ShapeShift DAO is excited to announce the release of FOXy—a rebasing, yield-bearing version of the FOX Token一effectively giving the FOX token even more superpowers! FOXy stands for “FOX Yieldy.” It is not an ancillary feature of the FOX Token and the ShapeShift platform; rather, it is now the central economic reason to HODL FOX. Before FOXy, the FOX Tokens' primary utility in the ShapeShift DAO was to function as a governance token allowing the holder to participate in the ShapeShift DAO governance process一directly allowing FOX token holders to guide the future of the DAO and its treasury. With the current solutions to earn yield with FOX, users can utilize their FOX Tokens to provide liquidity, earn yield, and vote. The FOXy Token expands this utility by allowing users to now passively compound their FOX holdings.
What is FOXy?
Through a single-sided staking contract provided through ShapeShift on Ethereum Mainnet, FOXy is an ERC20 rebasing Token redeemable 1:1 with FOX Tokens. Using the deposited FOX, the DAO can implement various DeFi strategies to reward FOX stakers一with the current initial strategy staking FOX on Tokemak. Additionally, the DAO can share a portion of revenues generated from DAO activities with FOXy holders. Combined, the rewards from DAO revenues and the rewards earned from DeFi strategies such as Tokemak should make FOXy the premier way to earn yield on FOX staked single-sidedly.
Prior to FOXy, FOX holders who wanted to earn yield had to manually stake and claim their yield from Tokemak一costing an exorbitant e amount in network gas fees. These rewards were unable to be easily or automatically compounded, creating additional friction and costs for holders. At the time of writing this article, FOXy generates yield by utilizing the Tokemak reactor which enables staked FOX to earn TOKE rewards. The DAO then converts their TOKE rewards from the reactor to FOX, which is then used to reward FOX stakers. By combining FOX rewards from DAO revenues and compounded rewards earned from protocols, FOXy provides FOX holders with an effortless way to maximize their yield on FOX Tokens.
FOXy via DappBack
We have joined forces with DappBack to bring you our bespoke Web3 Loyalty Program. DappBack is our official partner in building our very own blockchain rewards system allowing our community to learn, contribute, and be rewarded on-chain. You can complete simple tasks such as following our Twitter page, joining our Discord server and using our dApp to earn NFTs and crypto rewards.
As a thank you, we have now gone a step further to ensure our FOX fam is generously rewarded for their involvement and participation. Users who have completed enough tasks to reach all 3 Tiers in our Web3 Loyalty Program are eligible to win FOXy! We will be airdropping 60,000 FOXy to 50 of our Tier 3 FOXes.
To reward those of you who earned our “Season 1” Tier-3 NFT Badge (if you are still HODLing it), you are automatically entered into the raffle for one (1) entry for 1 of 50 prizes of 1,200 FOXy on Mainnet. Truly thank you for continuing to believe in our vision and showing your support by HODLing and showing off your FOX spirit!
Didn’t have time to complete our on-chain tasks during Season 1 to receive our Tier 3 ShapeShift DAO Breeze NFTs? We launched 250 new Level 3 NFTs for Season 2 to be earned to qualify you for two (2) raffle entries for our 60,000 FOXy prize pool.
Origins of FOXy
FOXy originated from a bounty proposal created by "Beorn" (Erik Voorhees), on January 5th, 2022 on the ShapeShift Forum. Over five teams of engineers with backgrounds ranging from long-term ShapeShift contributors to other external contributors applied for the bounty. After roughly a day of discussion on the ShapeShift public forum regarding extending final deadlines due to audit timelines and the DAO’s ability to provide adequate QA, the proposal was amended. After engaging with the five candidates who applied for the bounty with the revised proposal, Beorn granted the bounty to Toshi four days later, on January 10th.
The Developer - Toshi
Toshi started working with blockchain apps in 2015一starting with mobile and front-end development and moving to full-stack blockchain work shortly after. He helped build the original ShapeShift Android and Coincap app in late 2015 and has been following the community since. Post-pivot to ShapeShift’s decentralized trading post-KYC, Toshi was one of the engineers responsible for the THORChain and 0x integration into the ShapeShift platform. While he is currently not an official member of any ShapeShift DAO workstream, his interaction in the FOXy and ShapeShift ecosystem makes him just as much of a part of our FOX Fam as any other contributor.
How do I Earn with FOXy?
