The Persia’s Game Theory

Ø Stake

Ø Bond

Ø Sell

How does staking works?

By using our platform, you are able to stack your Persia and receive sPersia (stacked Persia) in return. Keep in mind that 1 Persia will always be equal to 1 sPersia, the tokens can be unstaked at any time, there is no lock-up period. The incentive to stake your Persia tokens is to receive dividends every 8 hours. Very simple and intuitive, it only takes a few clicks to stake your Persia and start earning passive income. It is important to note that staking can be used a passive, long-term strategy. With your Persia token stake increasing over time, it basically slowly reduce your purchase price, for instance, if the market price of Persia is inferior to the price at which you bought your tokens, by staking your tokens long enough in our protocol, the increase of your sPersia balance will outpace the fall in price at some point.

How does bonding works?

Bonding allows you to buy Persia at a lower cost basis. In return for selling your asset-pair (LP), the protocol will sell you Persia at a discount. The idea here is that bonds will give you some amount more Persia than you would have received if you had bought on the market and then staked. The amount of “how much more” will be determined by how many bonds there are already available.

As opposed to staking, bonding is more an active, short-term strategy. The bonding market can be seen as a parallel market to Persia, more unpredictable and risky. Therefore bonding require users to manage their investment actively and monitor the bonding rates constantly in order to be as more profitable as someone using staking.

With Persia, the process of purchasing bonds has been simplified to a one-step process. Instead of having to purchase the LP tokens then trading them for Bonds, users only need to have the asset-pair (BUSD/FRAX+ Persia) in their wallet to purchase the bonds directly.

Bonds are vested for 5 days and are paid out per block height. For example, if you were to purchase a bond, after the first day you would have received 20% of the vested amount, then 40% after the second day.. until 100%.

Whether you should hold Persia, bonds, or sell Persia.???

At a high level, Persia consists of its protocol managed treasury, protocol owned liquidity , bond mechanism, and staking rewards that are designed to control supply expansion.

Bond sales generate profit for the protocol, and the treasury uses the profit to mint persia and distribute them to stakers. With liquidity bonds, the protocol is able to accumulate its own liquidity. Check out the entry below on the importance of Protocol owned Liqidity.

(3,3) and (1,1) Dilemma

The number pairs in the figure above are a way for the community to explain this, and how beneficial or harmful each behavior of the participants in the system is to themselves and the agreement.

(3,3) is the idea that, if everyone cooperated in PersiaDao, it would generate the greatest gain for everyone (from a game theory standpoint). Currently, there are three actions a user can take: Staking (+2)Bonding (+1)Selling (-2)Staking and bonding are considered beneficial to the protocol, while selling is considered detrimental. Staking and selling will also cause a price move, while bonding does not (we consider buying Persia from the market as a prerequisite of staking, thus causing a price move). If both actions are beneficial, the actor who moves price also gets half of the benefit (+1). If both actions are contradictory, the bad actor who moves price gets half of the benefit (+1), while the good actor who moves price gets half of the downside (-1). If both actions are detrimental, which implies both actors are selling, they both get half of the downside (-1).

Thus, given two actors, all scenarios of what they could do and the effect on the protocol are shown here:

If we both stake (3, 3), it is the best thing for both of us and the protocol (3 + 3 = 6).If one of us stakes and the other one bonds, it is also great because staking takes Persia off the market and put it into the protocol, while bonding provides liquidity and BUSD/FRAX for the treasury (3 + 1 = 4).When one of us sells, it diminishes effort of the other one who stakes or bonds (1–1 = 0).When we both sell, it creates the worst outcome for both of us and the protocol (-3–3 = -6).