# What is SHADOW?

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Building upon Andre Cronje's seminal defi primitive Solidly, and as an authorized fork of RAMSES, SHADOW incorporates Solidly's **ve(3,3)** foundation and RAMSES' proprietary **concentrated liquidity** implementation to bring unparalleled liquidity efficiency to **Fantom Sonic**.

SHADOW takes concentrated liquidity to the next level, optimizing for high frequency trading on liquidity pairs and Fantom Sonic's high throughput and low cost structures.  The result is a hyper-efficient liquidity layer designed to attract the most effective liquidity providers, while delivering a clean and simple user interface that is accessible for all users.


# Why Fantom?

Why Did SHADOW Choose Fantom?

<figure><img src="/files/aeXcPMdhoqHBOYsHvdhy" alt=""><figcaption></figcaption></figure>

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Fantom's Sonic upgrade has changed the game in terms of blockchain efficiency--allowing for a transaction speed and throughput heretofore unseen in the crypto space.  SHADOW's ultra efficient liquidity implementation pairs perfectly with Fantom Sonic's capabilities, unlocking the full potential of blockchain for high frequency trading and financial applications that require the high levels of speed and efficiency.  SHADOW is uniquely situated to be the ultra high efficiency concentrated liquidity medium for Fantom Sonic, meeting the needs of sophisticated traders and retail users alike in an unparalleled manner.

The SHADOW team is made up of technology and finance professionals with deep roots in decentralized finance and the Fantom ecosystem, staying loyal and connected to the Fantom community throughout the crypto market cycles.  SHADOW is committed to fostering, collaborating and growing the Fantom Sonic community.


# Our Partners

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SHADOW aims to align with the community's preferences by distributing voting power to protocols that have actively contributed to the development and improvement of the Fantom ecosystem.  These protocols, which we believe will continue to generate value in the future, encompass various categories such as yield aggregators, money markets, swap aggregators, blockchain games, distributed AI, novel defi products and more.  This distribution of voting power serves as a recognition of their efforts and encourages ongoing collaboration within the ecosystem.

<table data-column-title-hidden data-view="cards"><thead><tr><th align="center">Partner Protocol</th></tr></thead><tbody><tr><td align="center"><mark style="color:orange;">Tarot Finance</mark> <img src="/files/xW1HswSKZ0fbdxM7ud7t" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">Beefy Finance</mark> <img src="/files/jMKfNa9BnZikVJQ2RVH8" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">Liquid Driver</mark> <img src="/files/RFf5JlhuCznkZ1ofI8BK" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">PaintSwap</mark> <img src="/files/ypzgi13LCV9pZrF1Khvh" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">Gamma Strategies</mark> <img src="/files/lQwGJYMVUP14972Rf3uB" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">ODOS Protocol</mark> <img src="/files/bG1JJlkvuto7JL3jeM3N" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">sFTMx</mark> <img src="/files/LDi0HDYKIlZG4gN8vAp8" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">fBOMB</mark> <img src="/files/FKhJLXwhhhYuikZqalSE" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">MCLB</mark> <img src="/files/1RGSkNalQCc8qUiT0DwF" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">YFX</mark> <img src="/files/qfVkOrdtdccEZhpTRB0P" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">The Forged</mark> <img src="/files/emKkYZw2mrOWW6A0vFwD" alt="" data-size="line"></td></tr><tr><td align="center"><mark style="color:orange;">TBA</mark></td></tr></tbody></table>


# x(3,3) Fundamentals

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Andre Cronje's introduced a novel ve(3,3) concept to the traditional defi model, incorporating elements of game theory alongside an anti-dilution mechanism (aka "rebase") and high efficiency swap curves.  Combining together to create a continuous flywheel rooted in sustainability in both tokenomics and user retention.

SHADOW builds upon Mr. Cronje's work with novel tokenomics and a unique x(3,3) implementation designed to further enhance the user experience and sustainability of the model. This system takes a user first approach by incorporating exit mechanisms, removing locks and any friction from liquidity providers.

