. This ensures that the token is tradeable from the moment of origination, making it an ideal solution for launching tokens without fundraising.\n\nBy facilitating the direct transfer and real-time issuance of tokens, Inverter ensures that users have immediate access to the necessary gas tokens, thereby smoothing the onboarding process and the setup of a new Subnet.\n\nDynamic Issuance via Oracles:\n\nWhile major L1 projects have performance-based issuance models, such as rewarding validators through successful block production, their static nature limits current issuance models. They need dynamic incentives to meet specific objectives. This inflexibility results in static token economies that fail to reflect real-time performance metrics, leading to suboptimal alignment within the economic actors in the ecosystem.\n\nOur solution integrates oracle-signaled issuance for subnet tokens, linking the issuance logic to on-chain and off-chain verifiable data. We create performance-aligned token economies by dynamically adjusting issuance according to set KPIs. This ensures that incentives are closely tied to real-time performance metrics, fostering a more engaging ecosystem where stakeholders\u2019 behaviors are tied to economic incentives.\n\nFuture Steps\nTreasury Management for Subnets\n\nThere is a lack of low-risk treasury management options for AVAX tokens that are bridged to subnets. This limits subnets' ability to utilize their bridged AVAX tokens efficiently and securely.\n\nCreating a Collateral Vault mechanism using the Teleporter allows subnets to efficiently use their reserves on the C-Chain. AVAX in this Collateral Vault can be used for liquid staking, providing low-risk options, and for other DeFi protocols, such as lending, if higher risk is desired.\n\nCollateralized AVAX tokens can be converted into sAVAX or ggAVAX to earn rewards via GoGoPool or Benqi.\n\nCollateralized AVAX tokens can be deposited into lending protocols like Benqi.", "hidden": true, "question": "Describe the innovative ideas, technologies, or approaches your project brings to the Avalanche Teleporter ecosystem and their potential impact:", "questionId": 5}, {"type": "paragraph", "answer": "Most of the Inverter team members began their Web3 journey with high-level systems engineering and token design agencies like BlockScience, Curve Labs and Token Engineering Commons, which are responsible for the R&D behind many innovations in token and system engineering, including Filecoin\u2019s issuance curve, Balancer LBP mechanisms, and some of the earliest AMM curve research and implementations.\nBased on the pain points that we have observed in our experience with doing mechanism design on blockchain, The Inverter team has begun as an RnD coalition dedicated to developing a modular infrastructure capable of supporting a wide range of dynamic token economy designs with unique features and capabilities. On top of the team members and their expertise, Inverter also onboarded most of the top level token engineers and token engineering agencies to its orbit due to the new technical capabilities that its protocol infrastructure enables for token economies. \n\nIn short, PIMs enable projects to perpetually capture value from their token economies by facilitating dynamic token issuance with programmable distribution. In the initial version of PIM, bonding curves are utilized as the main dynamic issuance mechanism.\n\nKey Features of Primary Issuance Markets (PIM):\n\nDynamic Token Issuance and Pricing: PIMs utilize algorithmic pricing for minting and redeeming tokens, which includes a reserve ratio and trading fees. This setup allows projects to dynamically adjust token supply based on market conditions and project needs.\n\nMarket Value Capture: PIM allows projects to profit from their tokens' trading volumes and volatility, capturing value from the token activity that previously only benefited external parties like third-party market makers and exchanges.\n\nSustained Treasury Growth and Stability: Proceeds from token issuance contribute to increasing project reserves, establishing a price floor, growing the treasury, and supporting long-term development without dumping on the community.\n\nArbitrage Opportunities: Protocol-owned arbitrage agents ensure price stability and generate additional revenue when secondary market prices diverge from PIM-set prices.\n\nPrimary Issuance Market Stack (PIM Stack)\nInverter\u2019s Primary Issuance Market (PIM) stack is designed to enable projects to seamlessly configure and operate the full life cycle of token economies. PIM stack enables builders to customize token issuance, utilities, and circulation for custom use cases.