Originally published: Oct 16, 2024

Demether is a protocol that unifies liquidity, enabling blockchain foundations to attract and retain liquidity at zero cost. We are on a mission to onboard the next billion into passive yields via a suite of yield-bearing tokens.

The protocol, supported by Animoca Ventures, Skyvision Capital, Formless Capital and 19 other partners, is scheduled to go live in the current quarter.

The first product to be launched by Demether will be a liquid restaking token, $demETH. The synthetic liquid restaking token $demETH is the building block on which the initial suite of DeFi opportunities will be based.

The Demether deep-dive series offers readers a close look at our progress and the principles that guide us as we head toward launch. This blog dives into Demether’s vision and how we plan to transform the DeFi landscape.

🌾 Introducing Demether: The Meta-Layer for Moving Capital.
🌾 Demether’s security practices.

DeFi has made impressive strides, but some key challenges remain. They are:

1) Attracting initial liquidity
Attracting the first wave of users and liquidity is often the hardest part for new blockchain foundations. Without substantial incentives, there are no reasons for users to join, making the blockchain foundations feel empty and inactive — a classic “ghost town” scenario. Early incentives like airdrops and token rewards can help overcome this initial hurdle but are often insufficient to build a sustainable community. They are also undeniably more expensive in the current, highly competitive environment.

2) Retaining users
In the DeFi space, attracting users is often only half the battle; retaining them is where many projects falter. Many users are initially drawn by attractive incentives, such as high yields or reward tokens. However, once those rewards taper off, the challenge of keeping users engaged becomes clearer. Without continuous incentives, the sense of urgency or value can diminish, prompting users to move their assets elsewhere in search of better returns.

3) Unstable incentives
While token-based incentives can attract initial users, they often become unsustainable, draining a project’s treasury and leading to diminishing rewards over time. As incentives decrease, users may leave, chasing better opportunities. Additionally, the complexity of navigating multiple protocols and managing wallet keys can overwhelm new users, deterring broader participation and limiting growth in the DeFi space.

Demether believes that the three problems stem from a common origin. The average user is looking for a solution that is intuitive, rewarding & sustainable — the three guiding attributes that all products built by Demether will have.

Demether shall release a suite of yield-bearing tokens that are designed to ensure that users benefit from a steady stream of incentives for staying within the ecosystem. The more they engage with the products in the ecosystem, the more rewards they receive. Our first product, $demETH, shall ensure amplified rewards for users just for minting it on a partner blockchain and holding week on week. Users can receive additional rewards by undertaking defi activities and/or staking their protocol token allocations back into their blockchain vault.

Future products will continue to build upon this model, ensuring strong rewards for the members.

Demether is leveraging a vote-based staking model. Under this, every blockchain shall have its own smart contract on its native chain to enable access to Demether’s governance mechanism. The quantum of rewards disbursed to a particular ecosystem will be in the ratio of the collateral lodged in its ecosystem vault as a fraction of the total collateral staked across all the vaults.

While blockchain foundations can seed the initial tokens to kick-start a campaign, the community is encouraged — and wholly incentivised — to participate in attracting more rewards to the chain by putting up their own collateral. This will have the flywheel effect of an ecosystem receiving more and more rewards over time.

This model not only puts the growth squarely in a community’s hands but also enables strong engagement among participants in all of the ecosystems Demether launches on.

Our conversations with multiple new entrants into web3 highlighted a unique problem — most solutions were too convoluted. The risk to return or the efforts to return ratios were just not justified.

Demether has set out to craft a host of mini-opportunities where participants could receive consistent rewards for comparatively lesser effort. $demETH keeps on accruing value after minting just once. Staking Demether protocol tokens or other collateral makes one eligible for revenue share. So more community engagement results in more rewards for all participants; it’s that simple.

We are confident that these rewarding and intuitive solutions will provide the smooth onboarding experience required to bring the next billion users onto Web 3. Demether’s vision is to build a sustainable, intuitive and rewarding future for the current & potential users by lowering the barriers of experience required.

With Demether, blockchains can effortlessly attract, retain, and sustain liquidity as well as users without falling into the trap of unsustainable incentives and community misalignment creating an ecosystem where both users and blockchains can truly flourish.

As we approach our mainnet launch, we remain committed to making passive yields accessible to the next billion users.