<figure><img src="/files/Hrfd8FEeavFaKKYogUhZ" alt=""><figcaption></figcaption></figure>

[<mark style="color:orange;">xSHADOW</mark>](/shadow-tokenomics/xshadow) <mark style="color:orange;">is where x(3,3) shines versus the ve(3,3) model.</mark> xSHADOW is not subject to four-year locks,  illiquid but instead offers users the ability to exit instantly or vest over a user defined period. These early exits are streamed back to xSHADOW holders while also earning protocol fees, bribes, and other conversions. Adding exit mechanisms to x(3,3) prevents the buildup of inactive voting power. ([PVP Rebase](/shadow-tokenomics/xshadow/pvp-rebase)).\
\
x(3,3) also takes a proactive approach to ecosystem health with dual-token emissions split in <mark style="color:orange;">SHADOW &</mark> [<mark style="color:orange;">xSHADOW</mark>](/shadow-tokenomics/xshadow). These splits [can be configured](/shadow-tokenomics/xshadow/how-is-xshadow-obtained) per pool to best support the ecosystem.


# AMM DEX Functionalities

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The following sections set forth a description of the core decentralized exchange (DEX) functionalities of SHADOW.


# Swaps

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On SHADOW, similar to other decentralized exchanges (DEXs), users engage with the platform to make swaps of tokens from available liquidity pairs.  The slippage and trade price for a swap are determined based on the total value locked in the liquidity pairs and whether arbitrage activities have balanced the pool to its market rate. &#x20;

SHADOW features two types of Liquidity Pools, each with its own swap curve:

* Volatile (UniV2-Style): This is the basic type of pool where tokens are paired with equal weights in terms of dollar value. The volatile swap curve is used to facilitate trades within these pools and is best suited for tokens with prices that may be subject to fluctuation in market prices.
  * The volatile swap curve used is:

$$
x\*y=k
$$

* Correlated (Andre Cronje-Style): Shadow also makes available a high efficiency stable swap curve that is designed for stable coins and other tokens that do not fluctuate greatly in price.  The stable swap curve, devised by Andre Cronje, offers near-zero slippage and allows for ultra-efficent stable swaps.
  * The stable swap curve used is:

$$
x^{3}y \ +y^{3}x \geq k
$$

## Graphical Representation of The Swap Curves

To provide a graphical representation of the swap curves, the graph below illustrates the variance between 0 and 100. It demonstrates that the Green (Correlated) curve exhibits less slippage from the mean as the K value fluctuates.

{% embed url="<https://www.desmos.com/calculator/5l0tnmuqh9>" %}
Green = StableSwap Curve, Red = Volatile Swap Curve
{% endembed %}

This visualization helps users understand the behavior of the swap curves and the corresponding slippage levels associated with different values of K. SHADOW aims to provide an optimized trading experience with minimal slippage, enhancing liquidity provision and ensuring efficient token swaps for users.


# Voting

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The main purpose of the xSHADOW token is to vote to direct emissions to LP token pairs. This is achieved through weekly voting for liquidity pairs. Emissions are distributed proportionally to the total percentage of votes in the epoch.

The expected emissions can be calculated using a simple division formula as such:

$$
emissions(PAIR) \ = \ % \ of \ total \ votes \ \div 100 %
$$

For example, in the first epoch 1,250 SHADOW will be distributed. If 10% of all votes are allocated to the USDC/FTM pair, that pair will receive 125 SHADOW tokens distributed linearly to liquidity providers of the relevant LP pair throughout the epoch.


# Incentives

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A fundamental aspect of the x(3,3) DEX model is the inclusion of voting incentives as a core feature. SHADOW implements two types of voting incentives within the system:

1. **Vote Incentives:** Users and protocols have the ability to offer incentives to voters, influencing them to vote to allocate emissions to specific token pairs. In exchange for their votes, the xSHADOW holder receives a proportionate distribution of the voting incentives provided to the relevant pair. This market based mechanism allows stakeholders to shape the allocation of emissions according to their preferences and strategic interests.
2. **Gauge Incentives:** In addition to emissions, tokens can be directly offered as incentives to liquidity providers (LP token stakers). This incentivizes the growth of liquidity in specific token pairs, primarily benefiting protocols seeking to bootstrap liquidity efficiently on SHADOW. By offering gauge incentives, new and existing protocols can attract liquidity and promote the development of robust trading pairs.