\n\nKey Features of Inverter\u2019s PIM Stack:\n\nPlug & Play DeFi Functionalities: Inverter offers reusable, upgradable, and interoperable DeFi integrations, allowing subnets to design token economies without needing contract development.\n\nAlgorithm Library: Custom algorithms, such as dynamic pricing, condition the issuance logic of tokens through issuance curves, optimizing the token economy.\n\nAgent Library: Projects can activate verifiable arbitrage agents to market-make for their PIMs, optimizing issuance parameters based on real-time data, credit scoring, and additional services.\n\n", "hidden": true, "question": "For projects focusing on technical innovation, please demonstrate your team's technical expertise and ability to implement the project successfully within the proposed timeline and budget:", "questionId": 6}, {"type": "paragraph", "answer": "Technical Roadmap & Budget\nFor the scope of this grant, our goal is to drive the adoption of the Teleporter by leveraging it to introduce dynamic and oracle-signaled token issuance for subnets.\n\nPhase 1: Dynamic Issuance\nWe aim to introduce dynamic issuance to subnets by allowing users to send their AVAX from the C-Chain directly to a bonding curve on the subnet via Teleporter, natively issuing the subnet tokens.\n\nUser Journey Example\n\nGainz Gaming sets up its own subnet, powered by its native token, $GAIN. Despite having AVAX on the C-Chain, users lack the gas tokens of this new subnet.\n\nTo participate, a user sends their AVAX from the C-Chain directly to the bonding curve on the Gainz subnet via the Teleporter, bypassing the need for a swap on the C-Chain.\n\nThe user receives the $GAIN tokens natively on the subnet, and the AVAX is stored as collateral in the bonding curve, contributing to the subnet\u2019s liquidity. This process simplifies user participation in new subnets with low initial liquidity, allowing subnets to leverage AVAX liquidity on the C-Chain.\n\nMilestone 1 - Define the Architecture for Dynamic Issuance via Teleporter\nDefine the specifications of the bonding curve mechanism and how it integrates with the Teleporter.\n\nDefine the requirements for storing and minting native tokens using the Teleporter and PIM stack on both the C-Chain and Subnets.\n\nTime Estimation: 2 Weeks\n\nBudget: $50,000 (Direct)\n\nMilestone 2 - Development and Integration\nImplement native token minting to the PIM stack and the bonding curve to enable dynamic issuance in the subnet.\n\nEnable the Teleporter to bridge AVAX from the C-Chain to the subnet and vice versa.\n\nAVAX will be bridged as Wrapped AVAX (WAVAX) and used as the reserve token for the bonding curve.\nImplementing a correct interface between the Teleporter and Bonding Curve, enabling efficient token management and issuance.\n\nConduct unit tests for individual smart contracts to ensure they function correctly.\n\nWrite comprehensive unit tests and integration tests.\n\nPerform end-to-end testing to verify the process of token issuance.\n\nSimulate real-world scenarios to confirm the end-to-end process.\n\nTime Estimation: 4 Weeks\n\nBudget: -\n\nMilestone 3 - Audit the Dynamic Issuance\nEngage a reputable third-party auditor to review the smart contracts.\n\nEnsure the contracts are secure, efficient, and free from vulnerabilities.\n\nReview the audit report and address any identified issues or vulnerabilities.\n\nMake necessary improvements and optimizations based on the audit feedback.\n\nDeliver completed security audit report.\n\nTime Estimation: 2 Weeks\n\nBudget: Audit Costs (Retro)\n\nWe will cover the audit costs and send the invoice.\nMilestone 4 - Deployment\nDeploy the smart contracts on a private network for initial testing and validation.\n\nPrepare and finalize deployment scripts and get the contracts ready for deployment on the testnet and mainnet once ACP-77 goes live.\nConduct thorough testing to validate the deployment and ensure proper functionality.\n\nTime Estimation: 2 Weeks\n\nBudget: $55,000 (Retro)\n\nPhase 2: Oracle-signaled Issuance\nOur goal is to integrate oracle-signaled issuance logic for subnet tokens, linking token issuance logic to on-chain and off-chain data. This ensures that issuance is based on publicly verifiable performance metrics, determined by the utilizing protocol, thus reflecting the protocol's success.