ErgoWell

ErgoWell is a project meant to be used for investing in ventures trying to raise money through crowdfunding. As an investor, you can search and find projects that are attractive to you, invest in them and receive interests and rewards. As a venture owner, you can raise money for your project through crowdfunding.

Idioms used

Venture/Project

In ErgoWell, anyone (a person, organization, etc.) can define a venture which is planned to do something special in a determined period of time (which is called its lifetime). It needs a determined amount of fund to get started. At the end of its lifetime, it may be profitable for the investors or not.

Investment/Staking/Locking

We use these terms interchangeably in this doc and simply mean putting some money in a venture to fund it and receive interests and rewards in return.

Interest

It is money that is payed to investors in regular periods to encourage them keep their money in the venture. Unlike reward, it is guaranteed to be payed.

Collateral

Some ventures may provide some collateral that guarantees if the venture is unsuccessful, this collateral gets distributed to the investors to compensate some or all of their loss. In other words, it is guaranteed to be payed in case of venture failure. It may come in the form of ERGs, normal tokens or NFTs. Please note that this collateral is distributed by ErgoWell manually. It's not an automatic transaction.

Reward/Profit

Any venture is meant to make profit for its investors. In ErgoWell, this profit, like the collateral, may have different forms. It gets distributed to investors at the end of venture lifetime. Note that unlike interest, this is not guaranteed to be payed.

Risk

When someone stakes in a venture, supposing it is funded successfully, a part of the fund is given to the venture and is not accessible to investors anymore. It just may be returned at the end of venture lifetime, but not necessarily. So we can say that investors are risking that part of their money in the hope for a reward. They may lose that portion totally and get nothing back, or they may get huge rewards. Please note we also may mention "reducing risk" in parts of this text (which mean unstaking part of your money and putting it somewhere else), but it has nothing to do with the risk we defined before. That risk cannot be reduced: You just risk it once, when you invest your money, and it cannot be changed at all.

ErgoWell: Investor's point of view

Suppose you are an investor, trying to lock your money in a good venture, receiving interests and other rewards. In ErgoWell, you may do something like this:

graph LR;
  Start{{Start}} --> Find[Find an attractive<br>project];
  Find --> Invest[Invest in the project<br>before the deadline];
  Invest --> FundingCondition{Is project funded?};
  FundingCondition --Yes--> LifetimeCondition{Is venture<br>lifetime ended?};
  FundingCondition --No--> Refund[Receive all your money back];
  Refund --> End{{End}};
  LifetimeCondition --Yes-->Condition2;
  LifetimeCondition --No-->Interest[Receive periodic interests<br>during venture lifetime];
  Interest --> Condition1{Venture doesn't seem<br>attractive anymore?}
  Condition1 --Yes--> Unstake[Unstake all or part of<br> your locked money];
  Unstake --> UnstakeCondition{{Have you unstaked<br>all of your money?}};
  UnstakeCondition --Yes--> End;
  UnstakeCondition --No--> Interest;
  Condition1 --No--> Interest;
  Condition2{Is venture profitable<br>at the end of its<br>lifetime?} --Yes--> Rewards[Receive all your money<br>and your reward];
  Condition2 --No--> Collateral[Receive part of your money<br> and some other assets];
  Rewards --> End;
  Collateral --> End;