These incentive mechanisms empower users and protocols to actively participate in shaping the SHADOW and Fantom Sonic ecosystem, fostering liquidity provision, and driving value to specific token pairs and Fanton Sonic communities. This mechanism promotes an inclusive and dynamic environment where stakeholders can engage in strategic collaborations and mutually beneficial arrangements.


# LP Staking

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In the SHADOW model, liquidity providers stake their LP tokens in a SHADOW gauge to earn a portion of the swap fees along with emissions in the form of SHADOW tokens.  SHADOW encourages the provision of liquidity through attractive APRs and incentives made available to LP token stakers.

The more votes allocated to a liquidity pair by xSHADOW voters, the more SHADOW that will be emitted to the gauge in the following epoch.


# Concentrated Liquidity

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<figure><img src="/files/NDVY4dPBa7JAtoabbuJw" alt=""><figcaption></figcaption></figure>

Concentrated Liquidity is currently the most efficient and profitable method of market making that on-chain decentralized exchanges have access to. This type of liquidity was initially popularized by Uniswap with their UniV3 model.\
\
To get an idea of what Concentrated Liquidity offers we can compare it to a more centralized, and well-known, liquidity scheme: A CEX Order Book.

<div data-full-width="true"><figure><img src="/files/ohDIVqdpPt8mmVlSnkTQ" alt=""><figcaption></figcaption></figure></div>

As you can easily see in the CEX Order Book diagram above, the bid (buys) and asks(sells) are clearly shown, and the depth at which a market order would impact the median price is visually discernible.\
\
Interesting enough, the concentrated liquidity model, is represented visually as an inverse histogram of the order book (imagine flipping the photo below upside down and inverting the colors and you will see the traditional CEX order book appears).

<figure><img src="/files/sM7nMEiz75hUjyj0NFv2" alt=""><figcaption></figcaption></figure>

The red shaded area represents the liquidity ranges summed between all users within the liquidity pool (within the same fee-tier, more on this later).

The efficiency differential between a traditional UniV2 (x\*y=k) and UniV3 concentrated liquidity orderbook-style AMM can be explained by reference to the fact that in a UniV2 liquidity pair, liquidity positions operate on a range of 0 to infinity (0,∞).&#x20;

This means that each individual liquidity provider in the pool is subject to providing liquidity in every possible positive real-number. Since every trade has to consider this when the swapping algorithms are executed, $100,000 of liquidity spread from 0 to ∞ is exponentially less efficient than, say, one with a defined range of ($1,000-$1,100). \
\
With the latter example of the $1,000-$1,100 liquidity range, it is calculatable that the same $100,000 of liquidity is now concentrated in a $100 price range, providing a massive improvement in efficiency and liquidity depth within the specified range.  Concentrated liquidity pairs have the ability to provide the lowest slippage currently available in decentralized exchanges.


# Fee Tiers

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There are multiple default fee tiers when creating a Concentrated Liquidity position on Shadow:

* <mark style="color:orange;">**0.01%, 0.015%, 0.02%**</mark>**&#x20;-** The lowest fee tiers available (low tick spaces), this provides the best rate for highly correlated and pegged assets
* <mark style="color:orange;">**0.025%**</mark> - This is good for competitive asset classes, such as USDC/WETH, which generate a lot of volume.
* <mark style="color:orange;">**0.05%**</mark>**&#x20;-** This is good for competitive asset classes with slightly more volatile pricing.
* <mark style="color:orange;">**0.25%**</mark> **-** This fee tier is the standard for  pairs that do not fall in the other categories.
* <mark style="color:orange;">**0.75%**</mark>**&#x20;-** Currently the highest fee tier available, 75 bps provides sufficient fee generation to offset the risk of providing liquidity for highly volatile assets.

| Fee Tier | Tickspacing |
| :------: | :---------: |
|   0.01%  |      1      |
|  0.015%  |      2      |
|   0.02%  |      3      |
|  0.025%  |      5      |
|   0.05%  |      10     |
|   0.25%  |      25     |
|   0.75%  |      50     |

