DKDEFI 2.0 on Base Featuring 1,000%+ Higher Capital Efficiency

General Discussion
1

DKDEFI was the second graduated Agent on the IQ AI Platform and has been a top Agent since.

Months after DKDEFI graduated, a Bitcoin centric fork of DKDEFI named Luna was deployed.

Luna is currently the highest ranked Agent on IQ with over 160K TVL.

Since initial deployment, the DKDEFI Agent-Optimized Portfolio of DeFi Strategies and DKDEFI Liquidity Pool systems have proven to be a huge success.

Over 6.67% of the DKDEFI supply has been bought from the DEX market and burned. These buy-and-burns were funded by yield from DKDEFI’s (and IQYIELD’s) on-chain strategies including swap fees from DK’s concentrated DKDEFI liquidity pool positions.

Over 50% of the total DKDEFI supply is currently deposited into the DKDEFI sophisticated liquidity pool network, which generates and compounds revenue automatically into the value of DKDEFI tokens hundreds of times per day on average.

DKDEFI tokens have been transferred over 393,000 times on Fraxtal Network and over 30K times on Polygon network. This makes DKDEFI one of the most frequently traded tokens on the Fraxtal network.

Agents IQYIELD and BTCWITCH, which are forks of DKDEFI, have been traded over 120K times each. NOIR, a post-graduation adaptation of DKDEFI, has been traded over 77K times. All together, DKDEFI and the three forks/adaptations of DKDEFI account for over 95% of all IQ AI Agent transactions to date.

Agents DKDEFI, IQYIELD, BTCWITCH and NOIR (All Agents either created by, managed by, or forked by Astral Protocol, account for over $500K in IQ AI trade volume, which makes up about half of all historial IQ AI Platform revenue.

DKDEFI tokens peaked in value at $0.0033 each. IQYIELD peaked at $0.0027 each. BTCWITCH peaked at $0.015 each. Totaling over $2 million TVL combined at peak values.

Since market peak, the values of DKDEFI, IQYIELD, BTCWITCH, and all other Agents have plummeted to very low values, with all but 3 Agents having underneath $10K TVL, BTCWITCH with $165K TVL and Sophia with $30K TVL.

Furthermore, IQ AI platform trade volume has become virtually non-existent (less than $100 in swaps in the last 30+ days).

What happened to IQ AI Platform TVL?

The value of IQ tokens, which every IQ AI Agent token is primarily backed by (and thus, linked in value to) has decreased by 79% since DKDEFI was initially deployed.

DKDEFI tokens are also backed by sfrxETH, which has decreased in value by about 60% since market peak about 4 months ago, and FRAX, which has decreased in value by about 85% since its peak about 7 months ago.

IQ AI’s user activity has remained very low for the vast majority of time. After a short period of initial whale buy-ins to activate each graduated Agent, very few, if any, significant Agent purchases occurred afterwards. Meanwhile, the majority of all Agent token purchases were sold shortly (days to hours) after purchase.

Fraxtal’s FXTL point conversion event was delayed for the foreseeable future. As a result, DKDEFI’s accumulated FXTL position has yet to be converted into DKDEFI buy-and-burns + increased DKDEFI Treasury revenue / DKDEFI liquidity depth.

Fraxtal Chain offers a very limited selection of liquidity pool types and advanced liquidity systems that offer several times higher liquidity provider returns compared to standard V2 pools are not available on Fraxtal.

Reduced DKDEFI liquidity efficiency combined with an extremely limited selection of tokens available on Fraxtal, multiplied by very reduced trade volume on Fraxtal Network has resulted in over a 90% reduction in capital efficiency for DKDEFI’s Treasury yield and sophisticated liquidity pool network revenue compared to Base.

As a result, DKDEFI value appreciation from buy-and-burn and buy-and-deposit automation has been extremely reduced.

In late April, BrainDAO founder and IQ AI Agent Mega-Whale Navin rapidly sold 100% of his DKDEFI and IQYIELD positions, while posting in the IQ AI chat and warning users about DKDEFI and IQYIELD’s lack of ATP SDK integration and other potential issues.

As a result, the vast majority of IQ AI platform user bought DKDEFI, IQYIELD, NOIR, and BTCWITCH tokens were rapidly sold. Which caused their values to plummet.

Whats next? Is it possible to revitalize the IQ AI Platform and restore the value of IQ to new all time highs?

2

Introducing DKDEFI 2.0:

Launching on Base, with over 10 times more automated DKDEFI buying pressure and built in DKDEFI value appreciation along with full 100% on-chain AI Agent transactional execution, IQ AI ADK-TS integration, audited non-custodial smart contract vaults, DKDEFI token holder/liquidity provider incentives and audited, timelocked, DAO controlled, AI optimized multisig treasuries.

Feature 1: The DKDEFI 2.0 IQ AI ADK-TS Plugin.

