Akita Network

Introduction

The AKITA network DAO is a project by the AKITA INU token community members. Our goal is to bring project governance to our community and empower our holders. We have now bridged Akita Inu Token (ERC-20) to Avalanche which is where we will launch our DAO and our governance protocol.

The AKITA INU token was launched on Feb 1, 2021 anonymously by its developers. Initially, the liquidity was locked in Uniswap and the contract keys have been burned. This token has been taken over by the community and is being led by several core team members and moderators.

The goal of the DAO is to establish itself as a decentralized cooperative that uses its liquidity and token model to structure and incentivize members for contribution.

Longer Term goals include registering the DAO as a legal entity and procuring our own network (AKITA network) via Avalanche subnets. This will allow us to build our own social media network upon our very own blockchain layer.

What is AKITA network DAO?

AKITA network DAO is a decentralized autonomous organization which has an established reserve currency protocol available on Avalanche. This established reserve currency protocol is based on the gAKITA token. Each gAKITA token is backed by AKITA-wAVAX LP tokens in the AKITA network DAO treasury, giving it an intrinsic value that it cannot fall below.

What is the point of AKITA network DAO?

Our goal is to build a policy-controlled currency system, native on the AVAX network, in which the behavior of the gAKITA token is controlled by the DAO. In the long term, we believe this system can be optimized for stability and consistency so that gAKITA can function as a global unit-ofaccount and medium-of-exchange currency. In the short term, we intend to optimize the system for growth and wealth creation. We intend to achieve price flatness for a representative basket of goods without the use of fiat currency, in order to allow the cryptocurrency industry to detach once and for all from the traditional finance world!

How do I participate in AKITA network DAO?

There are two main strategies for market participants: staking and minting. You can stake your gAKITA tokens in return for more gAKITA tokens, or you can mint by providing LP tokens or gAKITA tokens in exchange for discounted gAKITA tokens after a fixed vesting period.

How can I benefit from AKITA network DAO?

The main benefit for stakers comes from supply growth. The protocol mints new gAKITA tokens from the treasury, the majority of which are distributed to the stakers. Thus, the gain for stakers will come from their autocompounding balances, though price exposure remains an important consideration. That is, if the increase in token balance outpaces the potential drop in price (due to inflation), stakers would make a profit. The main benefit for minters comes from price consistency. Minters commit a capital upfront and are given a fixed return at a set point in time; that return is given in gAKITA tokens and thus the minter's profit would depend on gAKITA price when the minted gAKITA matures. Taking this into consideration, minters benefit from a rising or static price for the gAKITA token!

Why do we need AKITA network DAO in the first place?

Dollar-pegged stablecoins have become an essential part of crypto due to their lack of volatility as compared to tokens such as Bitcoin and Ether. Users are comfortable with transacting using stablecoins knowing that they hold the same amount of purchasing power today vs. tomorrow. But this is a fallacy. If we use the US government, for example, the dollar is controlled by the US government and the Federal Reserve. This means a depreciation of dollar also means a depreciation of these stablecoins. AKITA network DAO aims to solve this by creating an unbound stablecoin called gAKITA. By focusing on supply growth rather than price appreciation, AKITA network DAO hopes that gAKITA can function as a currency that is able to hold its purchasing power regardless of market volatility.

gAKITA is backed, not pegged.

Each gAKITA is backed by wAVAX-AKITA LP tokens, not pegged to it. Because the treasury backs every gAKITA with at least 1 LP token, the protocol would buy back and burn gAKITA when it trades below the value of 1 LP token. This has the effect of pushing gAKITA value back up to its backed value. gAKITA could always trade above the value of 1 LP token because there is no upper limit imposed by the protocol. Think pegged == 1, while backed >= 1. You might say that the gAKITA floor value or intrinsic value is 1 LP token. We believe that the actual value will always be 1 LP token+ premium, but in the end that is up to the market to decide.

What is (3,3) and (1,1) ?

(3,3) is the idea that, if everyone cooperated in AKITA network DAO, it would generate the greatest gain for everyone (from a game theory standpoint).

Currently, there are three actions a user can take:

• Staking (+2)

• Bonding (+1)

• Selling (-2)

Staking and bonding are considered beneficial to the protocol, while selling is considered detrimental. Staking and selling will also cause a price move, while bonding does not (we consider buying gAKITA from the market as a prerequisite of staking, thus causing a price move). If both actions are beneficial, the actor who moves price also gets half of the benefit (+1). If both actions are contradictory, the bad actor who moves price gets half of the benefit (+1), while the good actor who moves price gets half of the downside (-1). If both actions are detrimental, which implies both actors are selling, they both get half of the downside (-1).