{% hint style="info" %}
Additional fee tiers can be added based on market conditions.
{% endhint %}


# Concentrated Liquidity Pair Fee Distribution

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{% hint style="danger" %}
These parameters regarding the swap fee distribution are variable and can be changed based on market conditions and individually per pool.
{% endhint %}

The global config by default is:

* 5% of fees will be routed to the ecosystem incentives fund.
* 45% of swap fees will be distributed to liquidity provider positions.
* 50% of swap fees will be distributed to xSHADOW voters in the same manner as traditional liquidity pairs.

<mark style="color:orange;">These percentages will vary per pool, as they can be configured per request.</mark>

***

100% of voting incentives provided in respect of concentrated liquidity pairs go to xSHADOW holders.


# Concentrated Liquidity Advantage

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<figure><img src="/files/LBkU3nkNug7BbsBHng8B" alt=""><figcaption></figcaption></figure>

In a demonstration of concentrated liquidity’s efficiency on Shadow Exchange, consider Alice and Bob each looking to provide liquidity to an FTM/USDC pool with $1,000,000 at an FTM price of $0.45 USDC. Alice spreads her investment across the full price range, by depositing $1m in FTM/USDC. Bob, however, opts for a concentrated approach, allocating $183,500 within the 0.3–0.6$ range and keeping the remainder.

Despite Alice’s larger capital input, both earn equal fees if FTM/USDC stays within Bob’s chosen range. Moreover, if FTM were to go to zero, **Bob’s strategy limits his potential loss to $159,000 compared to Alice’s $1,000,000, giving him flexibility to reinvest or hedge with his remaining capital** — **while still earning the same rewards!**

This implementation is the most ideal on a chain like Fantom, slippage is real and exasperated with low liquidity and by concentrating liquidity, **Shadow Exchange will perform better with significantly less liquidity than your typical AMM.**


# Concentrated Liquidity (CL) Gauges

A Concentrated liquidity staking/rewarder solution novel to Fantom

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SHADOW introduces a significant enhancement to the concentrated liquidity rewarding model, primarily through an innovative concentrated liquidity gauge contract infrastructure. This crucial component seamlessly integrates into the ve(3,3) model, and is implemented and secured under a BUSL-1.1 license.

**Features of SHADOW CL Gauges**

* <mark style="color:orange;">Non-custodial staking solution</mark>
  * SHADOW employs a unique method of staking and rewarding liquidity providers through a delegation mechanism. This approach allows users to retain their non-fungible LP positions in their wallets while still earning fees, SHADOW token emissions, and other liquidity provider incentives.
* <mark style="color:orange;">Competitive Rewarding Logic</mark>
  * The CL Gauges determine rewards based on several factors:
    * Tick Delta (Δ) (Upper Range - Lower Range) of the user's position
    * Position size
    * Position Utilization: In Range? (True or False)
  * This rewarding methodology offers several benefits. It encourages tighter liquidity ranges, resulting in higher emissions for participants. By concentrating liquidity within these utilized ranges, overall slippage decreases, liquidity depth within the given range increases, and volume/fees increase due to more favorable swap routing.


# BUSL-1.1 License

Shadows's concentrated liquidity is sub-licensed from RAMSES and subject to a BUSL-1.1 license.

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SHADOW is an authorized fork of RAMSES and operates its concentrated liquidity codebase under sub-license from RAMSES.  **The SHADOW concentrated liquidity codebase is copyrighted by RAMSES and is protected under RAMSES' BUSL-1.1 license.**

What this means is that the novel code cannot be used by other teams without direct permission from the authorizing entity, which in this case is RAMSES.

Protected Contracts Include, but are not limited to:

* <mark style="color:orange;">ClGauge.sol & any relevant interfaces</mark>
* <mark style="color:orange;">FeeCollector.sol & any relevant interfaces</mark>
* <mark style="color:orange;">Any contracts designated with the BUSL-1.1 header.</mark>


# Competitive Farming

Shadow's CL implementation incorporates the concept of competitive farming into a x(3,3) style DEX.

