Giddy Token Litepaper
The Giddy team is developing Giddy Token and an accompanying standard for communication between smart contracts that aims to improve transactional safety and ease of use. Giddy Token is being designed with the intention of improving security and efficiency of transactions on the blockchain in three major ways. We aim to:
- Address the infinite approval vulnerability ubiquitous to DeFi investing
- Address smart contract approval front running vulnerability
- Increase ease of use by allowing gas to be paid in any token
The Giddy team’s ultimate goal is to help move the needle on mainstream adoption by removing friction and seamlessly increasing safety in ways that are transparent to new DeFi users.
As always, do your own research. Giddy does not guarantee any economic benefit from purchasing or trading our token nor does it guarantee the efficacy of our attempts to solve blockchain security, speed, and cost problems. Investing in cryptocurrencies carries additional risk beyond traditional financial markets due to the ever evolving nature of the underlying technology, and you could lose your entire investment. Nothing in this document is to be construed as financial advice.
This document is not a prospectus. This document does not contain investment advice nor does it constitute a prospectus of any form. No solicitation for investment is contained herein, and anything said regarding tokens, trading, economics, or technology cannot and should not be considered financial advice or solicitation. Giddy Token should be viewed solely as a utility for increasing security and ease of use on the blockchain, meaning that the value of Giddy Token will be determined by its usefulness as a utility for increasing security and ease of use. Therefore, this paper does not constitute offering of securities in any jurisdiction worldwide. Instead, this document pertains to technical descriptions of the functionality of the Giddy Token and the development and distribution of Giddy Token and related products.
This document is not a complete, definitive, or final technical specification nor does it imply a final technical specification of Giddy Token exists. Information presented on this paper, technical or otherwise, is meant to outline the broader design and use-case of Giddy Token, its implementation, design, and use-cases, all of which are subject to change without notice. For the latest information about Giddy Token, visit the website: https://giddy.co/
DeFi is currently too difficult to access for the vast majority of novice-to-intermediate retail investors. Although interest in crypto and talk of DeFi are at all-time highs, the relative market cap of DeFi to the rest of crypto remains low. At the time of writing, DeFi makes up 6.6% of all crypto where DeFi has a total market capitalization of $133B and crypto has a market cap of $2T.
Currently DeFi users need know how to execute each of the following steps in order to successfully invest:
- Purchase crypto. Most users make a relationship with a centralized exchange and then withdraw that crypto to another blockchain. Depending on the destination block chain, users need to use a specific exchange, such as Binance, in order to purchase and withdraw cryptocurrencies.
- Create and secure a non-custodial wallet. Currently MetaMask is the de facto crypto wallet for most DeFi users. These wallets have a single point of failure, a private key which, if ever lost or stolen, will compromise all the funds in the wallet. Upon creating an account, users must secure their seed phrase which is used to reconstruct the private key in order to prevent loss or theft.
- Depending on the DeFi blockchain being used, users must convert the crypto purchased from a centralized exchange into the native token of the destination blockchain. While tooling for this is getting better, it can still be cumbersome to move funds to Binance Smart Chain, Polygon, Avalanche, or Solana.
- Users must remember to keep a balance of the native token of a given blockchain in their wallet in order to pay for transaction fees. If the full amount of native token is ever used up, users must go through the previous steps of getting more token onto the blockchain before they can retrieve their funds.
- Users must find DeFi protocols and vet the opportunity before committing capital. This involves understanding the fundamentals of the business, which are different in many ways from traditional businesses, and also assessing the security of the protocol by judging the quality of their code. Most people are not able to read DeFi source code, so this is out of reach for the average user.
- Getting staked into a smart contract usually takes multiple steps which often are not intuitive to users. In many cases these smart contracts will need to migrate, causing additional problems for staked users who are not familiar with the more technical processes involved in dealing with smart contracts.
- Infinite approval is a serious security flaw. Staking into a smart contract is a two-step process: the contract must be approved first and then staked. Approving a smart contract means allowing the contract, the “other” party, to spend as much money as they choose from your wallet with a very high limit. This process is ubiquitous in DeFi and has led to lost funds from bad actors who take advantage of this gap in the process.