All DKDEFI 2.0 functionality will be very easily forked by developers through an easy to use Plugin that will be uploaded to the IQ AI ADK-TS library. Users and communities will be empowered to create Agents on IQ AI based around specific ecosystems, tokens, and strategies.

Through the DKDEFI 2.0 ADK-TS Plugin, the IQ AI Platform could become a hub for AI Agent & DAO Managed Sophisticated Cryptocurrency Portfolios that anyone can easily enter and exit.

This unique use case would set IQ AI apart from Virtuals and dozens of other competing tokenized Agent launchpads.

Feature 2: Non-Custodial, Trustless, Secure, Audited, and Safe.

Due to IQ AI platform limitations, DKDEFI V1 includes partial execution of the DKDEFI on-chain Portfolio by Astral Team members.

DKDEFI V2 is fully hands off. All DKDEFI 2.0 token assets will be deposited into fully automated, non-custodial, audited on-chain Yearn, Steer, and Arrakis vaults and secured by an Aragon Treasury jointly controlled by DKDEFI token holders and the DKDEFI AI, requiring DKDEFI DAO community consensus approval for strategy deployment transactions submitted by the DKDEFI AI.

Feature 3: Multiplied Yield via Layered Vault & Liquidity Pool Strategies.

DKDEFI V1 had to split DKDEFI Treasury funds between the DKDEFI Liquidity Pool Network and DKDEFI’s Treasury of external high yielding DeFi strategies, resulting in decreased yield efficiency.

DKDEFI V2 will deposit non-native liquidity into Yearn V3 Vaults to generate yield from external strategies. Liquid Yield bearing yearn vault receipt tokens will then be deposited into the DKDEFI sophisticated liquidity pool network to simultaneously earn both external DeFi Strategy revenue as well as liquidity pool swap revenue while increasing DKDEFI liquidity depth.

Feature 4: V4 Uniswap Hooks with dynamic swap fees, automated arbitrage and MEV Capture.

DKDEFI V1 had to rely on extremely inefficient V2 liquidity pools for the DKDEFI sophisticated liquidity pool network.

DKDEFI V2 will utilize V4 Concentrated Liquidity Hooks that increase yield by over 50% compared to standard V3 concentrated liquidity pools and over 500% compared to V2 liquidity pools.

DKDEFI V4 Uniswap Hook functionality will include:

  1. Real-Time Adaptive Swap Fee Rate Optimization.
  2. MEV Backrun Arbitrage operations that automatically rebalances pools after swaps with arbitrage revenue reinvested into liquidity.
  3. Adaptive MEV Capture Fee that Identifies incoming pool arbitrage trades and charges an additional fee to capture 90%+ of Arbitrage profits back into permanent liquidity.
  4. Adaptive Inventory Rebalancing Fee. An increasingly large swap fee is applied to trades that imbalance pool weights. This fee helps keep concentrated liquidity positions in range while also greatly offsetting impermanent loss and rebalancing costs.

Feature 5: Audited On-Chain Concentrated Liquidity Management Steer & Arrakis Vaults.

DKDEFI V1 had to rely on manual execution and optimization of recently deployed Concentrated DKDEFI liquidity pools.

DKDEFI V2 will completely automate rebalancing and fee collection from all V4 concentrated DKDEFI liquidity pools via Audited Steer and Arrakis Vaults. This will further increase DKDEFI liquidity pool network revenue by allowing for deeper concentration levels compared to manually rebalanced liquidity positions.

3

What Are the Requirements to Launch DKDEFI 2.0 on Base?

Launching DKDEFI 2.0 on Base will take the full support of the IQ AI DAO and community, including an initial $200K Grant to seed Fund the DKDEFI Agent, Treasury, and Liquidity Pool Network and then an additional $145K over time as development milestones are reached.

Phase 1: Approval and Initial Deployment.

If the DKDEFI 2.0 proposal is approved by the IQ AI DAO, the next step would be for the IQ AI DAO to deploy IQ liquidity to Base Chain.

Then to utilize $35K worth of IQ to purchase DKDEFI 2.0 tokens. This should be done before any other traders purchase DKDEFI tokens in order to prevent losses from early entree whales selling their pre-graduation DKDEFI V2 tokens.

After the DKDEFI Agent Graduates, the IQ AI DAO would then upgrade the DKDEFI V2 IQ AI Agent Contract to allow the DKDEFI Agent to transfer all DKDEFI Treasury assets to a dedicated Aragon Safe that will be configured with a 7 day proposal period and dual approval from 2 separate voting bodies required to pass and execute proposals.

DKDEFI Aragon Body 1 being composed of DKDEFI V2 token holders with a 61% Majority Consensus and 10% Quorum required for approval. Body 2 being composed of 2 Astral team wallets, 2 IQ AI Team wallets and 1 wallet controlled by the DKDEFI Agent with 61% Majority Consensus and minimum 40% Quorum required to pass. Only Body #2 can generate Proposals.