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With concentrated liquidity, there are new dynamics at play when providing liquidity and yield farming. SHADOW incorporates competitive farming into to the x(3,3) model, which promotes the most optimized positions achievable by users.

<mark style="color:orange;">**What is Competitive Farming?**</mark>\
Competitive farming can be simply explained as a method of rewarding liquidity providers in which the most 'competitive' and productive liquidity is rewarded the highest. In concentrated liquidity models, users choose the liquidity ranges they want to provide their liquidity to. This opens the possibility for a user to choose any liquidity range (tick range) between 0 and infinity.&#x20;

<mark style="color:orange;">**What are the benefits?**</mark>\
The more optimized (tighter) a user's range is, the higher rewards they can earn while the exchange price of their liquidity pair is within the range they have selected. This creates an incentive on the part of liquidity providers to strive to "peak perform" and maximize rewards by providing liquidity at optimal ratios and depths. This optimization drives swap aggregator routings to SHADOW liquidity pairs enhancing the performance of the platform and the earnings of xSHADOW voters and liquidity providers. Concentrated liquidity is unparalleled in its ability to drive volume to liquidity pairs, including those that would otherwise not have sufficient liquidity depth to be competitive.\
\
Higher fees are achieved as a result of increased swap volume directed towards SHADOW concentrated liquidity pairs, increasing the earning potential for xSHADOW voters and liquidity providers.&#x20;

Visual Representation of Competitive Farming:\
In the figure below, the current price-tick of the pair is within the red area. This red area is the currently used swap-tick for trades to route through. Liquidity positions that have the highest concentration around this red line will earn the most rewards while it stays there. Whenever a large enough swap happens, this price-tick will move to either direction, changing the rewards distribution factors.


# SHADOW Initial Distribution

The distribution of the initial supply of SHADOW:

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<figure><img src="/files/r2Avx2OSX17lEiLTxZEP" alt=""><figcaption></figcaption></figure>

<table data-full-width="false"><thead><tr><th align="center">Initial Supply</th><th align="center">Max Supply</th></tr></thead><tbody><tr><td align="center"><strong>3,000,000</strong></td><td align="center"><strong>10,000,000</strong></td></tr></tbody></table>

<table data-full-width="true"><thead><tr><th align="center">Airdrop &#x26; EI</th><th align="center">Contributors</th><th width="178" align="center">Presale</th><th align="center">Reserves</th><th align="center">POL</th><th align="center">Community Incentives</th></tr></thead><tbody><tr><td align="center"><strong>20%</strong></td><td align="center"><strong>25%</strong></td><td align="center"><strong>25%</strong></td><td align="center"><strong>15%</strong></td><td align="center"><strong>10%</strong></td><td align="center"><strong>5%</strong></td></tr><tr><td align="center"><strong>600,000</strong></td><td align="center"><strong>750,000</strong></td><td align="center"><strong>750,000</strong></td><td align="center"><strong>450,000</strong></td><td align="center"><strong>300,000</strong></td><td align="center"><strong>150,000</strong></td></tr><tr><td align="center">xSHADOW <img src="/files/Nnu2Ni3JCth68Af7dusJ" alt="" data-size="line"></td><td align="center"> xSHADOW <img src="/files/xGWtiyf1R67RRR6eUJ9E" alt="" data-size="line"></td><td align="center">xSHADOW <img src="/files/HQYQ3vjwkfSVKSpVsO7T" alt="" data-size="line"></td><td align="center">SHADOW <img src="/files/EBj6agxgxepvthNMfFpH" alt="" data-size="line"></td><td align="center">SHADOW <img src="/files/7A9xKUEIGdXpq7Gio15f" alt="" data-size="line"></td><td align="center">xSHADOW <img src="/files/HYRcbRdFKV50BJ1B9xxP" alt="" data-size="line"></td></tr></tbody></table>

<figure><img src="/files/VClSCOFDMMDOxO2H7UPj" alt=""><figcaption></figcaption></figure>


# Emissions Schedule

The liquid SHADOW emissions according to the protocol's tokenomics.

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**100% of emissions go to gauges**, there are no team emissions or other distributions. Full decentralization of the emission distribution is the main priority.