- DeFi trades are vulnerable to frontrunning. Before a transaction is written to the ledger permanently, it goes to a temporary holding area to allow the blockchain verifiers to certify that the transaction is correct. This is known as a mempool and is accessible in many cases to people who can view transactions and arbitrage trades for profit. This causes many DeFi users to pay higher fees than they expected when they initiated the transaction.
- A specific type of front-running involves exploiting previously approved contracts to remove additional funds from a user’s wallet by transferring funds for the previously approved amount in addition to the newly approved amount. This is a combination of the problems with approvals that don’t expire and front running as a whole.
- Keeping track of your DeFi positions and their performance is difficult. While there are some tools to help aggregate DeFi positions into a single dashboard, there are many DeFi protocols that don’t get picked up by these dashboard aggregators, which means DeFi users need to manually track what they’ve invested into and how it’s performing.
- Getting money back out from DeFi staking is nearly as complicated as getting it into DeFi protocols. Reversing the above steps has its own risks, and sending money to a wrong address can cause funds to become permanently unrecoverable.
- After all of these steps are completed, it’s still very difficult to track your own cost basis and calculate your tax obligations. There are solutions coming online in recent months, but understanding how each protocol works and what can be considered taxable events is still quite difficult for most people.
On the topic of frontrunning vulnerability, there is a long-standing issue with ERC-20 based contracts described in Smart Contract Weakness Classification (SWC) 114 (https://swcregistry.io/docs/SWC-114). A bad actor who has access to pending transactions can exploit a race condition to remove additional funds from an unsuspecting user’s wallet. If a user has an open approval for a smart contract and submits a new transaction, it is possible to detect the change in approval and submit a new transaction that causes crypto to be withdrawn in the amount of both the old and new approval. By submitting a request to transfer funds for the old approval amount and paying a higher gas fee, the attacker is able to transfer money out of that account twice, resulting in lost funds to the originating user. Almost everybody today who uses DeFi is vulnerable to contract approval attacks, but few users are aware of how to mitigate this issue.
Accessing DeFi in its current state with the currently-available set of tools is a nearly insurmountable task for the majority of retail investors. While there is room for improvement in most of the above processes, the Giddy Token will focus on addressing three of the most common issues and seeks to solve them by advancing the underlying technology.
Giddy Token focuses on solving three points in the above via built-in, transparent improvements to the token. Giddy Token will address the following pain points:
- Native gas token requirement. Using the Giddy Token standard will allow DeFi users to pay for gas with any token they have in their wallet.
- Infinite approval vulnerability. The Giddy Token protocol will allow users to invest into a DeFi offering without having to complete a separate, infinite approval transaction. Instead, users will be able to stake directly into a Giddy-compatible DeFi protocol with a single transaction. Built into that transaction is an approval for the exact token amount, and that approval will expire after the next block completes. This also addresses the approval race condition weakness SWC-114 describes above.
- Remove standalone contract approval transactions. One of the reasons that various solutions to contract approval vulnerabilities have not been widely adopted is that they require too much attention from users and, at scale, become unmanageable. Giddy Token aims to not only address contract approval vulnerabilities but also reduce the number of steps required in order to help with mainstream adoption. Giddy Token removes contract approval weaknesses and also removes the standalone contract approval transaction in one step.
While there are other problems users will face in their efforts to interact with DeFi offerings, the Giddy Token seeks to address these problems first as they are transparent to most users and expose the largest number of unwitting DeFi account holders to harm. Our approach seeks to promote widespread adoption by the broader community so that these vulnerabilities no longer exist for the entire market.
The Giddy Token is first and foremost a utility for increased security and ease of use for the blockchain and DeFi protocols. Therefore, the tokenomics of the Giddy Token are designed for simplicity to offer a straightforward way to adopt the technology on a broad scale, with the intention of promoting adoption of the token and protocol to reach the end goal of increasing security and ease of use for DeFi protocols and across blockchains globally.