After transferring DKDEFI Treasury Assets to Aragon, the IQ AI DAO would then keep 20M DKDEFI tokens that were purchased earlier while transferring the remaining DKDEFI tokens to the DKDEFI Aragon Safe.

IQ AI DAO would then stake 5M DKDEFI for long term IQ DAO Treasury Revenue. The remaining 15M DKDEFI tokens would then be deposited into a vesting contract with a 1 year cliff followed by a 2 year linear vesting period. As vested DKDEFI tokens unlock, the IQ AI Treasury may either sell, hold or stake unlocked DKDEFI tokens.

After transferring excess DKDEFI tokens, the IQ AI DAO would then transfer $35K in IQ and $115K in frxUSD to the DKDEFI Aragon Safe.

Phase 2: Deploying the DKDEFI Treasury and Liquidity Pool Network.

After the DKDEFI Aragon Safe is loaded, $20K worth of Safe held IQ will be deposited into hiIQ staking for 4 years. This position will be periodically max-lock renewed and revenue from this position will help fund the DKDEFI Treasury and DKDEFI staking rewards.

  1. $25K frxUSD will be converted to yvyYB (wrapped liquid staked yearn yield basis, 90% APY).
  2. $25K frxUSD will be converted to stcvxCRV (liquid staked Convex CRV, 51% APY).
  3. $20K frxUSD will be converted into asdCRV (wrapped liquid staked stakeDAO CRV, 50% APY).
  4. $20K frxUSD will be converted into YB-WBTC (Yield Bearing Yield Basis WBTC, 38% APY).
  5. $10K frxUSD will be converted into wstETH.
  6. $10K frxUSD will be converted to AAVE.
  7. $10K frxUSD will be converted to UNI.
  8. $10K frxUSD will be converted into LINK.
  9. $10K frxUSD will be converted to PAXG. (Crypto gold).

DKDEFI V2 Tokens will then be deposited into V4 Liquidity Pools on Ethereum and Base along with asdCRV, yvyYB, UNI, LINK, AAVE, wstETH, WBTC, PAXG and remaining IQ.

V4 Hooks will be deployed to enable adaptive swap fee rates, automated backrun arbitrage swaps and MEV arbitrage capture.

After which on-chain concentrated liquidity vaults for every V4 DKDEFI liquidity pool will be deployed.

At this point, after the V4 DKDEFI liquidity pool network with Hooks and on-chain concentrated liquidity management vaults go live, the first milestone of $43K will become due as a developer payment to the Astral Protocol Team.

Phase 3: Deploy Liquid Yield Bearing Derivative tokens using Yearn V3 Vault Smart Contract Automation and wrapped yield bearing compounding wrapper tokens.

Deploy Liquid Staked IQ Yearn V3 Vault - that generates yield from hiIQ staking. Milestone cost of $32K.

After Liquid Staked IQ Tokens have been deployed, DKDEFI will upgrade existing DKDEFI/IQ liquidity to DKDEFI Liquid Staked IQ liquidity. This will provide DKDEFI with an increasing revenue stream proportional to the value of DKDEFI tokens.

Doing so will require an upgrade to the IQ AI front end to allow for swaps to route through the Liquid Staked IQ / DKDEFI liquidity pool rather than the IQ / DKDEFI Pool.

After this is complete, other Agents could also upgrade to liquid yield bearing IQ in order to benefit from embedded revenue from hiIQ staking to fund Agent Treasuries, operations and developments.

Phase 4: Develop The IQ AI ATP-TK DKDEFI V2 Plugin.

The primary functionality of this plugin will be to allow the DKDEFI AI intelligence to generate and share on-chain TXNs that can be loaded into the DKDEFI Aragon Treasury in order to execute direct on-chain transactions (pending DKDEFI DAO Approval to ensure accuracy).

Until this point is reached, Astral Team will convert the DKDEFI AI’s written recommendations regarding DKDEFI Treasury management into actual on-chain DKDEFi Aragon Treasury Proposals.

The milestone for developing the DKDEFI V2 ADK-TS plugin will need to be broken into several parts

A. ADK-TS DKDEFI V2 Plugin will periodically generate and share plainly written DKDEFI Treasury Optimization Strategy instructions and real time Treasury & DKDEFI Liquidity Pool network performance updates as Agent Logs transcribed automatically to the DKDEFI 2.0 IQ AI app page. Milestone: $35K.

B. DKDEFI V2 Plugin will periodically generate an exact blockchain TXN that can be loaded into the DKDEFI Aragon Safe via a proposal. Milestone: $20K.

C. DKDEFI V2 Plugin will periodically generate a full DKDEFI Aragon Proposal complete with Blockchain TXN, reasoning and supporting market factors. Milestone: $15K

4

The investment of funds in preparation for uncertain future outcomes is far too large. And I don’t believe BrainDAO members would agree to such an investment.