There is a 1% exponential decay week over week, reducing emissions in perpetuity.

The formula to calculate an Epoch's emissions is:

$$
Emissions{(t)} = E\_{0}\ \*\ (e^{-rt})
\ \ \ t = Epochs \ E\_{0} = 50,000\ -r = decay \ coefficient
$$

Alternatively, a user can calculate the emissions for an epoch based on the previous, as such:

$$
Emissions(epoch(N)) \ = Emissions(N-1)  \ \* (1.00-decay)
$$


# Breakdown

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TBA


# Airdrop

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The xSHADOW token will have an airdrop initially to distribute the supply out to Fantom ecosystem aligned users, as well as those aligned with the Ramses kingdom.

* <mark style="color:orange;">**Airdrop:**</mark> 20% of initial supply (600,000 xSHADOW)
* <mark style="color:orange;">**Breakdown of Airdrop:**</mark>
  * <mark style="color:orange;">**3%**</mark> Chosen Fantom NFT Collections
  * **7%** veRAM lockers of 100,000 RAM or more
  * <mark style="color:orange;">**10%**</mark> Shadow Early Incentives
* <mark style="color:orange;">**Distribution Methodology:**</mark>
  * The 300,000 xSHADOW will be distributed to all eligible users via:
    * Claims (NFTs)
    * One-time distribution (veRAM Holders)
* <mark style="color:orange;">**When?:**</mark>
  * <mark style="color:orange;">Fantom NFTs</mark>
    * The airdrop will be claimable sometime after launch and will be shown on the SHADOW frontend dashboard.
  * <mark style="color:orange;">Shadow Early Incentives</mark>
    * The Shadow Early Incentive (SEI) program is designed to reward early ecosystem participants, including LPs, holders, partner projects, and active traders. We'll be unveiling more details about the SEI program in the coming weeks, so stay tuned for exciting opportunities to engage with Shadow from day one.
  * <mark style="color:orange;">veRAM Holders</mark>
    * The airdrop will be claimable sometime after launch and will be shown on the SHADOW frontend dashboard.


# xSHADOW

Escrowed SHADOW "xSHADOW"

<figure><img src="/files/TJDExQ5TeLEcfKV23TJH" alt=""><figcaption></figcaption></figure>

## <mark style="color:orange;">Please visit</mark> [<mark style="color:orange;">docs.shadow.so</mark>](https://docs.shadow.so/) <mark style="color:orange;">these are depreciated.</mark>&#x20;

## <mark style="color:orange;">Web app is available at</mark> [<mark style="color:orange;">shadow.so</mark>](https://www.shadow.so/)

<mark style="color:orange;">**What is xSHADOW?**</mark>\
\
xSHADOW is a novel x(3,3) implementation developed by the SHADOW team to address the sustainability challenge associated with earlier ve(3,3) models. xSHADOW is a non-transferable representation of 1 unit of SHADOW held in voting escrow within the xSHADOW token smart contract.  Only holders of xSHADOW have voting rights on SHADOW.  While xSHADOW itself is non-transferable, it provides users with several exit options, each with unique attributes and vesting periods.

Holders of xSHADOW receive a multitude of benefits in the SHADOW ecosystem, such as:

* Voting on gauge emissions
* Voting on pools to earn Vote Bribes, and Swap Fees
* Dilution protection and loyalty rewards in the form of player vs. player (PvP) rebases


# How is xSHADOW obtained?

## <mark style="color:orange;">Please visit</mark> [<mark style="color:orange;">docs.shadow.so</mark>](https://docs.shadow.so/) <mark style="color:orange;">these are depreciated.</mark>&#x20;

## <mark style="color:orange;">Web app is available at</mark> [<mark style="color:orange;">shadow.so</mark>](https://www.shadow.so/)

Users can acquire xSHADOW through voting incentives and token emissions directed to liquidity pair gauges. A portion of xSHADOW tokens may also be directed to advance sustainable vote-incentive matching programs to further incentivize market participants.&#x20;

Each gauge will have the opportunity to earn a proportionate split of SHADOW and xSHADOW tokens based on the liquidity pair's role and impact on DEX profitability and sustainability. Core pairs, which contribute significantly to the ecosystem's growth and DEX sustainability, will receive the majority or entirety of emissions in liquid SHADOW. Conversely, extremely low volume and low fee-generating pairs will receive a higher percentage share of emissions in xSHADOW. This approach promotes sustainability and discourages employment of "mercenary" capital that does not align with the goals of the ecosystem.