DEX: SushiSwap on Polygon
Total Mint: 1,000,000,000
Fixed Supply: Yes
DEX sales tax: No
Token Reflection: No
Public ICO: No
Launch: Staked streaming
Distribution of Giddy Token:
- Market Allocation: 60%
- 570,000,000 total tokens will be streamed to stakers over a 12 month period via Giddy’s staking smart contract
- 30,000,000 total tokens will be used to seed the SushiSwap liquidity pool to enable Giddy token DEX trading
- Giddy Adoption 20%
- 200,000,000 total tokens
- New smart contract innovations and staking initiatives
- Fund the bug bounty and community pull request programs
- Will set aside 5% for growth initiatives and marketing
- Giddy Allocations 20%
- 200,000,000 total tokens
- 12% Giddy dev wallet (future operating capital)
- 5% company allocations (air drops to current and future employees)
- 3% marketing (collabs, referrals, lead gen, etc)
The Problems With Launching a Token
There are a number of ways to launch a new token with varied and complex incentives, risks, benefits, and drawbacks to both the token developer and prospective token holders. The following is not an exhaustive list, but demonstrates some common strategies with their pros and cons.
Private Sale – A developer may choose to set a price for their token and sell it directly to a limited number of buyers prior to launch, then add most of the sale proceeds to a DEX to seed liquidity while keeping a portion for operating capital.
- Developer can raise non-dilutive capital
- Private sale participants get equal distribution
- Token may launch with a large amount of trading liquidity
- Limited number of participants
- U.S Securities Laws implications
- Larger wallet size often benefit more
- Private sale participants are incentivized to “dump”, or immediately liquidate, a portion of their holdings as soon as new liquidity becomes available
Fair Launch – A developer may choose to seed a DEX with a trading pair made up of a highly liquid token and their newly minted token, providing all prospective token holders with the opportunity to purchase the token at the same time, at the lowest price.
- Unlimited number of participants can get access to the token via DEX at the same time.
- Token adoption may reflect real market conditions faster than other launches
- Developer incentives aligned with market incentives
- Susceptible to bot/MEV/HFT manipulation
- Susceptible to “crypto whales”, or savvy crypto traders with large amounts of liquidity, who may purchase disproportionately large amounts of available tokens and thereby adversely influence natural market conditions
- The earliest adopters have an outsized benefit compared to mid-late term project adopters. Early adopter benefit may come at the detriment of mid-late adopters.
- Requires a substantial amount of seed liquidity to mitigate risks from trading bots and crypto whales
Liquidity Balancer Launch – A developer may choose to launch their token with a liquidity balancer, such as Copper, which programmatically releases the new token into the DEX over an arbitrary amount of time, providing a managed fair launch scenario.
- Mitigates bot traders and crypto whales by setting the initial price of the token arbitrarily, making their efforts to obtain disproportionately high liquidity futile
- Large number of participants, and aligns developer and market incentives.
- Relatively complex compared with a private sale and a fair launch. Prospective token holders must be aware of the mechanics of a liquidity balancer and actively manage their buy-in over the initial time window otherwise they will miss out
- When whales decide to participate in LBP launches it punishes regular uses more than other scenarios. Some LBP launches in the past have seen mass adoption of the token regardless of the amount of liquidity available, leaving whales to benefit from and control the market while other users are unable to enter the market in a meaningful way
The above is not an exhaustive list of token launch strategies, rather represents the main token launch plans that Giddy has considered. Each of the strategies above represent the major benefits and drawbacks of launching a new utility token, and informed our decision to launch the token with a staking contract described below.
Giddy Token Launch Strategy
In an effort to maintain benefits and reduce risks listed in the token launch strategies above, Giddy will be modifying a contract developed and used by recent DAOs to stream the Giddy token for free over a period of 12 months. Any user who stakes tokens into the Giddy contract during this period will receive Giddy tokens. No fees will be charged for participating in this launch. There is no fee to stake or un-stake tokens beyond the gas paid by the user to complete the transaction, and no fees, commissions, or any sort of payment will be taken from staked user funds during this period.
