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Sunder Protocol is a framework that allows for utilities of Governance tokens to be mutually inclusive, allowing for participants to remain exposed while being able to bear interest via strategies, without sacrificing on voting rights. By exclusively integrating with Sushi Protocol, 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.

Infrastructure

The key component that allows for executing such a value proposition, is the architecture of splitting (ergo sundering) any governance token into isolated tokens to represent Governance vs Earnings. In order to trigger minting of these, the Sunder Protocol requires depositing of underlying governance tokens e.g. COMP, providing decentralised vault services.

• 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. dToken or eToken), 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

Infrastructure Overview

Governance participation through DAO Isolated Tokens

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.

As this process is triggered via Snapshot, simply needing a signature message originated from users wallets, the outcome for dToken holders results in zero cost of executing governance participation rights.

Earning strategy with Bento box

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 Sunder Governance Token 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 Sunder Governance Token holders, while the strategy contract will execute these with available tokens from the vault.

Products like Bentobox will play an important role to generate yield for collaterals from the Sunder Vault, as one of the potential environments to deploy on.

As BentoBox becomes more versatile, Sunder will grow in integration possibilities with its strategies.

Sunder Governance Token incentive layer

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 occuring 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.

By providing liquidity which is incentivised at a protocol layer, individuals can herewith choose to buy or sell dTokens on SushiSwap. A novel way for people to value Governance in the defi landscape.

External players that wish to specifically obtain exposure to a Governance token in order to participate on a specific proposal could now acquire exposure and voting rights at a marginal cost, given the isolation of it’s utility.