Vigor.ai: Answers to Commonly Asked Questions Especially for You
VIGOR is a decentralized autonomous community supporting and maintaining the open source free and fully decentralized VIGOR protocol. Anyone can join the DAC as a member and if active become a Custodian, chosen on a daily basis to provide fully decentralized guidance in the development and other support or maintenance roles.
The Vigor Protocol is currently running on the EOS main net and is in the final testing phases with custodians and DAC members ensuring all the final bugs have been worked out making it safe for full fledged public use. Vigor.ai will be going live very soon, and in anticipation for this you may very well like to get a head start on understanding how the Vigor Protocol and platform works and what separates it from others in the DeFi space.
The following is a copy of some of Vigor’s answers to Frequently Asked Questions from the community in an effort to give you a primer on the inner workings on the Vigor Protocol and platform and how you can better understand what it is all about.
Is there an MVP?
Is there a Vigor testnet?
The MVP is here: app.vigor.ai
What is VIG?
The fee-utility token is called VIG. It’s utility is to provide access to the system, to be used as a fee token, and to be used as a final reserve.
What is the maximum supply of VIG?
1,000,000,000 VIG tokens. VIG circulating supply will always be less than that as some of the VIG awarded to by Lenders is held in the Final Reserve.
How does the Vigor Protocol work?
The VIGOR protocol is decentralized and open source. Anyone has the ability to lock EOS tokens as collateral and issue VIGOR against it.
At what point does the system issue VIGOR?
VIGOR tokens are issued by the contract when a loan is taken. This happens when the borrowers lock up tokens as collateral. The tokens can either be EOS or a portfolio of crypto tokens supported by the system.
What do I need in order to secure a loan in Vigor?
For a borrower to receive a VIGOR loan, the borrower needs to lock in their crypto collateral and deposit the appropriate amount of VIG tokens, calculated as a percentage of VIGOR to be used as premiums to secure the loan collateral. The system requires that your collateral contains some VIG so it can take premiums every period.
Am I only allowed to lock my EOS as collateral or can I also add other assets in my portfolio?
The system will allow for a portfolio to work as collateral backing a single loan.
What additional crypto can I include in my portfolio as collateral?
Many EOS native tokens, chosen by users. In order to guarantee system health, custodians have multisig permissions to add and remove collateral types.
Can a borrower get their crypto back?
Borrowers can get their crypto back by refunding their borrowings with VIGOR which is then retired
What are the use cases for VIGOR?
Incentive: Be rewarded by using EOS as the insurance backing VIGOR
Leveraging: use up to 10x leverage by taking secured VIGOR loans followed by selling it for EOS
Hedging: reduce exposure to price volatility by taking secured VIGOR loans followed by hodling VIGOR
What happens when the value of my collateral falls below the amount I borrowed in VIGOR?
When your collateral drops below the value of the loan issued, the loan will enter bailout. At this point the lenders take over and recapitalize the undercollateralized loan to ensure system health.
What triggers a bailout?
Premiums are required to be denominated in VIG tokens and must be posted prior to drawing loans; insufficient maintenance of VIG balance triggers bail-out of the loan with borrower retaining any excess collateral. Lenders are rewarded and incentivized with VIG.
What is the Final Reserve?
The system automatically stores a portion of VIG insurer rewards to build up a Final Reserve. The VIG Final Reserve is used independently by the Smart Contract to rebalance the system if at any time the insurance pool is depleted. Nobody has control over the Final Reserve, only the decentralized Protocol and Smart Contract itself.
What is the cost to use VIGOR?
The cost of the insurance adjusts based on how risky the system is relative to a target; this is market price discovery without the need for trading or an order book. The risk model considers levels of overcollateralization, debt and insurance assets. It is fully on-chain and mimicks standards for classical insurance; we call this on-chain risk and compliance.
Why the need for overcollaterization and a Final Reserve?
There are three levels of volatility protection for low volatility payment token loans. Borrowers over collateralized their loans protecting against normal volatility. Lenders post tokens as insurance assets which provide further protection against price jump risk. The final reserve provides a third layer of volatility protection in case the insurance pool depletes, and is more formally described as the buffer that covers stress losses or model risk.
How is my collateral secured?
VIGOR appoints 21 temporary Custodians on a daily basis, chosen among the fully free and decentralized autonomous community, who control for safety and security purposes multi-sig permissions to 3rd party audited smart contracts.
How does the Vigor price defeat volatility?
VIGOR should be valued externally with a low volatility quotation, because users have incentive to stake enough crypto collateral so that even during stressed volatility periods there would be at least a minimum amount of collateral to protect each VIGOR’s value. The contract continuously stress tests the system and autonomously updates the insurance premiums. If solvency is below target premiums rise to attract more insurance collateral and slow further borrowing. When users make/take loans it is a credit/debit to the system risk budget. With confidence that the system has sufficient collateral so that it is adequately capitalized to survive high volatility conditions, traders can soft arbitrage by taking loans or unwinding loans to their advantage if the value of VIGOR departs from its baseline.