You first need to find some ventures that attracts your attention. You probably need to read their whitepaper and see if they have the potential for making any profit, if they provide acceptable interest, and if they provide any collateral to reduce your risk.
Once you find a good venture, you need to invest your money in it and wait to see if it gets funded before the deadline. If it's not, you will get back your money.
If the project is funded, you may receive some interest in regular periods (each month, for example).
While the venture is active, you may notice that it is not what it meant to be. It may underperform, for example, or you may just lose your interest in the venture for no reason. No matter the reason, you may decide not to risk on it anymore. As a result, you may want to get part or all of your money back. Please consider that in some ventures, you can only unstake your money in special periods of venture lifetime (in the first 3 months, for example). In later versions, you may be asked to pay some penalty for unstaking too. Another thing to spot is that, you probably cannot unstake all your money in most of the projects, based on the venture risk. If the risk is 30%, for example, then you only can unstake 70% of your investments and the other 30% are locked until the end of project lifetime. You need to select your venture carefully based on all these metrics in the first step.
At the end of venture lifetime, two things may happen: Either the venture is successful, returning all the risked money of investors and some probable additional rewards. In this case, you get all your money back and a portion of the additional rewards based on how much you invested in the venture.
If, on the other hand, the project is not successful, you will get all your money that is not part of the risk. The risked portion, however, is not available anymore and you have lost it. The venture, however, may provide some collateral to be given to investors, compensating part of your loss. It even may be so valuable that be larger than your risked money.

It's obvious that you - as the investor - are responsible for considering all these metrics together and decide what is the best action in any phase of the lifetime of a venture.

ErgoWell: Venture's point of view

Suppose you are the owner of a venture called AwesomeDAO. You want to raise money (say in SigmaUSD, for example), grow the DAO to make profit and return a part of that profit to the investors. In ErgoWell, your AwesomeDAO will have a lifecycle like this:

graph LR;
  Start{{Start}} --> PendingProject;
  PendingProject --> Condition1{Project funded<br>before deadline?}
  Condition1 --Yes--> FundedProject;
  Condition1 --No--> End{{End}};
  FundedProject --> Condition2{Venture made<br>any profit?}
  Condition2 --Yes--> ProfitableProject;
  Condition2 --No--> End;
  ProfitableProject --> End;

You first get a license from ErgoWell service (in the form of a NFT). This license indicates that AwesomeDAO is legitimate and it is safe for investors to put their money in it. In addition:

You need to pay some ERGs which will be used to pay fees of the on-chain transactions.
You may provide some interest money which is payed to investors periodically.
You may provide a collateral, so that you guarantee if AwesomeDAO is failed, the investors get back some of the collateral, hence reducing their risk.
You need to set some configurations for AwesomeDAO. For example, how much fund do you need, when is the deadline of your funding, how long is your project life time if funded successfully, etc.

You need to wait and see if enough fund is raised before the deadline you set. In this phase, investors provide some money in the form you need (which is SigmaUSD for our example) and get some special token in return.
If the fund is not raised before the deadline, all the money, either investors' or yours (as venture owner) is returned and the license is redeemed back to ErgoWell.
If the fund is raised, a portion of the fund is given to AwesomeDAO and the remaining part is locked until the end of the venture lifetime.
While AwesomeDAO is active, the investors receive some interest if you provided some money for paying interests in the first step.
When the AwesomeDAO lifetime is ended, it may or may not be profitable. If profitable, you can provide a portion of the profit to investors as a reward. If the project is not profitable, the portion of money that was locked is distributed back to investors. In addition, if you provided some collateral in the first step, it is distributed, too. After the distribution, the license is redeemed.

Tokens

ErgoWell has the following set of well-defined tokens:

ErgoWellTrademarkNFT: This is a NFT to make the box uniquely accessible and valid in all the blockchain.
LicenseNFT: This NFT is used to mark a venture as legitimate.

In addition, we use the following special token names:

Koin: A specific token which is used as base staking currency.
Stakoin (/steɪkɔɪn/, like "stay coin"): A token which has the same theoretical value as a Koin token. It is an indicator showing that someone has staked in a specific venture.
InterestToken: A token used as base currency for paying interests.

Boxes

Note: You can skip this section if you are not interested in technical details of ErgoWell.

ProjectFactory

This box is used to provide and redeem licenses. It also contains some data about the service.

Token	Count
ErgoWellTrademarkNFT	`1`
LicenseNFT	`n` (total number of possible projects)

Register	Type	Content
R4	`Coll[Byte]`	`serviceAddress`

R5	`Int`	`serviceFee` (percent)

TokenlessPendingProject

This is a temporary box which will be merged with StakoinBank.

