FAQ

What is Sunder Protocol?

Sunder Protocol is the first framework that allows for utilities of Governance tokens to be mutually inclusive, enabling participants to remain exposed while being able to bear interest via strategies, without sacrificing on voting rights. We’ve enabled a solution under which participants can enjoy both DAO participation and earning yield on governance tokens in an efficient manner, as well as new forms of pricing/speculation over the above-mentioned isolated utilities. All without having to exclusively choose between one or another, users that sunder Governance tokens (e.g.COMP), will be able to keep voting rights while enjoying yield aggregation revenue.

What is Sunder’s value proposition?

In essence, the vision of Sunder Protocol is to allow any user to extract full value of governance tokens through Sunder Protocol.

Participating in governance while earning yield to be simultaneously achievable, without excessive overhead cost spent on fees.

Governance Participation should not be an excluding factor for alternative utilities, left available to fewer large holders.

The Sunder Approach; Undoing DeFi:

The core concept of Sunder is to offer a new solution to the industry that breaks down one of the last unresolved dilemmas of exclusion.

Bridging two of the core features of DeFI, participants will now be able to benefit from financial strategies with revenue-generating outcomes while not needing to sacrifice their right of participation in governance on the protocols they hold partial ownership of. Eliminating sunk costs of having to actively manage governance token allocation, leaves room for binding a closer symbiotic relationship between both Decentralised Finance applications and their respective DAOs.

What is the SUNDER Governance Token?

SUNDER is the core component that enables participation within Sunder Protocol. Users can interact/contribute in various levels with SUNDER:

• Governance Participation & Proposals

• Participation on Earnings, Vault & Strategies (incentivised with protocol fees for Strategists)

• Participation on Integration with additional Governance Modules (propose & vote, decide on allocation for mining rewards)

• Single-sided Staking for cash-flow distribution (protocol fees)

• Incentivised liquidity provision on Sushi AMM Pools

What are DAO Isolated Tokens?

dTokens are the representation for voting rights and governance participation of any underlying governance token in the Sunder Vault.

dToken holders can vote on any proposal mirrored from an original proposal executed by the underlying DAO. Sunder will use its snapshot based software to collect voting participation from dToken holders as an input to ‘For Contract’ and ‘Against Contract’. Any participant can trigger the transaction to execute the needed rebalancing of both contracts, by moving collateral from the earnings vault to the voting contract, and hereby delegating underlying governance tokens to be used for voting accordingly.

What are Earnings Isolated Tokens?

eTokens are the representation over rights to obtain Yields sourced from any underlying governance token in the Sunder Vault, which are deployed through the yield aggregation infrastructure.

How are Yields for eToken holders sourced & managed?

Similar to how Yearn Finance executes strategies on yield optimisation, Sunder allows for community engagement to determine strategies for optimising earnings over governance tokens under management of the Sunder Vault. Strategists can suggest strategies via holding SGT and obtain returns structured as strategist fees. These are deployed via 3 core smart contract structures:

• Vault contracts will determine where tokens from Sunder vault will be allocated.

• The Controller contract will set strategy accepted by SGT holders, while the strategy contract will execute these with available tokens from the vault.

What are the collateralisation rates between native governance tokens and dTokens & eTokens?

The issuance of DAO and Earnings Token are strictly 1:1, and both issuance and redemption are open at all times.

In order to redeem underlying governance tokens back, users will need to own both DAO- and Earnings Isolated tokens at a 1:1 ratio in order to receive the designated amount of underlying tokens back. This is set in stone at a protocol level, coded into core contracts, and cannot be circumvented.

What else can I do with dTokens and eTokens?

In addition to execution of the core isolated utilities, as seen above, participants have the added choice of engaging with liquidity provision on the dedicated pools on SushiSwap for both DAO and Earnings isolated tokens. Besides fee acquiral over trading volume occurring on the pools, if LP tokens are staked within the Sunder Governance Vault, participants will hereby engage in mining the Sunder Governance Token via farming distribution.

Rewards for different protocol’s governance tokens will be determined by the Sunder Governance Module Proposals.

What are some of the benefits of such isolated tokens?

• Vaults optimize exposure to bearing interest vs. allocating governance participation.

• Participants seeking for isolated exposure can directly purchase dedicated isolated tokens for their desired use (e.g. DCT or ECT), at a fractional cost of its underlying.

• Participants exposed to both can now participate in governance while bearing interest without requiring expenditure on additional fees. Vaults facilitate gas optimization for users

What’s the advantage over establishing liquid markets for DAO & Earnings Isolated Tokens?

The importance of creating a free market for the DAO and Earnings component enables a solution for users to define a set price for voting rights as well as future earning rights in an isolated manner. Bringing the industry one step further in finding an answer over how Governance Tokens can be utilised and priced in a more efficient way.

Why Sushi?

The key role that Sushi has in achieving Sunder’s value proposition, can be stated from multiple perspectives. From allowing liquidity for Isolated Governance and Earnings Tokens, to deploying strategies via BentoBox, potential Onsen incentives, Governance integration... Sushi is, for Sunder, the one-stop shop that offers a full-fledged framework under which all functionalities can be enabled.

Besides these, the aligned value proposition of both protocols, Sushi’s multi-chain environment and comprehensive features of its AMM & adjacent products, turn this collaborative effort into a symbiotic relationship between both protocols, benefitting from each other at scale.