\n\nUser Journey example\n\nFor example, a messaging protocol could issue additional rewards to its stakers if the average monthly message count surpasses a certain threshold. Similarly, a gaming application could distribute tokens to players based on the experience points they accumulated in the game.\n\nThis approach aligns the incentives of ecosystem participants with the protocol\u2019s objective.\n\nMilestone 1 - Define the Architecture and Requirements\nIdentify the specific performance metrics that will adjust token issuance parameters in the PIM stack.\n\nDetermine the source of on-chain and off-chain data needed for the oracle implementation.\n\nDesign the overall architecture for oracle-signaled issuance, detailing how oracles interact with the PIM stack and issuance logic.\n\nSpecify the data flow from the oracles to the smart contracts responsible for token issuance.\n\nTime Estimation: 2 Weeks\n\nBudget: $25,000 (Retro)\n\nMilestone 2 - Development and Integration\nIntegrate with leading oracle providers (Chainlink or any other solution) to fetch on-chain and off-chain data.\n\nDevelop smart contracts to handle data input from oracles and trigger adjusting token issuance based on predefined metrics.\n\nImplement smart contracts to process oracle data and adjust token issuance.\n\nConduct unit tests for individual smart contracts to ensure correct functionality.\n\nTest various scenarios to validate the accuracy and reliability of data handling and token issuance.\n\nPerform integration testing to check the interaction between oracles and the token issuance logic.\n\nSimulate real-world scenarios to confirm the end-to-end process.\n\nTime Estimation: 4 Weeks\n\nBudget: -\n\nMilestone 3 - Audit the Oracle-Signaled Issuance\nEngage a reputable third-party auditor to review the smart contracts.\n\nEnsure the contracts are secure, efficient, and free from vulnerabilities.\n\nReview the audit report and address any identified issues or vulnerabilities.\n\nMake necessary improvements and optimizations based on the audit feedback.\n\nDeliver completed security audit report.\n\nTime Estimation: 2 Weeks\n\nBudget: Audit Costs (Retro)\n\nWe will cover the audit costs and send the invoice.\nMilestone 4 - Deployment\nDeploy the audited smart contracts to a testnet environment.\n\nConduct thorough testing to validate the deployment and ensure proper functionality.\n\nTime Estimation: 2 Weeks\n\nBudget: $85,000 (Retro)\n\n", "hidden": true, "question": "Provide a detailed breakdown of your project's budget and clearly explain how the requested funds will be allocated:", "questionId": 7}, {"type": "paragraph", "answer": "Technical Roadmap & Budget\nFor the scope of this grant, our goal is to drive the adoption of the Teleporter by leveraging it to introduce dynamic and oracle-signaled token issuance for subnets.\n\nPhase 1: Dynamic Issuance\nWe aim to introduce dynamic issuance to subnets by allowing users to send their AVAX from the C-Chain directly to a bonding curve on the subnet via Teleporter, natively issuing the subnet tokens.\n\nUser Journey Example\n\nGainz Gaming sets up its own subnet, powered by its native token, $GAIN. Despite having AVAX on the C-Chain, users lack the gas tokens of this new subnet.\n\nTo participate, a user sends their AVAX from the C-Chain directly to the bonding curve on the Gainz subnet via the Teleporter, bypassing the need for a swap on the C-Chain.\n\nThe user receives the $GAIN tokens natively on the subnet, and the AVAX is stored as collateral in the bonding curve, contributing to the subnet\u2019s liquidity. This process simplifies user participation in new subnets with low initial liquidity, allowing subnets to leverage AVAX liquidity on the C-Chain.\n\nMilestone 1 - Define the Architecture for Dynamic Issuance via Teleporter\nDefine the specifications of the bonding curve mechanism and how it integrates with the Teleporter.\n\nDefine the requirements for storing and minting native tokens using the Teleporter and PIM stack on both the C-Chain and Subnets.\n\nTime Estimation: 2 Weeks\n\nBudget: $50,000 (Direct)\n\nMilestone 2 - Development and Integration\nImplement native token minting to the PIM stack and the bonding curve to enable dynamic issuance in the subnet.\n\nEnable the Teleporter to bridge AVAX from the C-Chain to the subnet and vice versa.\n\nAVAX will be bridged as Wrapped AVAX (WAVAX) and used as the reserve token for the bonding curve.\nImplementing a correct interface between the Teleporter and Bonding Curve, enabling efficient token management and issuance.\n\nConduct unit tests for individual smart contracts to ensure they function correctly.\n\nWrite comprehensive unit tests and integration tests.