Eric: Let's start our AMA with @archerdao, I hope everyone researched this fascinating project.
Caleb Sheridan: Hello 😊
Eric: Glad to have you here. to kick things off. We would like to know more about and how you ended being a founder of a crypto startup
Caleb Sheridan: Thanks for having me and the great questions from this community. My background is in online poker, where I played professionally and then worked at PokerStars for almost 10 years. I fell into the rabbit hole of Bitcoin and later Ethereum in 2017–2018. During this time, I co-founded a service company specializing in blockchain analytics and worked on many great projects in DeFi. This ultimately led to seeing the opportunity for Archer
Eric: Interesting background
so tell us, what is ArcherDAO?
Caleb Sheridan: Archer is a network that is live today on Ethereum. This network focuses on extracting more value per block for miners by interacting with the application layer. This is an innovative way to increase revenue for miners because it’s software-driven and has nothing to do with the usual hardware tweaks.
Archer DAO is the governance of that system. It’s important to incentivize users to participate in the network. Our way of doing that is with a DAO, where the users who do productive work in the network get to own it.
Eric: Can you tell us more about the genesis of this idea, Its a bit technical so any background would be most illuminating for others
I think this is a background on the problem but if you are able to ELI5 it to us, that would be great
Caleb Sheridan: The background is that defi platforms (dexes and lending) lead to certain transactions that are really profitable! Arbitrage and liquidations are the most well-known, but there are many other types of opportunities. Usually, people do work to discover the opportunities, then race to get these transactions in. However, in the end, miners can always execute these opportunities first because they ultimately control the order of transactions in a block.
In this case, a new breed of bot (the authors of the dark forest article call them “generalized front-running bot”) has started to take these profitable transactions for themselves. In a lot of cases, that leads the workers to stop participating in arbitrage and liquidations which is bad for the network. In this case, the value can instead go to miners who will always beat this breed of bot
So, miners can realize the full value of on-chain incentives and keep these incentive mechanisms functioning. That’s a powerful realignment for defi networks, which Archer helps with
Eric: Fixing a big problem for AMMs
so how does a miner use ArcherDAO?
Caleb Sheridan: We’ve been working on this system for some time to make the integration really simple. Miners copy and paste one line of code when they start up their node and the rest is handled. It just takes a few minutes
Eric: So with ArcherDAO, how do miners benefit? do they have a bidding platform for people to process their txns faster?
Caleb Sheridan: The normal gas auctions are generally effective and good for miners, so we don’t want to change what works. Rather, we use elite suppliers to go after profitable opportunities where miners can earn more by including these transactions in their blocks. In exchange, the miners split the extra revenue with the supplier.
Eric: Interesting. What is the status of the project? How is the adoption across miners?
Caleb Sheridan: Our adoption is around 2.5% of the hash rate, which is a reasonable chunk. Since taking the project out of stealth, we are getting inbound requests for integrations. Of course, our immediate goal is to raise this figure to make the network stronger 😁 This is where the ARCH token and governance system helps provide more incentive
Eric: So in essence, Archderdao is focused on miners and elite suppliers. It's not open to being used by anyone. correct?
After the next reply, we will move on to community questions. AMARoomers please prepare your claimed questions
Caleb: Those sides of the network are very much for specialists — miners and expert suppliers. Liquidity Providers are another part of the system that will be incentivized. Today, we act as the only LP but expect to open that up with more assets. We go into more depth about that role in this article: https://medium.com/archer-dao/archer-network-overview-b0ae4d7d1895
Q: How can Community participate in Archer Dao? As a miner? Validator? Please explain. Also, what is the importance of a community for Archer Dao?
A: Miners, Suppliers, and Liquidity Providers are the three key participants today. We can see how other stakeholders on the network might want to also use or have a voice in the system. For example, if a DeFi platform is struggling with its incentive system, that’s something Archer can help with. For this reason, we chose to run the system as a DAO and ensure a broad group of users can participate in decision making.
Q: As we know that Mining operations carry risk because revenue is variable and forecasting is an exercise in uncertainty. Could you tell us how Archer aims to give miners more certainty with its solutions?
A: We’re working very hard on improving miner revenue through a variety of techniques. Miners today receive block rewards and transaction fees. Block rewards are subject to unexpected decreases and transaction fees are variable. By adding in rewards from DeFi incentives, we give miners a new revenue source for their blocks.
Q: Since LPs improve Archer DAO Profitability, any plans to launch an incentivized liquidity program? Why allocate 50% of ARCH token supply for DAO participation? What’s the basis for 50% selection?
