Introducing Haze Finance 2.0- World’s First Decentralized Privacy Tokens Protocol
In Haze Finance 1.0, the team introduced the concept of Frequency Mining to DeFi and got feedbacks that way exceeded our expectations — Haze Finance accumulated over 550 million BUSD of total transactions volume in 2 weeks time and have distributed nearly 2 million worth of protocol fees to the HAZE tokens stakers. However, even though Frequency Mining is the first of its kind and gives users with small funds a chance to earn great profits, it still has its flaws — the cost and reward ratio is set and predetermined. This is the uniqueness and also a double edge sword of Frequency Mining. When the reward ratio is set and predetermined, the only way users can accumulate more HAZE tokens for Frequency Mining rewards is by repeatedly deposit and withdraw funds in and out of the protocol, which in the process of doing so, contributed to the 2 million protocol fees for Haze Finance. But a set cost and reward ratio also means that when HAZE token falls below the cost of Frequency Mining, people lose incentives to participate in the mining process. This is the first challenge that we face in Haze Finance1.0.
The second challenge we face in Haze Finance 1.0 is that as the BSC community and private transactions sector expand, there is a growing number of private transactions protocols that are providing very similar services. This leads the team members into thinking, “So what makes Haze unique?” and furthermore, how can we achieve our initial goal of providing a universal private transactions services that allows all DeFi users to enjoy their privacy and protect their assets allocations?
After weeks of brainstorming and developers testing out possible methods, we are finally ready to tell the world:
Haze Finance Team always likes to stay ahead of the game when it comes to introducing new concepts and being innovative. From being BSC’s first private transactions protocol, to being the first project that introduced the idea of Frequency Mining to DeFi. We are now ready to do this for the third time.
Yes, Haze Finance 2.0 is here!
The heart of Haze Finance 2.0 lies in the revolutionary concept that we are bringing to the private transactions protocols field. Haze Finance is combining the uniqueness of open-source and decentralization from DEXes such as Uniswap, together with our concept of private transactions to introduce to the world, for the first time ever, a decentralized privacy tokens program, also known as DEPT.
“What is a DEPT?”
A DEPT is an open-source and permissionless platform that allows anyone to create a mixing pool for any tokens to the private transactions program and making them privacy tokens — just like how anyone can add a new LP pair to Uniswap. This allows users to privately transfer any tokens they want without having to go through the team or application process, ensuring the privacy of token holders of any kind and most importantly, making the process efficient and permissionless.
Furthermore, in the DEPT program launching in Haze 2.0, we are adding an anonymity set incentive program, Misty program. Any token that’s in mixing pool can apply to be in Misty program, HAZE tokens holders can then exercise their governance right and vote to pass or fail the project’s Misty program application. When passed, the projects’ tokens can join Voluming Mining and there will be a portion of HAZE tokens allocated as the Voluming Mining rewards for that the passed tokens. There will be more detailed articles published on the subject of DEPT soon!
Introducing Volume Mining
The second key feature in Haze Finance 2.0 is Volume Mining, A Brand New Mining Reward System. In Haze Finance 1.0, we introduced to the DeFi world of Frequency Mining. In Frequency Mining, users get rewarded every time they deposit into Haze Finance, with no time restrictions. The rewards amount for each deposit are set and predetermined, starting with 1k BUSD deposit for 0.6 HAZE, 10k BUSD for 6 HAZE and 100k BUSD for 60 HAZE, with 0.2% reward reduction for every 1 million increase in total volume. Although worked out well in the beginning, Frequency Mining has entered a stagnation period when the reward (HAZE token price) falls below the cost (protocol fee+gas fee). Time for an upgrade, no more Frequency Mining.
In Haze Finance 2.0, we have switched the reward system to volume base, hence the brand new Volume Mining. In every block, there will be a set amount of HAZE tokens being released, users will get the share of the HAZE tokens proportionally according to the total deposit volume in the block of and every block after their deposits, even after their withdrawal of the deposited funds.
This might sound a little confusing, so here are examples of how volume mining works:
In Haze 2.0, Joey deposits 100K BUSD in block 40310 and decides to withdraw immediately. Starting from block 40310 and onward Joey will FOREVER get the HAZE tokens in that block that is proportionate to the volume he contributes, yes even though he withdraws the deposit from the protocol right away. If no one else deposits in block 40310 other than Joey, then he gets all the rewards in that block.
But in block 40311, Phoebe deposits 10K BUSD in, so in block 40311 and all the blocks after that Phoebe will share with Joey all the HAZE rewards in the blocks, proportionally. If only the two of them deposited in block 40311, then Joey will take 90% of the rewards in that block and Phoebe will take 10% of the rewards. And if neither of them nor anyone else ever deposits in Haze Finance 2.0 after block 40311, this proportion will stay true forever.
But let’s say in block 50345, 200 people deposit in Haze Finance 2.0, accumulating a total volume of 20 million for that block, then starting from block 50345 and every block after it, Joey’s share of HAZE tokens rewards will only account for (100k/ 20million)*100% = 0.5% of the total reward amount (that’s if he never deposits again after his 100k deposit in block 40310). So as more people deposit in the protocol, Joey will have to continue to deposit too if he wants to maintain his high share of reward.
Note that there’s one very important characteristic of Volume Mining here: deposit once, and you will get the proportionate HAZE tokens as rewards in the deposit block, and all the blocks after the deposit block as well, EVEN IF YOU WITHDRAW YOUR DEPOSITS FROM HAZE FINANCE. But in order to maintain your a good share of the rewards emitted, users will have to periodically deposit in the protocol to make sure their deposit volume don’t get diluted too much from the total volume!
Volume Mining, unlike Frequency Mining, has a dynamic cost/reward ratio. If only one person deposits, then no matter how much this person puts in, he/she will get ALL the rewards in the block. But as the number of participants increases, one has to keep participating in order to maintain the rewards ratio. But don’t worry because more participants means more protocol fees collected, which means more staking rewards for HAZE tokens stakers!
That’s it for today! This is just the first big step toward the revolution of protecting on-chain privacies, but we have come a long way and we’d like to thank the Haze community for the support and trust you have given us! Thank you all, better things are yet to come!