\n\nPerform end-to-end testing to verify the process of token issuance.\n\nSimulate real-world scenarios to confirm the end-to-end process.\n\nTime Estimation: 4 Weeks\n\nBudget: -\n\nMilestone 3 - Audit the Dynamic Issuance\nEngage a reputable third-party auditor to review the smart contracts.\n\nEnsure the contracts are secure, efficient, and free from vulnerabilities.\n\nReview the audit report and address any identified issues or vulnerabilities.\n\nMake necessary improvements and optimizations based on the audit feedback.\n\nDeliver completed security audit report.\n\nTime Estimation: 2 Weeks\n\nBudget: Audit Costs (Retro)\n\nWe will cover the audit costs and send the invoice.\nMilestone 4 - Deployment\nDeploy the smart contracts on a private network for initial testing and validation.\n\nPrepare and finalize deployment scripts and get the contracts ready for deployment on the testnet and mainnet once ACP-77 goes live.\nConduct thorough testing to validate the deployment and ensure proper functionality.\n\nTime Estimation: 2 Weeks\n\nBudget: $55,000 (Retro)\n\nPhase 2: Oracle-signaled Issuance\nOur goal is to integrate oracle-signaled issuance logic for subnet tokens, linking token issuance logic to on-chain and off-chain data. This ensures that issuance is based on publicly verifiable performance metrics, determined by the utilizing protocol, thus reflecting the protocol's success.\n\nUser Journey example\n\nFor example, a messaging protocol could issue additional rewards to its stakers if the average monthly message count surpasses a certain threshold. Similarly, a gaming application could distribute tokens to players based on the experience points they accumulated in the game.\n\nThis approach aligns the incentives of ecosystem participants with the protocol\u2019s objective.\n\nMilestone 1 - Define the Architecture and Requirements\nIdentify the specific performance metrics that will adjust token issuance parameters in the PIM stack.\n\nDetermine the source of on-chain and off-chain data needed for the oracle implementation.\n\nDesign the overall architecture for oracle-signaled issuance, detailing how oracles interact with the PIM stack and issuance logic.\n\nSpecify the data flow from the oracles to the smart contracts responsible for token issuance.\n\nTime Estimation: 2 Weeks\n\nBudget: $25,000 (Retro)\n\nMilestone 2 - Development and Integration\nIntegrate with leading oracle providers (Chainlink or any other solution) to fetch on-chain and off-chain data.\n\nDevelop smart contracts to handle data input from oracles and trigger adjusting token issuance based on predefined metrics.\n\nImplement smart contracts to process oracle data and adjust token issuance.\n\nConduct unit tests for individual smart contracts to ensure correct functionality.\n\nTest various scenarios to validate the accuracy and reliability of data handling and token issuance.\n\nPerform integration testing to check the interaction between oracles and the token issuance logic.\n\nSimulate real-world scenarios to confirm the end-to-end process.\n\nTime Estimation: 4 Weeks\n\nBudget: -\n\nMilestone 3 - Audit the Oracle-Signaled Issuance\nEngage a reputable third-party auditor to review the smart contracts.\n\nEnsure the contracts are secure, efficient, and free from vulnerabilities.\n\nReview the audit report and address any identified issues or vulnerabilities.\n\nMake necessary improvements and optimizations based on the audit feedback.\n\nDeliver completed security audit report.\n\nTime Estimation: 2 Weeks\n\nBudget: Audit Costs (Retro)\n\nWe will cover the audit costs and send the invoice.\nMilestone 4 - Deployment\nDeploy the audited smart contracts to a testnet environment.\n\nConduct thorough testing to validate the deployment and ensure proper functionality.\n\nTime Estimation: 2 Weeks\n\nBudget: $85,000 (Retro)\n\n", "hidden": true, "question": "Outline your project's timeline, including specific milestones and deliverables:", "questionId": 8}, {"type": "short-answer", "answer": "We plan to post monthly updates on the relevant forum channels and provide additional updates upon the completion of each milestone. We\u2019re also open to scheduling syncs with the grant committee or any other representative from Avalanche if requested.", "hidden": true, "question": "How do you plan to provide regular progress updates and maintain open communication with the Avalanche community throughout the grant period?", "questionId": 9}, {"type": "paragraph", "hidden": true, "question": "Would you like to share anything