Introducing Metavault DAO

6 min readFeb 22, 2022

Metavault is a community-controlled investment platform and decentralised venture capital vehicle that allows anyone to invest in the latest and most profitable Blockchain, DeFi and metaverse projects and strategies. Metavault scours the crypto landscape for disruptive new projects or protocols and allocates treasury funds into the most promising instruments at an early stage to capture the best rewards. The rewards from these investments are paid out to investors, who can also benefit from the success of the platform by staking the MVD token associated with it and earning further rewards.

One of the core tenets of Metavault is the fact that the investment strategy is dictated by the Metavault DAO members, with the investment selection process, from voting which protocols to invest in to the rewards paid out as a result all made public. These DAO members also get to steer the direction of the project in general, voting on improvements to the protocol metrics and tokenomics.

So how do potential investments get identified in the first place? Metavault has a team of highly skilled specialists whose sole purpose is to scour the DeFi landscape and pick projects that have the potential to offer the best combination of risk versus reward, taking advantage of APYs which are typically high in the early days of a project. Not only does this team have a fundamental knowledge of the DeFi space, but they also have an in-depth knowledge of the technical aspects of smart contracts, meaning they can analyse a project’s code and work out how mechanisms can be used and optimised for the benefit of Metavault users. The proposals are put forward to the DAO, which votes on which ones allocate funds to.

If this team finds a project that has a high potential of return but comes at a cost (protocol or platform fees), the Metavault team has the technical skills to bring the project’s open source code in-house and refine it so that these costs are minimised or even eliminated altogether.

Game Theory Modelling

Metavault incorporates the same Game Theory model utilised by other such protocols but improves on their shortcomings and incorporates an important twist which we will cover later in this piece. The model essentially references the level of benefit to two parties involved in an exchange, which in our case is you (the user) and us (Metavault). The various instruments available on Metavault all come with different levels of potential gain, ranging from 1–6. These are referenced as 1,1; 3,3; 4,4; 6,6 etc.

The first number refers to the benefit to the user, while the second number refers to the benefit to Metavault. As a user you are naturally looking for the maximum potential benefit, but there are differing levels of risk associated with these various strategies, such as lock-up times and other conditions.

Staking

MVD tokens are intended to be a store of value rather than a mere stablecoin, and as such it is our intention to maintain and hopefully increase the value of the MVD token relative to the principal investment. Staking is the primary method by which the MVD token will accrue value over time.

3,3 Staking

Staking MVD tokens is straightforward — you either buy MVD on the market or bond your liquidity (see ‘bonding’ below) in exchange for MVD tokens. Then you use the Metavault platform to stake your MVD in return for rewards in the form of more MVD, which the treasury derives from bonding sales.

Staking auto-compounds your MVD with sMVD (staked MVD) at a 1:1 ratio. After this your sMVD balance will increase automatically with every rebase (every 8 hours) based on the current APY. The APY for staking MVD is directly proportional to the discrepancy between the market value of MVD and the treasury backing per token.

Staking your MVD tokens incurs a warm-up period of three rebases (about 24 hours). This is to stop someone buying MVD immediately before a rebase and selling immediately after. You can still unstake your tokens during this period but you will lose some rewards.

Staking your tokens theoretically benefits both Metavault and the user to a factor of 3 each.

6,6 Governance Staking+

This strategy is exclusive to Metavault and features the highest potential returns for both the project and the user. 6,6 Governance Staking is a special staking pool with stakers afforded DAO governance rights for the period of the lock-up, allowing them to have a say on such matters as what the Metavault VC fund should invest it, how much it should invest, MVD token burn rates and so on.

6,6 stakers will receive revenue from various sources including external yield farms, protocol partnerships, existing investments, and more. Any funds remaining after payouts will be split between buyback burns, marketing, and the Metavault treasury.

Staking your tokens 6,6 theoretically benefits both Metavault and the user to a factor of 6 each.

Bonds

Bonding is the process of selling tokens or LP shares to the Metavault protocol in return for MVD tokens. The benefit for the bonder is that entering into a bond offers the opportunity to acquire MVD tokens at a discount to market price, generating a yield for the duration of the bond.

The mechanics behind bonding and staking on the Metavault protocol also stem from Game Theory. In the case of Metavault, the different values (e.g., 1,1) refer to the different bonding and staking contracts available on the platform, all of which carry specific benefits and drawbacks which we have alluded to.

1,1 Bonds

1,1 Bonds are the basic bonding strategy you can take advantage of with Metavault. Users can buy MVD with DAI on Metavault itself in exchange for discounted MVD tokens. This benefits the bonder who can sell their tokens for an instant profit (or stake them for further gains), while it also benefits Metavault because it can build its reserves of stablecoins. This allows us to grow the project, help increase the value of the MVD token, and allows us to offer attractive APYs. 1,1 Bonds are held for seven days before maturity.

Bonding your tokens 1,1 theoretically benefits both Metavault and the user to a factor of 1 each.

4,4 Bonds

4,4 Bonds are very similar to 1,1 Bonds but have some crucial differences:

4,4 Bond rewards are paid in sMVD instead of MVD. This allows your bond rewards to be compounded as they are vested, removing the need to stake them after you claim them.
4,4 Bonds have fixed term vesting periods with various runtimes.
4,4 Bonds are scarcer than 1,1 Bonds because they are generally more profitable and as such Metavault needs to exercise control over them to avoid over dilution.
4,4 Bonds tend to have a smaller discount than 1,1 Bonds. This is due to the fact that 4,4 Bond buyers also benefit from the compounding rewards offered by their sMVD rewards. This means that while initial discounts are reduced, buying a 4,4 Bond can be more beneficial over the course of the vesting period.
Bonding your tokens 4,4 theoretically benefits both Metavault and the user to a factor of 4 each.

Metavault Minting Model

Metavault also features an improved minting model over existing protocols. Token minting models in such protocols commonly have a 1:1 ratio, i.e. for every bond sold, a token is minted and sent to the DAO treasury.

The Metavault token minting model features a 0 Emission model to the DAO Wallet, which means that no MVD token is minted and sent to the DAO. The advantage of this is that Metavault benefits from a much lower rate of inflation, helping the price accrue value.

Buyback and Burn

Metavault has two different buyback mechanisms in place to ensure we can held token price above backing price retain control over the levels of inflation:

When the price of the MVD token falls to the ‘backing price’ (the value of the treasury divided by the total token supply) the buyback smart contract will kick in and rebuy MVD tokens until this threshold is regained.
A portion of the platform’s earnings will be used to constantly buy back and burn MVD tokens in order to reduce the circulating supply. Portions of the platform earnings used for Buyback and burn are decided by the Governance.