Buoy is an ERC-20 token designed from the ground up to reimagine the way decentralized index funds are actually funded. In the abstract, index fund tokens like Buoy are not new. Over the year, we have seen a surge of these type of autonomous index funds. These funds are attractive both for their high APY pools and the fact they are treading new ground in the DeFi market.
Since other tokens such as Statera have demonstrated proof of concept for these types of index funds, we won’t spend our time exploring the value of an ERC-20 index fund as a whole. Instead this whitepaper will try and demonstrate a new model of backing these index tokens. One of the main questions which remains unanswerable by the majority of index tokens today, ‘what is it exactly that makes your token valuable?’ It’s important to take this question seriously, as it is not always so trivial. Obviously, the token isn’t valuable on its own, at it’s base it is a rather standard ERC-20 contract.
The automated pool2 which these tokens are taking advantage of is a DAO, and not proprietary to any one token. Is the value from the token solely in the pool? Because if the token’s value is reducible to the value of the pool, then that token can’t itself add value to the pool. Worse, the index token may actually end up reducing the value of the pool as a whole. If the pool is more valuable without an index, why have one? Why not use WETH as a makeshift index? Or, even the Balancer pool ownership tokens themselves.
Buoy was designed differently. Buoy takes advantage of a 15 day public offering to raise capital which is in turn locked into the asset pool, providing both substantial liquidity, and a real source of value backing the index tokens before a single person even decides to pool. A Trustless Injection of Liquidity (TIL), unlike a traditional ICO, is not a way to raise millions for a development team; a TIL is a method of crowd-sourcing the value of an index token itself.
1,000,000 token limit
Total supply is decided by amount of ETH raised. 90% of funds raised are trustless swapped and injected into the index fund, providing permanent liquidity to the token