else about your project, previous work, or other affiliations that may help determine project eligibility?", "questionId": 10}], "project": {"id": "0xa4147c4c20f68883e2f88cc43d86b1333fe8dd1b3adff0722f3c833f36d641fc", "title": "Inverter Network", "logoImg": "bafkreif44uq2m2ggkzg4v4ntbtiepapiv6gmxcnu6u5tdgv3ysil5hjxxy", "metaPtr": {"pointer": "bafkreidw4acjjigbaawdy3nwuwntmrwizfhqoxkezto7go6yda5ef2droq", "protocol": "undefined"}, "website": "https://www.inverter.network/", "bannerImg": "bafkreidzcwdbpig7qlimljff5dxypoycugjxlewlq5xwe7z3r3gd5ltzha", "createdAt": 1722345747740, "credentials": {"twitter": {"type": ["VerifiableCredential"], "proof": {"jws": "eyJhbGciOiJFZERTQSIsImNyaXQiOlsiYjY0Il0sImI2NCI6ZmFsc2V9..CpJ5UaBGb3uNMKuaqP6iAIKp_NTaIaC7kAZ_hp14XKZfZO_36xKD4eZhxo7hLe02jo-Dz-yfa73hih7H9fOUBA", "type": "Ed25519Signature2018", "created": "2024-07-30T12:27:36.035Z", "proofPurpose": "assertionMethod", "verificationMethod": "did:key:z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC#z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC"}, "issuer": "did:key:z6MkghvGHLobLEdj1bgRLhS4LPGJAvbMA1tn2zcRyqmYU5LC", "@context": ["https://www.w3.org/2018/credentials/v1"], "issuanceDate": "2024-07-30T12:27:36.035Z", "expirationDate": "2024-10-28T12:27:36.035Z", "credentialSubject": {"id": "did:pkh:eip155:1:0x5E3A2D9ef0878794b6d9bC2e777f0Fe018bc4A75", "hash": "v0.0.0:nTcfRPAXtjTHsJPvna+e+0ssDjglM+n3WkuG0NIoY04=", "@context": [{"hash": "https://schema.org/Text", "provider": "https://schema.org/Text"}], "provider": "ClearTextTwitter#inverternetwork"}}}, "description": "To see the original document\n\nhttps://docs.google.com/document/d/1KhepoFAtzXKSVpEIQDs97V-NnkWcN4sKgFjdgvNlDwk/edit?usp=sharing\n\n---\n\n# **Overview of Inverter Network**\n\nEstablished in 2023 in Switzerland, Inverter began as a research project to design a modular protocol infrastructure for programming token economies. In early 2024, Inverter introduced the Primary Issuance Markets (PIM) stack. \n\nIn short, **PIMs enable projects to perpetually capture value from their token economies by facilitating dynamic token issuance with programmable distribution.** In the initial version of PIM, bonding curves are utilized as the main dynamic issuance mechanism.\n\n*Key Features of Primary Issuance Markets (PIM):*\n- **Dynamic Token Issuance and Pricing:** PIMs utilize algorithmic pricing for minting and redeeming tokens, which includes a reserve ratio and trading fees. This setup allows projects to dynamically adjust token supply based on market conditions and project needs. \n- **Market Value Capture:** PIM allows projects to profit from their tokens' trading volumes and volatility, capturing value from the token activity that previously only benefited external parties like third-party market makers and exchanges.\n- **Sustained Treasury Growth and Stability:** Proceeds from token issuance contribute to increasing project reserves, establishing a price floor, growing the treasury, and supporting long-term development without dumping on the community.\n- **Arbitrage Opportunities:** Protocol-owned arbitrage agents ensure price stability and generate additional revenue when secondary market prices diverge from PIM-set prices.\n\n\n## Primary Issuance Market Stack (PIM Stack) \n\nInverter\u2019s Primary Issuance Market (PIM) stack is designed to enable projects to seamlessly configure and operate the full life cycle of token economies. PIM stack enables builders to customize token issuance, utilities, and circulation for custom use cases. \n\n*Key Features of Inverter\u2019s PIM Stack:*\n- **Plug & Play DeFi Functionalities:** Inverter offers reusable, upgradable, and interoperable DeFi integrations, allowing subnets to design token economies without needing contract development.\n- **Algorithm Library:** Custom algorithms, such as dynamic pricing, condition the issuance logic of tokens through issuance curves, optimizing the token economy.\n- **Agent Library:** Projects can activate verifiable arbitrage agents to market-make for their PIMs, optimizing issuance parameters based on real-time data, credit scoring, and additional services.\n\n---\n\n# Our Value Proposition \n\nBy leveraging PIM, Inverter focuses on various dynamic token issuance models for subnets and introduces the following benefits to the Avalanche Teleporter Ecosystem:\n\n**Dynamic Issuance via Bonding Curves:** \n*When a project without an existing token on the C-Chain sets up a Subnet for the first time, users cannot obtain gas tokens due to a lack of liquidity. As a result, the funds available on the C-Chain cannot be utilized effectively. This creates difficulties during the initial onboarding phase, hindering the smooth establishment of the new Subnet.