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DeFi (for Free Software)
Here at GOSH we have spent the last couple of weeks preparing for the launch of the GOSH Exchange, or GEX. You may remember us mentioning GEX; a key part of the GOSH ecosystem and tokenomics. We can now gladly announce that GEX will be live over the coming month.
I: It Was a Cold and Rainy Night
GEX is part of a wider set of Decentralized Finance (DeFi) tools and services offered on GOSH. Indeed, DeFi is today one of the most impactful uses of blockchain technology. The very principle behind a decentralized and distributed ledger is to ensure that whatever is being transacted or stored in a user’s wallet belongs only to them. It was only a matter of time before this technology began taking the financial world by storm.
And DeFi and GOSH are, in fact, a natural match. Any product dealing with this most sensitive of materials needs to be sure they have no holes in their Software Supply Chain. GOSH guarantees the security of your code right from the source. This answers a question that many Web3 protocols, startups, and users still ask: why rely on centralized services at any stage of software delivery?
And the same can be said for financial services themselves. Over the last few years there has been a boom in exchanges that trade exclusively crypto assets. The catch? They use a centralized order book.
These exchanges benefited enormously from the current limitations in computing power, transaction speed, and scalability found in major blockchains. There were many positives to these services. They allowed enthusiasts to replace the use of fiat with crypto in many exciting ways. And they are one of the main drivers of the ever growing adoption of blockchain.
But progress marches on. Defiant and bold.
And so it is that blockchain today allows for fully decentralized order book exchanges. They are permissionless, secure, and work on-chain. GEX is precisely one such exchange.
II: After Years of Innovation
When the idea of a decentralized exchange was suggested by Vitalik Buterin in 2016, it was in the form of a liquidity swap. The general idea wasn’t wholly new. There had been attempts at creating order books on-chain, none of which were successful. Vitalik Buterin’s proposal (which later grew into UniSwap), though still a vital innovation, was limited in scope.
It took a while to fulfill all of the computational prerequisites of fully decentralized order books, which was a difficult and dynamic process. Even the most advanced blockchain protocols of just three short years ago were quite a way off. But as new blockchains emerged (cheaper, faster, more scalable ones) it became a question of ‘when’ not ‘if.’ Today, there are only two working examples of fully decentralized order book exchanges. Solana’s Serum Exchange and Everscale’s Flash Exchange, or FLEX.
The core technology GOSH is built on is the result of a development process that took years. That generational carry over is a large part of why GOSH is today among the fastest and most scalable blockchains in production. This is the magic of open source innovation. And if our bread and butter is security, it means DeFi services don’t need to compromise a thing in choosing the decentralized option we are all so keen on.
GEX is a shining example of this carry over. As a decentralized limit order book exchange, it works on top of the same order book as Everscale’s FLEX. But we do not see GEX as just another place to trade the same old coins. Our aim from the very beginning is to use GEX as a central tool to allow developers to extract the immense value locked in their code.
III: On Lutte
GOSH solves the problem of the OSS value chain. In the GOSH Tokenomics we outline how open source repositories on GOSH can issue DAO tokens to be traded on GEX. In fact, in the beginning, the only tokens traded on GEX will be open source repository tokens.
This may seem like a simple solution, but simplicity is the ultimate sophistication. Open source developers have long struggled with the following conundrum: how do we keep the flame of open collaboration burning while protecting ourselves from corporate exploitation of our work? It is true that major tech-firms often build key parts of their service explicitly from open source code, and that the developers of that code almost never receive any credit or financial recompense. Open source projects can build a business from their repositories, and to that we yell out “hip-hip-hooray.” Though a problem still exists: it doesn’t necessarily fairly benefit all of the contributors to the code, often even very active ones.