How are liquidation penalties distributed?
VIGOR doesn’t charge liquidation penalties. When your loan is liquidated due to a low collateral ratio, many other protocols will also hit you with a liquidation penalty. Some of these are as high as 20%. VIGOR doesn’t charge ANY additional fees that are commonly seen on other protocols (ie administration fees, stability fees etc).
Why build VIGOR with other low-volatility tokens on the market?
VIGOR is designed from the ground up using time tested financial modeling. The VIGOR protocol actively evaluates system level risk and continually adjusts to reduce that risk. Other tokens use simple overcollateralization techniques to try to limit risk but do not actively evaluate and manage it. These other systems, in general, rely on secondary auction markets to sell off bad debt in case of a Black Swan event. VIGOR’s loan debt is automatically transferred to the insurance pool (then the final reserve) without relying on secondary markets to sell the bad debt to regain solvency.
How does Vigor compare to others in the DeFi space?
Why use the EOS blockchain?
There are many reasons why VIGOR has decided to build on EOSIO technology. Without going into great detail we can sum it up by mentioning a few features that EOSIO offers. These include:
Speed: 0.5 Second block times ensure quick access to funds when necessary. This is a critical component for every decentralized platform.
Security: EOSIO is built with advanced account permission capabilities. There are endless combinations of multisig and custom permissions available on EOSIO that enable the full range of user needs while providing unprecedented security.
Battle tested code base- C++ smart contracts: Using a C++ code base allows developers to reference previously tested code from a plethora of code repositories.
Feeless: Resources are renewable and projects have the ability to cover user resources to allow their users to transact for free on their platform.
Ability to upgrade operating code: Continued improvements/critical updates can be made to code with little to no impact on operating platforms.
Interoperability: EOSIO is built with chain interoperability in mind. Many EOSIO chains already exist and there are secondary solutions (Dapp Network) that provide the opportunity to access the VIGOR decnetralized platform for more users, across multiple blockchains.
Why do I need to create Vigor if I can buy it on the secondary market?
Taking out a VIGOR loan allows you to maintain exposure to the crypto market (ie maintain ownership of your EOS) while providing you with some liquidity. You can leverage your crypto holdings by taking out a VIGOR loan and purchasing additional crypto with it. Additionally, you can take out a crypto loan (ie posting VIGOR to get EOS) and sell it on secondary markets to be able to go short.
Is the smart contract code publicly available?
Yes, please visit our repository
Who’s on the team?
There is no predetermined team, controller or owner of the VIGOR Protocol. VIGOR on a daily basis appoints 21 temporary Custodians, chosen among the fully free and decentralized autonomous community. Custodians are responsible for building the VIGOR protocol according to the whitepaper and securing the multisig.
To view the top 21 at any given time please see the Vigor Custodian Board.
What is the process to register as a candidate and become a custodian?
Overall the process of becoming a candidate is pretty easy. Just ask Buck!
If you like what you found here, please consider following Vigor on various platforms around the space. At it’s heart Vigor is a DeFi protocol built by the community of DAC members that see the value of what blockchain and crypto is to become. We welcome those that share our vision with open arms in hopes that through community we will best enable an experience that is tailored towards the public. To keep updated please visit us at the following locations:
- Telegram: https://t.me/vigorprotocol
- Twitter: https://twitter.com/vigorprotocol
- YouTube: Vigor Protocol (https://www.youtube.com/channel/UC2SXCn9e6p3HLC-UPe4dJww), Vigor DAC (https://www.youtube.com/channel/UCbT-JlRjUhZba3crqG7GzUA)
- Medium: https://medium.com/@vigordac
*Vigor Protocol DeFi Lending Application (https://app.vigor.ai) can also be accessed in the following languages: Spanish (https://vigor.ai/es), French (https://vigor.ai/fr), Italian (https://vigor.ai/it), Korean (https://vigor.ai/ko/), Turkish (https://vigor.ai/tr/), and Indonesian (https://vigor.ai/id/)
Disclaimer: The VIGOR Protocol is not a Financial or Payment Service of any kind and in any Jurisdiction. The VIGOR Protocol and Smart Contract does not accept as collateral or insurance or work at all with security tokens of any kind and with fiat or asset backed stablecoins, whether global or limited in scope. The VIGOR protocol does not allow, process or facilitate in any way user-to-user transfer of any token or other assets or values, nor third party payments of any kind.
The Vigor DAC and its Members and Custodians do not own or control the VIGOR Protocol, but simply contribute in its development, maintenance and security in a fully decentralized way.
An independent, public no-profit association incorporated in Singapore and composed of VIGOR Protocol developers and enthusiasts and Vigor DAC members and Custodians, denominated VIGOR DAC LTD., oversees that the core principles of the DAC, the Protocol and the Whitepaper are respected and ensures complete decentralization and independence is always safekept and maintained.