The FOXy contract will reward FOXy holders by rebasing their accounts with more FOXy to match the amount they have generated with their staked FOX. This is how ShapeShift distributes rewards equitably to contract participants. Through FOXy, everyone receives the same percentage of rewards commensurate with the amount of FOXy they hold per epoch.
To stake FOX, go to app.shapeshift.com then go to the “DeFi Earn” section and select FOX. You will send your FOX to the staking contract and receive FOXy on a 1:1 basis. FOXy is not transfer-restricted and can be traded, HODLed, or even LPed like any other ERC-20 token.
To unstake FOX, go to app.shapeshift.com and the same “DeFi Earn” section, select FOX to “unstake”. You send FOXy back to the staking contract to receive FOX at 1:1. When you unstake your FOXy, you have two options:
1. Wait two epochs: roughly ten days (this is just under two of the standard Tokemak epochs)
2. Instant withdrawal with a flat-rate fee. ShapeShift can offer this due to a liquidity reserve contract that acts as a single-sided LP Token. The DAO—or anyone—can add and remove liquidity to receive the instant unstake fees for providing liquidity. The LR (liquidity reserve) contract will then unstake the FOX from Tokemak.
The DAO-or anyone-distributes rewards via the add rewards function, which sends FOX to the staking contract without asking for FOXy back. This increases the ratio of FOX staked to FOXy outstanding and results in a rebase to correct the difference. Through rebasing, we can compound yield with no need to do anything except hold FOXy. Rebasing occurs retroactively, which means the end of epoch 100 triggers a rebase of profits from epoch 99. This delay lets you see what you are missing if you unstake or what you will get if you stake.
FOXy in Practice: An Example
There are 500k FOX staked and 500k FOXy outstanding. FOXy produced a 5k FOX profit for the epoch (one week), which it uses to deposit 5k of FOX. It sends that FOX to the staking contract; there are now 505k FOX staked and 500k FOXy outstanding. FOXy supply needs to increase by 5k, or 1%, to return to balance. So, FOXy is rebased up by 1%.
Why Should I Use FOXy?
If you are long on FOX and looking for a way to passively earn yield while continuing to be able to participate in the ShapeShift governance system, FOXy is the smart contract for you. Not only can you save on hefty Ethereum gas fees, but you are automatically rewarded in FOX Tokens instead of the standard TOKE that the Tokemak reactor offers一all occurring without having to re-stake, harvest, or manage your FOX Tokens.
ShapeShift DAO Benefits
The DAO benefits from FOXy as it can grow its holding of TOKE in the treasury which is used to vote in the Tokemak governance process. Holding TOKE and swapping it for FOX allows the DAO to increase its treasury’s exposure to different assets without impacting the price of FOX. The Treasury Management and Diversity Committee (TMDC) decides how much TOKE or FOX the DAO wants to hold at any given time and how much is converted to other assets. This flexibility allows the DAO’s community-appointed committee to become more involved with utilizing and diversifying the treasury.
FOXy passed two audits—one internally conducted by the ShapeShift Security team and another by Zokyo, which passed with a 98/100. Click here to view the audit. A few architectural decisions to the FOXy smart contract were implemented to ensure that the FOXy contract maintains the rigorous security and quality standards that all ShapeShift products live by.
While the first security-oriented architectural decision was the omission of upgradeable smart contracts, this was quickly changed as upgradable smart contracts allow the DAO to switch investment strategies easily and flexibly一enabling us to give the end user the most optimized yield.
Regarding the vulnerability of FOXy to attack vectors (where users could determine the schedule of rebasing, mint FOXy right before a rebase, and then immediately sell it after), there are two smart contracts to prevent the risk. The first being a "warm-up" smart contract that will issue a claim to their FOXy with a vesting period. The second smart contract is a "cool down" contract that solves the Tokemak requirement for withdrawals to align with their cycles. The "cool-down" smart contract locks the users' FOXy funds into the contract until the FOX is available to be withdrawn from Tokemak. Once the FOX is available to be withdrawn from Tokemak, users have the opportunity to claim their FOX.
The Future of FOXy
While the initial version of FOXy focuses on building out a basic functional version of FOXy, using only a single yield strategy of depositing FOX into the Tokemak Reactor. The DAO envisions FOXy incorporating a basket of yield strategies in the future.
We recognize that the FOXy contract will likely be helpful for other DAOs, and are looking forward to deploying additional yield-bearing governance Tokens!
FOXy is for everyone! Come join our FOX FAM!