Token	Count	Usage
LicenseNFT	`1`	-
InterestToken	`m`	-

Register	Type	Content
R4(0)	`Coll[Byte]`	`koinTokenId`
R4(1)	`Coll[Byte]`	`stakoinTokenId`
R4(2)	`Coll[Byte]`	`ventureAddress`
R4(3)	`Coll[Byte]`	`serviceAddress`

R5(0)	`Int`	`fundingDeadline` (height)
R5(1)	`Int`	`distributionInterval` (blocks)
R5(2)	`Int`	`lifetime` (blocks)
R5(3)	`Int`	`risk` (percent)
R5(4)	`Int`	`serviceFee`
R5(5)	`Int`	`profitFillingDeadline` (height)
R5(6)	`Int`	`allowedUnstakingMinHeight`
R5(7)	`Int`	`allowedUnstakingMaxHeight`

R6	`Long`	`hitThreshold` (in Stakoins)

StakoinBank

This is a temporary box which will be merged with TokenlessPendingProject.

Token	Count
Stakoin	`aLargeEnoughNumber`

Register	Type	Content
R4	`Coll[Byte]`	`licenseNFTId`

Collateral

This box is used as a guarantee for investors and a way of reducing investors risk. It will be distributed to investors in case of a failed project. Please note that this box can contain anything: ERGs, NFTs, etc.

Token	Count
Stakoin	`1`

PendingProject

This is a box containing all the funds before the project deadline. It may or may not hit the funding threshold before the funding deadline.

Token	Count
LicenseNFT	`1`
InterestToken	`x`
Koin	initially `0`
Stakoin	`aLargeEnoughNumber`

Register	Type	Content
R4(0)	`Coll[Byte]`	`koinTokenId`
R4(1)	`Coll[Byte]`	`ventureAddress`
R4(2)	`Coll[Byte]`	`serviceAddress`

R5(0)	`Int`	`fundingDeadline`
R5(1)	`Int`	`distributionInterval`
R5(2)	`Int`	`lifetime`
R5(3)	`Int`	`risk`
R5(4)	`Int`	`serviceFee`
R5(5)	`Int`	`profitFillingDeadline`
R5(6)	`Int`	`allowedUnstakingMinHeight`
R5(7)	`Int`	`allowedUnstakingMaxHeight`

R6(0)	`Long`	`lockedKoinsCount`
R6(1)	`Long`	`hitThreshold`

FundedProject

If a PendingProject is funded, this box gets created with most of the contents of PendingProject box.

Token	Count
LicenseNFT	`1`
Koin	initially `hitThreshold + 1 - venture fund`
Stakoin	`totalPeriodsNumber`
InterestToken	initially `aLargeEnoughNumber - serviceFee` (still large enough)

Register	Type	Content
R4	`Coll[Byte]`	`ventureAddress`

R5(0)	`Int`	`distributionInterval`
R5(1)	`Int`	`lifetime`
R5(2)	`Int`	`risk`
R5(3)	`Int`	`lastPaymentPeriodNumber`
R5(4)	`Int`	`profitFillingDeadline`
R5(5)	`Int`	`allowedUnstakingMinHeight`
R5(6)	`Int`	`allowedUnstakingMaxHeight`

R6(0)	`Long`	`hitThreshold`
R6(1)	`Long`	`lockedKoinsCount`

PeriodInterestBank

In each period, one of this box is created and is used to distribute interest to investors.

Token	Count
InterestToken	`m`
Stakoin	`1`

Register	Type	Content
R4	`Int`	`currentPaymentPeriodNumber`

ProfitableProject

When the project ends, this box is created from FundedProject. It may contain some profit for investors, but not necessarily.