The initial Ratios per gauge:

* **Default Ratio:** 80% xSHADOW / 20% SHADOW

{% hint style="info" %}
Ratios are subject to adjustment based on the criteria noted above.&#x20;
{% endhint %}

***

### <mark style="color:orange;">SHADOW > xSHADOW conversion</mark>

SHADOW can be freely converted into xSHADOW at any time. The process is instant, and the ratio is 1:1.


# How is xSHADOW used?

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## <mark style="color:orange;">Web app is available at</mark> [<mark style="color:orange;">shadow.so</mark>](https://www.shadow.so/)

xSHADOW offers three distinct functionalities that form the basis of the decision matrix:

* <mark style="color:orange;">**Instant Exit to SHADOW (xSHADOW -> SHADOW):**</mark> This conversion allows for an immediate exchange of xSHADOW to SHADOW at a rate of X\* SHADOW per xSHADOW with a Y% haircut applied.
* <mark style="color:orange;">**Vesting of xSHADOW (xSHADOW -> SHADOW):**</mark> Vesting allows users to receive up to the full value of the SHADOW backing each xSHADOW, through a time based vesting process:

  * Minimum Vesting Length (Cancellation Period): The minimum vesting period for xSHADOW is set at 15 days (86400s \* 15), during which it cannot be canceled or returned.
  * Maximum Vesting Length (100% Exit): The maximum vesting period for a full exit of xSHADOW is 180 days (86400s \*180).

  Vesting can be cancelled only during the initial 14 day vesting period.  xSHADOW is returned to a user upon cancellation of vesting.  Once a minimum initial vesting period has elapsed, the vesting becomes permanent and a user may withdraw liquid SHADOW tokens subject to the haircut then applicable as determined based on the portion of the vesting period that has been completed.  Upon completion of the maximum 180 day vesting length a user receives SHADOW tokens in proportion to their xSHADOW on a 1:1 basis.

<mark style="color:orange;">X\* =</mark> Variable changeable by governance that represents the amount of xSHADOW-> SHADOW conversion from instant exits

<mark style="color:orange;">Y\* =</mark> Variable that represents the haircut % determinable from X

{% hint style="info" %}
Initially, instant exiting xSHADOW is subject to a 50% haircut and is instantly redeemable for 50% of the SHADOW value.
{% endhint %}


# PVP Rebase

## <mark style="color:orange;">Please visit</mark> [<mark style="color:orange;">docs.shadow.so</mark>](https://docs.shadow.so/) <mark style="color:orange;">these are depreciated.</mark>&#x20;

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SHADOW incorporates a unique player vs. player (PVP) take on the traditional ve(3,3) anti-dilution (rebase) model which is designed to both protect xSHADOW holders from dilution and to incentivize them to maintain their positions and participate in the continued success of SHADOW.&#x20;

100% of xSHADOW tokens that are forfeited upon instant exit or subject to the haircut upon exit prior to full vesting by exiting xSHADOW holders are streamed to all other xSHADOW holders and can be claimed in proportion to their respective positions, serving as both dilution protection (rebase) and loyalty reward.&#x20;

**This rebase mechanism not only discourages premature exits but also ensures that the remaining participants are rewarded for loyalty and active participation.**

{% hint style="warning" %}
Rebase parameters are subject to adjustment.
{% endhint %}


# Redeeming

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### <mark style="color:orange;">xSHADOW > SHADOW redemption</mark>

Converting xSHADOW to SHADOW involves a user-selected vesting period that directly influences the conversion ratio. The longer the vesting, the more favorable the ratio:

* An immediate conversion incurs a 50% penalty, offering a 1:0.5 ratio.
* Opting for a full 6-month vesting period results in a 1:1 ratio, eliminating any penalty

Vesting can be cancelled only during the initial 14 day vesting period.  xSHADOW is returned to a user upon cancellation of vesting.  Once a minimum initial vesting period has elapsed, the vesting becomes permanent and a user may withdraw liquid SHADOW tokens subject to the haircut then applicable as determined based on the portion of the vesting period that has been completed.  Upon completion of the maximum 180 day vesting length a user receives SHADOW tokens in proportion to their xSHADOW on a 1:1 basis.