Enter GEX. Using the proven blockchain monetization principle, it offers businesses built on GOSH, as well as unadorned repositories, a way to extract value and participate in the economy they sustain. Seeing as all repositories on GOSH are managed as a DAO, the intrinsic value of these DAO tokens originates in their use supporting the development process itself. Add investors to the mix, and the blockchain community has a decentralized space where they will be able to financially support the wide breadth of open source innovation found in the GOSH ecosystem. On top of that, one of the achievements we hope will come out of an exchange distinct from the rest of the crypto market is a less volatile token value trajectory.
IV: Killer Whales and the Liquid Engine
The question that must be asked with any grassroots project is: how do you get support off the ground? In the case of GEX this can be translated as: how, initially, will liquidity be provided? The answer to that is: through the Killer Whale Pod Cast, or simply KWPC.
A live show tailored to crypto investors – KWPC is the perfect platform for GOSH ecosystem projects to present themselves. KWPC is a key member of the GOSH ecosystem, and participated significantly in the initial development of the GOSH blockchain.
Launched one year ago, the first KWPC show was an airdrop where Killer Whale Tokens (KWT) were distributed to viewers. KWTs were locked in user wallets for up to a year. When unlocked, KWTs were specifically to be used to provide liquidity. Over this last year, GOSH was launched.
Now that the last of the KWTs are about to be unlocked, and with GEX going live, it’s a no-brainer to have KWT holders be the ‘Liquid Engine’ of this resonant machine.
So here’s how this engine will run:
KWT holders will stake their tokens and receive Killer Whale Liquidity tokens (KWL) in an amount proportional to the length of their stake
Projects in the GOSH ecosystem will be presented to investors on KWPC shows
Investors will then use their KWL tokens to vote in real time during KWPC live shows on the price of the Project Token pairs
The voting mechanism used will be Soft Cooperative Voting, or SCV. SCV allows investors to vote using their tokens, but these are allocated from the total number of tokens. That’s why this vote is called Cooperative; it reflects on all other voters
After this, provided a minimum investment threshold is met, the Project Tokens will be listed in AMM Liquidity Pools in pairs with KWL tokens on GEX
This framework allows for organic price discovery of repository tokens while also ensuring that tokens meet listing criteria, here defined as investor support
In return, KWL token holders will receive maker fees and a percentage of farmed project tokens.
Because we like books with pictures, here’s a visual layout of the engine:
When GOSH tokens will be issued, the model for liquidity providing described in the GOSH Tokenomics will also be added to GEX. We are speaking, of course, of lvGOSH tokens. These will be issued to GOSH blockchain validators in proportion to the length of their stake. These can be used to vote, using SCV, on providing liquidity on GEX and in turn, farm GEX tokens.
Likewise, in the future, KWPC plans to launch the Killer Whale Fund (KWF), a fully decentralized investment fund. This will play the same role as investment firms do, but tailored to helping young blockchain projects find funding, and allowing investors to reach decentralized decisions on fund management through SCV.
V: Let’s Not Jump To Conclusions
“Free software is a matter of liberty, not price. To understand the concept, you should think of 'free' as in 'free speech,' not as in 'free beer'”
We regard these words of the great Richard Stallman very highly. Written back when the internet was still young, we do not see them as nostalgic. Unfortunately, ‘free’ and ‘software,’ when put together, are still trailed by an invisible question mark.
The very reasons this is important are the innovations contained within, and found and polished from, its being. One such innovation is the blockchain. And, in turn, blockchain services like decentralized order book exchanges. What open source developers have today is an open source technology of monetization. The next step is to leverage this. That’s exactly what GEX does.
If what we call progress (be it fire, or the checks and balances of a democratic constitution) is sometimes bound to its abuses, it sometimes too can mitigate them. Stallman himself wrote, in the GNU Manifesto, “people will program for reasons other than riches; but if given a chance to make a lot of money as well, they will come to expect and demand it.”
GEX is built with the idea that this proposition can extend to OSS developers.
The beginning of any project is an exciting time. Endless potential and a horizon of awe. In reality, of course, nobody can know its fate. But we believe, and are centering our work around the idea, that the growing value of free software will eventually be extracted by its very developers. This text was a brief rundown of how we hope to make that happen.
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