This Giddy contract will emit 570 million minted tokens over a 12 month period. The emitted, or streamed, GIDDY tokens will be given to anyone who stakes into the contract via a handful of high-liquidity tokens, such as MATIC, wETH, wBTC, and a few other tokens on the Polygon chain. Users can also stake GIDDY and a GIDDY-LP and receive streamed GIDDY tokens with the benefit of GIDDY and GIDDY-LP having a bonus rewards rate relative to other staked tokens. Users who stake tokens in exchange for GIDDY tokens will have the ability to harvest their GIDDY token any time they wish, which will transfer pending GIDDY token rewards into that staked user’s wallet. Users may also un-stake their staked tokens at any point and no penalty or fee will be assessed for doing so.
This Giddy contract will not do anything with the staked tokens except hold them and return them to the user whenever they wish to unstake. Giddy will not re-invest, transfer, add to liquidity, generate revenue, sell, liquidate, or in any other way transform a user’s staked tokens while held by the Giddy contract. The purpose of this contract is not to generate revenue in any way nor produce dividends of any kind for stakers; rather, it is a simple contract between stakers and the Giddy token which distributes new tokens to staked users for as long as they wish to participate over the 12 month token streaming period.
With this approach we aim to:
- Mitigate the downside of crypto whales and bots adversely affecting market conditions by providing a small amount of initial liquidity to the DEX and then streaming the remaining GIDDY tokens to stakers over a period of time.
- Eliminate the downsides of LBP launch by not forcing users to become experts in LBP mechanics and expertly administering their participation in the launch, instead staking tokens in a GIDDY contract for free and automatically receiving rewards proportional to their stake.
- Focus on the utility of the GIDDY token and its corresponding benefits rather than its price speculation by avoiding a limited private sale of the token and instead allowing the largest number of users possible the opportunity to receive GIDDY token for free over a 12 month period.
Our goal is to provide a positive token launch experience to as many people as possible while mitigating risks inherent in various token launch strategies. Ultimately we aim to facilitate adoption of the GIDDY token utilities and hope that this launch strategy will be efficacious to that end.
Further Token Distribution Notes
The majority of minted tokens will be streamed to individuals who stake assets into a Giddy smart contract over a 12 month period. 570M GIDDY tokens will be distributed at a constant rate for 12 months until the full amount of available tokens are completely distributed to stakers.
Since there are no arbitrary inflation mechanics, users who hold the token in their wallet may look forward to future benefits based on the utility of the token without having to experience loss of value due to the supply of the token being driven up arbitrarily by any token smart contract mechanics or tokenomics. In other words, the price of the Giddy token will be completely driven by market conditions, namely the usefulness of the utility of the Giddy token, while the Giddy developer team will have no means of arbitrarily minting or burning tokens to influence or control changes in price.
Giddy has six principal co-founders who have backgrounds in engineering, product, blockchain development, sales, and marketing. They are first and foremost a technical founding team but they also have the ability to develop and iterate quickly on delightful user experiences as well as market those products. These co-founders have worked together at some of the best tech companies in Utah and some of the largest companies in the world. Their ability to execute on good ideas quickly is unparalleled.
The team has built up a variety of marketing channels and has a growing following on social media, and deep contacts within the cryptocurrency industry. The team plans to leverage their current channels and network to bring not only crypto enthusiasts, but average retail investors into the Giddy Token domain. The team continues to build their marketing engine and staff, placing emphasis on education and approachable branding to build confidence in Giddy technology.
Unlike some token projects, Giddy Token aims for balance between marketing strategy and deep technology expertise. Solving major blockchain security flaws and increasing ease of use is only half of the job. Giddy Token will continue to develop a successful marketing engine and token holders can take confidence in the developer’s proven track record of delivering quality products on a regular basis.
What to expect in the future
For update regarding the the Giddy Token roadmap visit https://giddy.co/roadmap/
Here is a short summary:
- Giddy Token litepaper release
- Token launch on Polygon
- Distribute Giddy Token EIP for new communication standards
- Giddy DEX router
- Staking development and partnerships
- Giddy native mobile app for streamlined access to Giddy Token and staking
- Giddy chrome wallet for experienced users to access Giddy Token technology