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PCV
path to sustainability
What is PCV?
Protocol Controlled Value (PCV) is a sub-category of Total Value Locked (TVL) that is owned by the protocol and not withdraw-able by users. A common example of PCV is DAO treasury.
How Does PCV Benefit Oolong?
At the basic level, PCV enables a protocol to be "thick", and create better value capturing for its token as the protocol grows, similar to traditional companies having a sizable cash reserve.
Oolong being a DEX, is especially well-positioned to own its own liquidity through PCV. This fundamentally transforms the business model of Oolong as a DEX. While existing DEXs need to borrow liquidity from LPs high-interest rates, Oolong can grow to own liquidity on its own DEX as time progresses. This is especially useful for the protocol's own token, OLO. By owning a majority of our own token's liquidity instead of renting from LPs, we can now:
- buyback OLO
- through farming and staking, “burn” the OLO from the circulating supply
- reduce the volatility of the liquidity pool
- reduce potential price manipulation
- increase token holder confidence knowing fully well the PCV is there to guarantee liquidity for Oolong.
And most importantly, the rate of OLO being farmed and staked by Oolong PCV will grow exponentially because Oolong PCV never sells! When it farms and stakes OLO, it takes the newly earned OLO to farm and stake again and earn more OLO…this is what we call the scheme of mega compounding OLO ;)
Furthermore, in the process of mega compounding OLO, the Oolong PCV will just grow stronger and thicker and eventually IMMORTAL. The goal is for Oolong PCV to become the biggest OLO holder who is also an absolute diamond hand 💎💎💎
The best thing of all these? They will all be done permissiolessly and frictionlessly on chain!
How Does Oolong Grow Its PCV?
Oolong can grow its PCV through many different sources, some examples are:
- A portion of the exchange swap fees
- Yielding strategies (e.g lending interest, farming yields)
- Asset value appreciation
The beauty of PCV is all of the above can be done trustlessly on-chain.
What Will Oolong Do With PCV?
In the long run, this would be for governance to decide. Initially, PCV will be focused on providing liquidity for Oolong Token and other major LP pairs.
Who Controls Oolong PCV?
Governance, aka Oolong token holders.
How To Check the PCV Status?
Find out more about the assets in PCV here: https://info.oolongswap.com/#/account/0x0193eac18e78c449117c3c5c05919e3989e6cd58
Last modified 4d ago