A: 1/ The DAO will help determine if Suppliers need more liquidity to carry out their trades/opportunities and how to incentivize it.
2/ Network participants make the network function. Without miners, suppliers, and liquidity providers, we do not have a network. In the interest of growing the network, we allocated 50% of the tokens for the DAO to choose how to best bootstrap the network. Initially, the team and early investors will have voting power. Over time, that balance will shift to network participants.
Q: I have checked your website and some info on Twitter. But what I wonder is why you didn’t specifically list all the information on the site. Can you provide some information such as a roadmap, whitepaper, or any other important information related to your project? I want you to answer more details on your project.
A: We took the system to the market instead of writing a white paper. We did not know it would work, we did not know if we could get miners interested. What we have learned from running the system these past months is that there are many levers to pull and considerations for what to work on next. After our token launch, we will open the private communities to discuss the roadmap.
Q: What is the function of VotingPower and VotingPowerPrism? How are they different?
A: Great technical question!
- Voting Power = how much weight your votes carry.
- Voting Prism = determines what counts towards voting power.
So, a lot of DAOs today are quite inflexible. They might require staking one type of token to have voting power. We have a lot more flexibility. For example, we count vesting tokens towards voting power and staked ARCH tokens. In the future, we could even include LP and other tokens, if the DAO thinks that’s a good idea.
Q: Can you share with us the team vesting and unlocking schedule for ARCH tokens? What is the structure of Archer DAO Governance? Who can be a part? What factors determined how Voting Power is shared?
A: For token metrics, see https://medium.com/archer-dao/arch-token-report-151288371304
Q: Recent study shows that Ethereum miners make an average 11,500 ETH per day in block rewards. So do you really think there’s a need to develop new a revenue source for miners & block producers that are already making huge money?
A: Yes. Even a very small revenue % increase means millions of dollars for operations that live on small margins.
Q: Which area does @Archer_DAO Project focus on at the moment? (DeFi, Stake,Dapps..) can you share your upcoming plan? What is the main difference from other projects?
A: Our project is extremely unique in that it connects two parts of the ecosystem which are very different: the application layer (DeFi users, etc.) and the network layer (miners).
Our immediate next steps are to release the ARCH token and grow the network.
Q: The Liquidity Mining Rewards program of Archer DAO was recently announced. How can we participate as miners, and what are the reward % and dates of distribution?
A: No Liquidity Mining program has been announced. That is ultimately a decision for the DAO. We outlined some of the considerations in this post: https://medium.com/archer-dao/archer-network-overview-b0ae4d7d1895
Q: I’m not a Miner, can I join the Archer ecosystem? What fees will Miners be charged?
A: Today, revenue is split between supplier and miner. That part is handled manually. I expect the network will prefer to handle revenue splits automatically, through a smart contract. These types of splits will be determined by the DAO as they affect network growth, etc.
Q: How will your project generate profits / income to sustain your project and what is the revenue model? How will it benefit your investors and your project?
A: We are a supplier today, although I expect better suppliers will replace us. Archer DAO will need to consider how to sustain the network — we see many great examples being explored by other DAOs and encourage experimentation here.
Q: Which Unique features/products are provided by ArcherDAO to any members? What’s so special about ArcherDAO that makes it better than its competitors?
A: I’m not aware of any direct competitors. We have a great headstart on growing our network with miners and suppliers. I expect great network effects, whereas we get more miners, more suppliers are interested and push profitability, etc.
Q: Since the management of the token is extremely important, do you plan with ARCH to carry out buybacks, burns, or locked for a period of time to incentivize investors?
A: Great question! Archer DAO should decide how this mechanism works. We have seen incredible advances in tokenomics being explored by Delphi, Paradigm, and others.
Q: What will affect the ARCH token inflation rate? How do you keep this rate lower 2% per mint?
A: Our goal in building the token and governance system (see https://github.com/archerdao/governance) was flexibility. We time-locked any supply changes and added hard caps, but left the ability for the DAO to mint and burn tokens as needed
Eric: Okay! That's a wrap.
@calebsheridan please invite ppl to your groups and accounts.
We are looking forward to the token generation event.
Thank you for this wonderful AMA!
The group has been unmuted!
Caleb Sheridan: Eric, thank you so much for organizing and the great questions from this community. That was a lot of fun and helpful to understand the questions!
Please follow along in our communities:
Note: ARCH token is not released yet. We will share details about its release on our social channels.