Token	Count
LicenseNFT	`1`
Koin	initially `hitThreshold + 1 - venture fund`
Stakoin	`totalPeriodsNumber`

Register	Type	Content
R4	`Coll[Byte]`	`ventureAddress`

R5(0)	`Int`	`risk`
R5(1)	`Int`	`lastPaymentPeriodNumber`
R5(2)	`Int`	`profitFillingDeadline`

R6(0)	`Long`	`hitThreshold`
R6(1)	`Long`	`lockedKoinsCount`

R7	`Short`	`isVentureSuccessful`

Payment

This indicates any type of payment (ERGs or tokens).

Ticket

When someone invests in the venture, he/she gets back a ticket indicating the investment of some money.

Token	Count
Stakoin	`x`

Register	Type	Content
R4	`Coll[Byte]`	`ownerPublicKey`
R5	`Int`	`lastPaymentPeriodNumber`

Transactions diagrams

Note: You can skip this section if you are not interested in technical details of ErgoWell.

Project creation

graph LR;
  ProjectFactory1 --> Tx1((Creation));
  InterestPayment --> Tx1;
  5FeesPayment --> Tx1;
  Tx1 --> ProjectFactory2;
  Tx1 --> TokenlessPendingProject;
  Tx1 --> StakoinBank;
  TokenlessPendingProject --> Tx2((Merging));
  StakoinBank --> Tx2;
  Tx2 --> PendingProject
  Tx2 --> Collateral;

Changes:

ProjectFactory: One of the licenses is used.

You may wonder why we don't create PendingProject box as a result of Creation transaction. When StakoinBank is created, it's registers are full and we cannot use them, but we need to keep some configurations for the project. So we cannot create PendingProject in one step, as we don't have enough empty registers.

Collateral charging

graph LR;
  Collateral1 --> Tx((Charging));
  Payment --> Tx;
  Tx --> Collateral2;

Changes:

Collateral: Some NFTs, ERGs, etc. are added to the box.

Note that this box can be charged any time in the lifetime of the venture, not only when it is created. For example, a venture may provide no collateral at first, but provide some later to answer an impulsive unstaking done by investors. Also consider that charging of collateral cannot be undone.

Crowdfunding

graph LR;
  PendingProject1 --> Tx((Crowdfunding));
  Payment --> Tx;
  Tx --> PendingProject2;
  Tx --> Ticket;

Changes:

PendingProject: Some Koins are traded for the same number of Stakoins;

Project owner refunding

graph LR;
  PendingProject1 --> Tx((Refunding));
  Collateral --> Tx;
  Tx --> PendingProject2;
  Tx --> InterestPayment;
  Tx --> CollateralPayment;

Changes:

PendingProject: Interest bank is removed from the box.

Stakeholder refunding

graph LR;
  PendingProject1 --> Tx((Refunding));
  Ticket --> Tx;
  Tx --> PendingProject2;
  Tx --> Payment;

Changes:

PendingProject: Some Stakoins are traded for the same number of Koins.

Venture fund unlocking

graph LR;
  PendingProject --> Tx((Fund unlocking));
  Tx --> FundedProject;
  Tx --> VenturePayment;
  Tx --> ServiceTicket;

In this step, a part of the fund is given to venture based on the risk configuration. In addition, a part of Stakoins is given to the ErgoWell service for free, as fee. These Stakoins cannot be unstaked and are only used to receive interests and final rewards.

Unstaking

graph LR;
  FundedProject1 --> Tx((Unstaking));
  Ticket1 --> Tx;
  Tx --> FundedProject2;
  Tx --> Ticket2;
  Tx --> Payment;

Changes:

FundedProject: Some Stakoins are traded for the same number of Koins.

Ticket charging

graph LR;
  Ticket1 --> Tx((Charging));
  Payment --> Tx;
  Tx --> Ticket2;

Changes:

Ticket: The ERG value of box is increased.

Every ticket is charged when someone stakes Koins and receives the ticket. This charge is used to pay fees of the transactions. If the charge is emptied (e.g. as a result of too many unstaking transactions) it should be charged again so that this ticket can be used in new transactions.