Why is the market value of gAKITA so volatile?

It is extremely important to understand how early in development the AKITA network DAO protocol is. A large amount of discussion, i'm sure, will be centered around the current value and expected stable value moving forward. The reality is that these characteristics are not yet determined. The network is currently tuned for expansion of the gAKITA supply, which when paired with the staking, minting, and yield mechanics of AKITA network DAO, results in a fair amount of volatility. gAKITA could trade at a very high value because the market is ready to pay a hefty premium to capture a percentage of the current market capitalization. However, the price of gAKITA could also drop to a large degree if the market sentiment turns bearish. We would expect significant price volatility during our growth phase so please do your own research whether this project suits your goals.

What is the point of participating now when gAKITA trades at a premium?

When you buy and stake gAKITA, you capture a percentage of the supply (market cap) which will remain close to a constant. This is because your staked gAKITA balance also increases along with the circulating supply. The implication is that if you buy gAKITA when the market cap is low, you would be capturing a larger percentage of the market cap.

What is a rebase?

Rebase is a mechanism by which your staked gAKITA balance increases automatically. When new gAKITA are minted by the protocol, a large portion of it goes to the stakers. Because stakers only see staked gAKITA balance instead of gAKITA the protocol utilizes the rebase mechanism to increase the staked gAKITA balance so that 1 staked gAKITA (sgAKITA) is always redeemable for 1 gAKITA token.

What is reward yield?

Reward yield is the percentage by which your staked gAKITA balance increases on the next epoch. This is also known as rebase rate. You can find this number on the AKITA network DAO staking page.

What is APY?

APY stands for annual percentage yield. It measures the real rate of return on your principal by taking into account the effect of compounding interest. In the case of AKITA network DAO, your staked gAKITA represents your principal, and the compound interest is added periodically on every epoch (8 hours) thanks to the rebase mechanism. One interesting fact about APY is that your balance will grow not linearly but exponentially over time! Assuming a daily compound interest of 2%, if you start with a balance of 1 gAKITA on day 1, after a year, your balance will grow to about 1377 gAKITA tokens.

What is staking?

Staking is the primary value accrual strategy of AKITA network DAO. Stakers stake their gAKITA tokens on AKITA network DAO website to earn rebase rewards. The rebase rewards come from the proceeds of bond sales, and can vary based on the number of gAKITA staked in the protocol and the reward rate set by monetary policy.

Staking is a passive, long-term strategy. The increase in your stake of gAKITA translates into a constantly falling cost basis converging on zero. This means even if the market price of gAKITA drops below your initial purchase price, given a long enough staking period, the increase in your staked gAKITA balance should eventually outpace the fall in price.

When you stake, you lock gAKITA and receive an equal amount of sgAKITA. Your sgAKITA balance rebases up automatically at the end of every epoch. gsAKITA is transferable and therefore composable with other DeFi protocols.

When you unstake, you burn sgAKITA and receive an equal amount of gAKITA tokens. Unstaking means the user will forfeit the upcoming rebase reward. Note that the forfeited reward is only applicable to the unstaked amount; the remaining staked gAKITA (if any) will continue to receive rebase rewards.

What is minting?

Minting is the secondary value accrual strategy of AKITA network DAO. When users mint gAKITA tokens, they are actually selling their assets in order to buy a bond from the protocol. Minting Actions are a cross between a fixed income product, a futures contract, and an option. The protocol quotes the minter with terms for a trade at a future date. These terms include a predefined amount of gAKITA the minter will mint and the time when vesting is complete. The bond becomes redeemable as it vests. I.e. in a 5-day term, after 2 days into the term 40% of the rewards can be claimed.

Minting is an active, short-term strategy. The price discovery mechanism of the secondary bond market renders mints discounts more or less unpredictable. Therefore minting is considered a more active investment strategy that has to be monitored constantly in order to be more profitable as compared to staking.

Allowing users to purchases bonds through Minting allows Snowbank to accumulate its own liquidity. We call our own liquidity POL. More POL ensures there is always locked exit liquidity in our trading pools to facilitate market operations and protect token holders. Since Snowbank becomes its own market, on top of additional certainty for gAKITA investors, the protocol accrues more and more revenue from LP rewards bolstering our treasury.