Join us on this journey and stay updated on our progress 👉 https://x.com/DemetherDeFi

Originally published: Oct 16, 2024

Demether is a protocol that unifies liquidity, enabling blockchain foundations to attract and retain liquidity at zero cost. We are on a mission to onboard the next billion into passive yields via a suite of yield-bearing tokens.

The protocol, supported by Animoca Ventures, Skyvision Capital, Formless Capital and 19 other partners, is scheduled to go live in the current quarter.

The first product to be launched by Demether will be a liquid restaking token, $demETH. The synthetic liquid restaking token $demETH is the building block on which the initial suite of DeFi opportunities will be based.

The Demether deep-dive series offers readers a close look at our progress and the principles that guide us as we head toward launch. This blog dives into Demether’s vision and how we plan to transform the DeFi landscape.

🌾 Introducing Demether: The Meta-Layer for Moving Capital.
🌾 Demether’s security practices.

DeFi has made impressive strides, but some key challenges remain. They are:

1) Attracting initial liquidity
Attracting the first wave of users and liquidity is often the hardest part for new blockchain foundations. Without substantial incentives, there are no reasons for users to join, making the blockchain foundations feel empty and inactive — a classic “ghost town” scenario. Early incentives like airdrops and token rewards can help overcome this initial hurdle but are often insufficient to build a sustainable community. They are also undeniably more expensive in the current, highly competitive environment.

2) Retaining users
In the DeFi space, attracting users is often only half the battle; retaining them is where many projects falter. Many users are initially drawn by attractive incentives, such as high yields or reward tokens. However, once those rewards taper off, the challenge of keeping users engaged becomes clearer. Without continuous incentives, the sense of urgency or value can diminish, prompting users to move their assets elsewhere in search of better returns.

3) Unstable incentives
While token-based incentives can attract initial users, they often become unsustainable, draining a project’s treasury and leading to diminishing rewards over time. As incentives decrease, users may leave, chasing better opportunities. Additionally, the complexity of navigating multiple protocols and managing wallet keys can overwhelm new users, deterring broader participation and limiting growth in the DeFi space.

Demether believes that the three problems stem from a common origin. The average user is looking for a solution that is intuitive, rewarding & sustainable — the three guiding attributes that all products built by Demether will have.

Demether shall release a suite of yield-bearing tokens that are designed to ensure that users benefit from a steady stream of incentives for staying within the ecosystem. The more they engage with the products in the ecosystem, the more rewards they receive. Our first product, $demETH, shall ensure amplified rewards for users just for minting it on a partner blockchain and holding week on week. Users can receive additional rewards by undertaking defi activities and/or staking their protocol token allocations back into their blockchain vault.

Future products will continue to build upon this model, ensuring strong rewards for the members.

Demether is leveraging a vote-based staking model. Under this, every blockchain shall have its own smart contract on its native chain to enable access to Demether’s governance mechanism. The quantum of rewards disbursed to a particular ecosystem will be in the ratio of the collateral lodged in its ecosystem vault as a fraction of the total collateral staked across all the vaults.

While blockchain foundations can seed the initial tokens to kick-start a campaign, the community is encouraged — and wholly incentivised — to participate in attracting more rewards to the chain by putting up their own collateral. This will have the flywheel effect of an ecosystem receiving more and more rewards over time.

This model not only puts the growth squarely in a community’s hands but also enables strong engagement among participants in all of the ecosystems Demether launches on.

Our conversations with multiple new entrants into web3 highlighted a unique problem — most solutions were too convoluted. The risk to return or the efforts to return ratios were just not justified.

Demether has set out to craft a host of mini-opportunities where participants could receive consistent rewards for comparatively lesser effort. $demETH keeps on accruing value after minting just once. Staking Demether protocol tokens or other collateral makes one eligible for revenue share. So more community engagement results in more rewards for all participants; it’s that simple.

We are confident that these rewarding and intuitive solutions will provide the smooth onboarding experience required to bring the next billion users onto Web 3. Demether’s vision is to build a sustainable, intuitive and rewarding future for the current & potential users by lowering the barriers of experience required.

With Demether, blockchains can effortlessly attract, retain, and sustain liquidity as well as users without falling into the trap of unsustainable incentives and community misalignment creating an ecosystem where both users and blockchains can truly flourish.

As we approach our mainnet launch, we remain committed to making passive yields accessible to the next billion users.

Join us on this journey and stay updated on our progress 👉 https://x.com/DemetherDeFi