Overview

Pacman is a decentralized leveraged yield and liquidity aggregation protocol that is community-oriented and runs on Arbitrum and zkSync. Therefore, Pacman Finance is a community-driven project where token holders can vote on proposed changes to the protocol to ensure transparency and fairness. All performance fees will be distributed to VePAC token holders who hold system governance rights. Pacman leveraged liquidity mining is supported by a powerful incentive system CFOO (a combination of a unique vetokenomics system, multi-liquidity leveraged yield mining provided by SushiSwap, UniSwap, and Ve (3, 3) permissionless liquidity market).

Mechanism Analysis

Instead of relying on the principle of a decentralized exchange, Pacman Finance provides multi-liquidity leveraged liquidity mining, combining multiple liquidity pools and leveraging them to maximize returns. Popular DEX platforms on Arbitrum, such as Uniswap, Sushiswap, and ZyberSwap, all offer different liquidity pools with different returns and risks. Pacman Finance will open a leveraged position on the ETH-USDC pair for each DEX with high trading volume to ensure that there is enough demand for the liquidity pool (the reason for adding WETH_USDC first is that this currency pair usually accounts for 50% of the liquidity of most DEXs). The decision-making process for determining new DEXs and currency pairs is currently complex. However, in the future, the community will participate in the governance process, including voting for or against proposals submitted by veToken holders.

Since most decentralized exchanges on Arbitrum use different governance models, Pacman Finance will be used as a middleware layer to provide decentralized liquidity mining services to ordinary users. The advantages are:

  • LP’s fee share is dynamically adjusted to achieve the optimal liquidity level

  • Protocols (Dexes on Arbitrum) are able to bribe veP holders to get perpetual liquidity cheaply

LSD Finance

Pacman is committed to building a permissionless DeFi product for LSD liquidity collateral tokens on Layer2.

Pacman allows assets to be transferred from Layer 1 to Layer 2 through the Arbitrum bridge or LayerZero's bridge. Layer 2's low transaction fees and high-speed network performance will help Pacman build decentralized financial products based on LSD (liquidity collateralized derivatives) collateral assets more efficiently.

Target

Develop a platform that can meet the needs of LSD holders and other LSD-related protocols

LSD holder

  • High returns with low risk

  • Reduce the cost of staking and using LSD assets

  • Gain DeFi yield exposure by retaining liquidity in their assets

  • Providing deeper liquidity for LSD assets

  • Providing a composable DeFi ecosystem for LSD assets

LSD pledge + leveraged trading + bribery system

Pacman has developed a comprehensive **LSD staking + leverage trading + bribery system by using the share-voting-bribe-leverage-mining process. **LSD staking users can earn interest income and token staking rewards in the ecosystem, as well as receive bribes from other LSD projects.

The model's income comes from interest on loans, subsidies from the protocol to oPAC, bribes from other LSD protocols, and the LSD treasury.

  • **Lending interest:** When LSD assets are added to the lending module, the Pledge-LSD-ETH+ETH leveraged trading pair will be added to the leverage. Users who pledge LSD and ETH can obtain the transaction fees generated by the lending of leveraged trading pairs.

  • **Protocol subsidies for oPAC:** In the early stages of the project, Pacman will provide subsidies to all users in the Stake module to increase the liquidity depth of the protocol. At the same time, users holding vePAC can obtain more protocol income.

  • **Bribes from other LSD protocols:** As more and more LSD-related protocols emerge in the market, they need LSD/ETH liquidity. The Pacman protocol can effectively help them increase initial liquidity. Each protocol can add additional subsidies to a single staking pool in bribes.

  • **LSD Treasury: **Pacman aims to provide investors with sustainable, long-term LSD asset returns while improving asset utilization in the lending module. In addition to ensuring stable loan rates and asset security, Pacman will also launch lock-up products with terms of 7 days, 14 days, and 30 days to further optimize asset utilization.

C&FOO (Controllable and Fungible Ownership Optimization)

PAC is Pacman's native incentive token, which is used to incentivize liquidity providers for Pacman leveraged liquidity mining. Pacman built a ve-tokenomics system based on Curve and FOO (Fungible Ownership Optimization) by using VePAC (Voting Rights Token) and oPAC (Option Token) to reduce the frequency of farm and dump scenarios and provide long-term liquidity.

Pacman Finance is an improvement based on the FOO model. It introduces the Ve (3, 3) governance model to become C&FOO (Controllable and Substitutable Ownership Optimization), eliminating the barriers for users to join governance and improving the reliability of the protocol.