{% hint style="warning" %}
These ratios can be subject to change as the protocol evolves, any changes will be expressed ahead of time.
{% endhint %}


# xSHADOW Revenue Distribution

## <mark style="color:orange;">Please visit</mark> [<mark style="color:orange;">docs.shadow.so</mark>](https://docs.shadow.so/) <mark style="color:orange;">these are depreciated.</mark>&#x20;

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{% hint style="info" %}
During epoch 0, since there is no pre-voting, all trading fees will be rolled into Epoch 1.
{% endhint %}

<mark style="color:orange;">**Weekly Epochs:**</mark> SHADOW incorporates the traditional weekly epoch cycle, where users vote to direct emissions on a weekly basis.

**Vote Incentives:** Users earn voting incentives immediately after the epoch flips on Thursday of each week.  Voters that vote on a liquidity pair recieve 100% of voting incentives provided to that pair.  For example, if there is a 1000 USDC incentive on a pair, and the pair receives votes from only a single voter, that voter would receive 1000 USDC claimable when the next epoch begins on Thursday at 0:00 a.m. UTC.

<mark style="color:orange;">**Swap Fees:**</mark> Voters also earn a share of trading fees in real-time throughout the week, based on the pool(s) they voted for before the epoch flips. These are pushed on a regular cadence permissionlessly when the applicable fee threshold is achieved.

<mark style="color:orange;">**Early Exits:**</mark> xSHADOW introduces a "PvP Rebase" system, addressing the traditional veTOKEN model's lack of an exit mechanism. Instant exits are streamed back to xSHADOW holders in real-time.

<mark style="color:orange;">**Conversions:**</mark> Converting xSHADOW to SHADOW involves a vesting process where the conversion ratio increases with longer vesting periods. Should a user opt for a vesting duration less than the maximum, the excess SHADOW is redistributed back to xSHADOW holders.


# Deployed Contract Addresses

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## <mark style="color:orange;">Web app is available at</mark> [<mark style="color:orange;">shadow.so</mark>](https://www.shadow.so/)


# dApp and Socials

## <mark style="color:orange;">Please visit</mark> [<mark style="color:orange;">docs.shadow.so</mark>](https://docs.shadow.so/) <mark style="color:orange;">these are depreciated.</mark>&#x20;

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# SHADOW Media Kit

## <mark style="color:orange;">Please visit</mark> [<mark style="color:orange;">docs.shadow.so</mark>](https://docs.shadow.so/) <mark style="color:orange;">these are depreciated.</mark>&#x20;

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{% file src="/files/L9xPPZbIW2K1PyWXs1bs" %}

{% file src="/files/cGu4DA4JmYfioKNJ16CO" %}

{% file src="/files/iC2IKmgJUMFsDNSpu8Nl" %}

{% file src="/files/zzZSNnqdCSPLCofLWSE8" %}

{% file src="/files/tT5V9I0aM0bJsF0pYbMG" %}

{% file src="/files/HYadV3CSDE1uDv0dnGFp" %}

{% file src="/files/LgFGeaqEnSGECnmpKq6A" %}

{% file src="/files/k3WBzoVomybTAuR7Upxn" %}

{% file src="/files/j95By1erQwC52ghsszup" %}


# Bridging To Sonic

How you can bridge over to Sonic

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# Fixed Solidly Vulnerabilities

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# Why Proxy Contracts?

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# Contract Timelock

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# Inherited Security

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# Formal Audits

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# Risks and Legal Disclosures

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## <mark style="color:orange;">Web app is available at</mark> [<mark style="color:orange;">shadow.so</mark>](https://www.shadow.so/)