The Decentralized Autonomous Organization of Peer2Panel (PanelDAO)
Understand the Defi ecosystem of Peer2Panel
This article is about the Defi Ecosystem of Peer2Panel, that we introduced in our previous article. Briefly, Peer2Panel makes the bridge between the traditional renewable energy market and the blockchain through the tokenization of photovoltaic panels into SolarT tokens. The PanelDAO was created to ensure that SolarT holders could benefits from the recent Defi innovations on the Ethereum blockchain.
One of the main breakthroughs of Defi was the development of collateralized loans (Aave, Compound), providing instant liquidity over collateralized crypto assets. With the PanelDAO, we implement a similar model, where user can stake their SolarT token in order to borrow funds temporarily.
The PanelDAO ecosystem gravitates around three Ethereum compatible (ERC) tokens.
- Tokenized solar panels (SolarT) — ERC721 represent the ownership of a unique physical solar panels (thus non fungible). A new token is minted for each new solar panels acquired and installed by P2P. Likewise, defective panels are purchased back by P2P and their corresponding SolarT token burned. Ownership of SolarT entitles to consistent income from the generated electricity sold on the market.
- Fungible solar panels (FS) — ERC20 is a fungible stable coin pegged to a pool of staked tokenized solar panels. Briefly, its role in the ecosystem is to provide temporary liquidity to investors who own non fungible solar panels and serve as a viable store of value alternative to fiat-pegged stable coins. In fact, the intrinsic value of FS is guaranteed because they are over-collateralized by staked SolarTs.
- P2P utility token (P2P) — ERC20 is the utility token of the P2P ecosystem. Long term stakers of P2P will benefit from reduced transaction fees and increased interest rate on the generated electricity. Liquidity provider will receive reward in P2P. The details tokenomics of P2P will be revealed before the ICO.
SolarT marketplace
The main place to trade solar panel tokens is the Peer2Panel marketplace, where users can buy, sell and bid on SolarT tokens. We charge low transaction fees (1%) compared to other established marketplaces such as Opensea or Rarible (2.5%).
SolarT collateralized loans
FS stable coins can be borrowed by staking SolarT tokens. They are minted by staking SolarT tokens and are burned when the user returns them in order to retrieve his SolarT token, hence have a dynamic supply. This way, we ensure that FS tokens are always backed by real physical solar panels. The amount of FS acquired by the staker is determined from the intrinsic value of the panel (in USD).
Collateral and interrest rate
Providing an amount of FS in exchange of staked panels is a risk for the P2P ecosystem. In fact, the electricity market price may fluctuate, or panels themselves may depreciate. In compensation for this risk, the P2P smart contract implements the two following mechanism. (i) An interest rate of 3% per year on the borrowed FS is charged to the SolarT staker, deducted directly from the profit of generated electricity. (ii) Minted FS after staking a panel are overcollateralized, with only 85% of the panel intrinsic value minted in FS to the user. Note that the interest rate may be adjusted to favor the stability of FS.
SolarT loans liquidation
In the situation where the SolarT collateral intrinsic value rises above 95% of the borrowed FS, the smart contract will automatically liquidate the position by opening an auction on the P2P marketplace with a starting price of 95% of its intrinsic value. In the rare case where no buyers can be found after 1 week, P2P commit to buy the panel with its dedicated found, thus always guarantying exit liquidity.
Yield farming
Liquidity pools
We incentive two liquidity pools, FS/USDC and P2P/USDC, with reward paid in P2P token. Note that FS being backed by real physical panels with intrisic value, its value should always be close to 1USD. Thus impermanent loss is expected to be low on the FS/USDC pair.
Staking
FS can be staked in order to receive interest, which comes from the fees collected from the FS borrowers. In other word, staker of FS act as indirect lender of FS to SolarT stakers.
P2P can be staked to receive benefits and interests. Stakers of P2P will (i) receive part of the revenue from the P2P ecosystem, (ii) benefit from lower fees in the P2P marketplace, and (iii) get increased interest rate on the generated electricity. In order to incentives long term staking, the magnitude of received benefits will depend on the amount and the time the users staked P2P.
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