*\nPIM allows users to send their AVAX from the C-Chain directly to a bonding curve on the Subnet via Teleporter. This mechanism dynamically issues the Subnet tokens in response to the amount of AVAX sent, effectively addressing liquidity issues. \n > PIMs leverage bonding curves to create a market for any token by offering algorithmic bids and asks at each level of token supply without needing any liquidity provider or bootstrapping. This ensures that the token is tradeable from the moment of origination, making it an ideal solution for launching tokens without fundraising.\nBy facilitating the direct transfer and real-time issuance of tokens, Inverter ensures that users have immediate access to the necessary gas tokens, thereby smoothing the onboarding process and the setup of a new Subnet.\n\n**Dynamic Issuance via Oracles:**\n*While major L1 projects have performance-based issuance models, such as rewarding validators through successful block production, their static nature limits current issuance models. They need dynamic incentives to meet specific objectives. This inflexibility results in static token economies that fail to reflect real-time performance metrics, leading to suboptimal alignment within the economic actors in the ecosystem.*\n\nOur solution integrates oracle-signaled issuance for subnet tokens, linking the issuance logic to on-chain and off-chain verifiable data. We create performance-aligned token economies by dynamically adjusting issuance according to set KPIs. This ensures that incentives are closely tied to real-time performance metrics, fostering a more engaging ecosystem where stakeholders\u2019 behaviors are tied to economic incentives. \n\n## Future Steps\n\n**Treasury Management for Subnets**\n*There is a lack of low-risk treasury management options for AVAX tokens that are bridged to subnets. This limits subnets' ability to utilize their bridged AVAX tokens efficiently and securely.*\n\nCreating a Collateral Vault mechanism using the Teleporter allows subnets to efficiently use their reserves on the C-Chain. AVAX in this Collateral Vault can be used for liquid staking, providing low-risk options, and for other DeFi protocols, such as lending, if higher risk is desired.\n - Collateralized AVAX tokens can be converted into sAVAX or ggAVAX to earn rewards via GoGoPool or Benqi.\n - Collateralized AVAX tokens can be deposited into lending protocols like Benqi.\n\n---\n\n# Technical Roadmap & Budget \nFor the scope of this grant, our goal is to drive the adoption of the Teleporter by leveraging it to introduce dynamic and oracle-signaled token issuance for subnets.\n\n# Phase 1: Dynamic Issuance\nWe aim to introduce dynamic issuance to subnets by allowing users to send their AVAX from the C-Chain directly to a bonding curve on the subnet via Teleporter, natively issuing the subnet tokens. \n\n*User Journey Example*\n- Gainz Gaming sets up its own subnet, powered by its native token, $GAIN. Despite having AVAX on the C-Chain, users lack the gas tokens of this new subnet. \n- To participate, a user sends their AVAX from the C-Chain directly to the bonding curve on the Gainz subnet via the Teleporter, bypassing the need for a swap on the C-Chain. \n- The user receives the $GAIN tokens natively on the subnet, and the AVAX is stored as collateral in the bonding curve, contributing to the subnet\u2019s liquidity. This process simplifies user participation in new subnets with low initial liquidity, allowing subnets to leverage AVAX liquidity on the C-Chain.\n\n## Milestone 1 - Define the Architecture for Dynamic Issuance via Teleporter\n\n- Define the specifications of the bonding curve mechanism and how it integrates with the Teleporter.\n- Define the requirements for storing and minting native tokens using the Teleporter and PIM stack on both the C-Chain and Subnets.\n  - *Time Estimation: 2 Weeks*\n  - *Budget: $50,000 (Direct)*\n\n## Milestone 2 - Development and Integration \n\n- Implement native token minting to the PIM stack and the bonding curve to enable dynamic issuance in the subnet.\n- Enable the Teleporter to bridge AVAX from the C-Chain to the subnet and vice versa.\n  - *AVAX will be bridged as Wrapped AVAX (WAVAX) and used as the reserve token for the bonding curve.*\n- Implementing a correct interface between the Teleporter and Bonding Curve, enabling efficient token management and issuance.