Interest distribution

graph LR;
  FundedProject1 --> Tx1((BankCreation));
  Tx1 --> FundedProject2;
  Tx1 --> PeriodInterestBank1;
  PeriodInterestBank1 --> Tx2((Distribution));
  Ticket1 --> Tx2;
  Tx2 --> PeriodInterestBank2;
  Tx2 --> Ticket2;
  Tx2 --> Payment;

Changes:

FundedProject: A share equal to the total payment of a period is removed from total interest.
PeriodInterestBank: In each cycle, the payment of a specific ticket is removed.
Ticket: lastPaymentPeriodNumber is increased by one.

Profit box creation and filling

graph LR;
  FundedProject --> Tx1((Creation));
  Tx1 --> ProfitableProject1;
  ProfitableProject1 --> Tx2((Filling));
  Payment --> Tx2;
  Tx2 --> ProfitableProject2;

Changes:

ProfitableProject: The profit is injected to the box. In addition, isVentureSuccessful may be changed to true.

Final repayment

graph LR;
  ProfitableProject1 --> Tx((Profit payment));
  Ticket --> Tx;
  Tx --> ProfitableProject2;
  Tx --> Payment;

Changes:

ProfitableProject: The profit of a specific ticket is removed.

Collateral refunding (in case of a successful venture)

graph LR;
  Collateral --> Tx((Refunding));
  ProfitableProject>ProfitableProject] --> Tx;
  Tx --> CollateralPayment;

Please note that ProfitableProject is used as data input in this transaction.

Collateral unlocking (in case of a failed venture)

graph LR;
  Collateral --> Tx((Refunding));
  ProfitableProject>ProfitableProject] --> Tx;
  Tx --> ServicePayment;

Please note that ProfitableProject is used as data input in this transaction.

As you can see, in case of a failed venture, the collateral is sent to ErgeWell service address and then distributed by ErgoWell manually.

Project redeeming

graph LR;
  ProjectFactory1 --> Tx((Redeeming));
  PendingProject --> Tx;
  Tx --> ProjectFactory2;

graph LR;
  ProjectFactory1 --> Tx((Redeeming));
  ProfitableProject --> Tx;
  Tx --> ProjectFactory2;

Changes:

ProjectFactory: One of the licenses is redeemed.

Fees

Note: You can skip this section if you are not interested in technical details of ErgoWell.

The fees of the transactions are either payed by venture or investors. The following table shows who pays the fees:

Transaction	Payer
Project creation	Venture
Crowdfunding	Investor
Project owner refunding	Venture
Stakeholder refunding	Investor
Venture fund unlocking	Venture
Ticket charging	Investor
Unstaking	Investor
Interest distribution	Investor
Profit box creation and filling	Venture
Final repayment	Investor
Project redeeming	Venture

Venture fees are saved and flowed through TokenlessPendingProject, PendingProject, FundedProject and ProfitProject boxes. Investors fees are saved in Ticket box and can be charged if needed.

TODO

Provide multiple types of tokens as interest
Add the option to receive some penalty for unstaking

Name		Name	Last commit message	Last commit date
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src		src
.gitignore		.gitignore
.prettierrc		.prettierrc
README.md		README.md
index.ts		index.ts
package-lock.json		package-lock.json
package.json		package.json
tsconfig.json		tsconfig.json

mhssamadani/ErgoWell

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ErgoWell

Idioms used

Venture/Project

Investment/Staking/Locking

Interest

Collateral

Reward/Profit

Risk

ErgoWell: Investor's point of view

ErgoWell: Venture's point of view

Tokens

Boxes

ProjectFactory

TokenlessPendingProject

StakoinBank

Collateral

PendingProject

FundedProject

PeriodInterestBank

ProfitableProject

Payment

Ticket

Transactions diagrams

Project creation

Collateral charging

Crowdfunding

Project owner refunding

Stakeholder refunding

Venture fund unlocking

Unstaking

Ticket charging

Interest distribution

Profit box creation and filling

Final repayment

Collateral refunding (in case of a successful venture)

Collateral unlocking (in case of a failed venture)

Project redeeming

Fees

TODO

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