C&FOO innovation:

  • Improve the vePAC model to have trusted governance, a reasonable unlocking mechanism, and native tokenization

  • C&FOO retains the exchange agreement based on PAC tokens and oPAC tokens, imports the formula for variable execution price, and determines the discount rate based on current market conditions

  • Providing discounted IDO investment rates for Ve-Tokens.

Pacman's unique token economics C&FOO advantages:

  • Offering VeTokens is an innovative way to provide fair rewards to early supporters during the VeIDO.

  • oPAC tokens remove the mandatory relationship between token holders.

Tokenomics

  • **veIDO ：** Tokens reserved for VeIDO. The unlocked portion of the tokens will be circulated immediately after the IDO, and the locked portion will be locked in VePAC.

  • **Team:** When the protocol launches, all of the team’s shares will be locked in vePAC for 2 years.

  • Treasury: The Treasury will hold LP tokens of PAC/USDC and PAC/ETH. It is funded by VeIDO, protocol transaction fees, and discounted fees on option tokens.

  • **Liquidity Incentives:** Reserved for liquidity mining.

  • **Airdrop/Marketing:** 3% of the tokens will be airdropped in multiple rounds to early users and early liquidity providers. In addition, 4% of the tokens will be used as rewards for events, marketing, collaboration and other contributors.

BUILD

Unlike ordinary IDO methods, Pacman Finance uses a new lock-up model for the sale of voting lock-up tokens, preventing sell-offs and promoting long-term investment. During the vePAC sale, users can choose the duration they want to lock their tokens. In addition, Pacman Finance sells $vePAC tokens instead of just $PAC tokens, which allows users to control their lock-up period.

vePAC

vePAC is a voting escrow PAC used to vote on governance proposals and measure weight. vePAC is an NFT based on the ERC-721 standard, but it is non-transferable. vePAC is obtained by locking PAC tokens. The longer the user locks, the more vePAC will be obtained, and the vePAC balance will decay over time.

xPAC

xPAC is a tokenized version of vePAC that is locked for 2 years and is also a standard ERC-20 token. Users can freely convert between locked vePAC and xPAC at a 2:1 exchange rate within one year. In addition, xPAC must be converted to vePAC to start receiving protocol income.

opaque

oPAC is a call option token for PAC, allowing holders to buy PAC at a price below the market price. However, unlike regular tokens, oPAC does not expire.

Emissions schedule

Emissions schedule

Token emission will be divided into three phases, with different emission reductions in each phase. 30 million PAC will be distributed over 120 periods, with an exponential decay rate of 10% to 1%.

Roadmap

in progress

  • Review and provide users with a more secure underlying liquidity exchange solution.

  • Optimize leveraged income mining strategies and provide automatic or semi-automatic income strategies.

  • Introducing a reward voting system during each emission period to foster a more engaged community.

Second quarter of 2023

  • Complete basic product development

  • Carry out official project promotion and expand the native Arbitrum DEX project network.

  • Promote and complete VeIDO

Third quarter of 2023

  • Launch of automated leverage strategy products and integration of more Arbitrum projects

  • Launch of semi-automatic funding strategies

  • Launched UniSwap V3 leveraged strategy product

  • Integrate more Arbitrum projects and participate in project governance Q4 2023

  • Launch of Arbitrum Ethereum Liquidity Aggregator

  • Optimize leveraged lending model and increase the capital utilization rate of borrowers

  • Based on financial income funds, provide interest-free loans with ETH as collateral and launch PUSD stablecoin

  • Provide ETH LSD equity re-staking service

First quarter of 2024

  • Conduct AI-based strategy investment and multi-chain implementation

  • Complete multi-chain expansion

  • Establishing affiliates and launching the Project Ambassador Program

  • Launched AI strategy products

Summary

Pacman is the first decentralized leverage yield and liquidity aggregation protocol based on Arbitrum and zkSync. By pairing with ETH, Pacman leverages the liquidity of ETH to centralize funds and significantly improve the capital efficiency of liquidity providers, while Liquidation risk is also mitigated. In addition, Pacman used Curve and FOO protocols to develop an economic system based on vePAC and oPAC, which can reduce the negative impact of mining and dumping behaviors. Users can use ETH as collateral to obtain interest-free loans through Pacman, thereby increasing the utilization of ETH funds in lending.