\n- Conduct unit tests for individual smart contracts to ensure they function correctly.\n- Write comprehensive unit tests and integration tests.\n- Perform end-to-end testing to verify the process of token issuance.\n- Simulate real-world scenarios to confirm the end-to-end process.\n  - *Time Estimation: 4 Weeks*\n  - *Budget: -*\n\n## Milestone 3 - Audit the Dynamic Issuance\n\n- Engage a reputable third-party auditor to review the smart contracts.\n- Ensure the contracts are secure, efficient, and free from vulnerabilities.\n- Review the audit report and address any identified issues or vulnerabilities.\n- Make necessary improvements and optimizations based on the audit feedback.\n- Deliver completed security audit report.\n  - *Time Estimation: 2 Weeks*\n  - *Budget: Audit Costs (Retro)*\n    - *We will cover the audit costs and send the invoice.*\n\n\n## Milestone 4 - Deployment \n\n- Deploy the smart contracts on a private network for initial testing and validation.\n  - *Prepare and finalize deployment scripts and get the contracts ready for deployment on the testnet and mainnet once ACP-77 goes live.*\n- Conduct thorough testing to validate the deployment and ensure proper functionality.\n  - *Time Estimation: 2 Weeks*\n  - *Budget: $55,000 (Retro)*\n\n---\n\n# Phase 2: Oracle-signaled Issuance\n\nOur goal is to integrate oracle-signaled issuance logic for subnet tokens, linking token issuance logic to on-chain and off-chain data. This ensures that issuance is based on publicly verifiable performance metrics, determined by the utilizing protocol, thus reflecting the protocol's success.\n\n*User Journey example*\n- For example, a messaging protocol could issue additional rewards to its stakers if the average monthly message count surpasses a certain threshold. Similarly, a gaming application could distribute tokens to players based on the experience points they accumulated in the game. \n- This approach aligns the incentives of ecosystem participants with the protocol\u2019s objective.\n\n## Milestone 1 - Define the Architecture and Requirements\n\n- Identify the specific performance metrics that will adjust token issuance parameters in the PIM stack.\n- Determine the source of on-chain and off-chain data needed for the oracle implementation.\n- Design the overall architecture for oracle-signaled issuance, detailing how oracles interact with the PIM stack and issuance logic.\n- Specify the data flow from the oracles to the smart contracts responsible for token issuance.\n  - *Time Estimation: 2 Weeks*\n  - *Budget: $25,000 (Retro)*\n\n\n## Milestone 2 - Development and Integration\n\n- Integrate with leading oracle providers (Chainlink or any other solution) to fetch on-chain and off-chain data.\n- Develop smart contracts to handle data input from oracles and trigger adjusting token issuance based on predefined metrics.\n- Implement smart contracts to process oracle data and adjust token issuance.\n- Conduct unit tests for individual smart contracts to ensure correct functionality.\n- Test various scenarios to validate the accuracy and reliability of data handling and token issuance.\n- Perform integration testing to check the interaction between oracles and the token issuance logic.\n- Simulate real-world scenarios to confirm the end-to-end process.\n  - *Time Estimation: 4 Weeks*\n  - *Budget: -*\n\n## Milestone 3 - Audit the Oracle-Signaled Issuance\n\n- Engage a reputable third-party auditor to review the smart contracts.\n- Ensure the contracts are secure, efficient, and free from vulnerabilities.\n- Review the audit report and address any identified issues or vulnerabilities.\n- Make necessary improvements and optimizations based on the audit feedback.\n- Deliver completed security audit report.\n  - *Time Estimation: 2 Weeks*\n  - *Budget: Audit Costs (Retro)*\n    - *We will cover the audit costs and send the invoice.*\n\n\n## Milestone 4 - Deployment\n\n- Deploy the audited smart contracts to a testnet environment.\n- Conduct thorough testing to validate the deployment and ensure proper functionality.\n  - *Time Estimation: 2 Weeks*\n  - *Budget: $85,000 (Retro)*\n\n---\n\n# Summary\n- Phase 1:  Dynamic Token Issuance for Subnets\n    - Timeline: 10 Weeks\n    - Budget: $105,000 + Audit Cost\n- Phase 2: Oracle-signaled Issuance\n    - Timeline: 10 Weeks\n    - Budget: $110,000 + Audit Cost\n**TOTAL:** \n- **20 Weeks**\n- **$215,000 + Audit Costs**\n\n\n\n\n\n\n", "lastUpdated": 0, "projectGithub": "InverterNetwork", "projectTwitter": "inverternetwork"}, "recipient": "0xF4aA767929Cd98782a1a08e7a9F60Eb5ea093a96"}}