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The Standard Token (TST)
Standard Tokens are governance ERC-20 tokens that are native to the Standard Protocol.
A total of 1 billion Standard Token has been minted through the Ethereum blockchain.
The Standard Token is the governance token the Standard Protocol and the community of Standard Token holders form a decentralized autonomous organization that votes on the key decision of the platform.
You can acquire Standard Token (TST) during the initial distribution phases or on secondary markets (to be announced).
Yes, the Standard token is used by its holders to vote on a number of different topics like the protocol's stability fee.
Multiple subjects, such as: the stability fee, the main mechanism used to stabilize the Euro Standard price; new features, like new collaterals; due-diligence requirements for hard asset custodians, and emergency shutdowns to freeze the system in the event of bad actors or severe markets.
The primary responsibility of Standard holders is to govern the protocol.
There is a mathimatical cap of 1 billion Standard Token (1,000,000,000 TST) No more will ever exist. The Standard DAO, has full control of the treasury and it's income from stability fees. The DAO can choose to burn income in which case the supply will slowly decrease for ever. The DAO could also decide to airdrop any coins to all Standard token holders, use it for marketing or anything the community decides.
DAO / Voting
The Standard DAO is a decentralized autonomous organization, responsible for governing and growing the platform.
It consists of the community of Standard Token holders who can manage the entire ecosystem by making key decisions utilizing smart voting mechanisms and/or prediction markets.
Yes, they are, provided their Standard Tokens are placed in the platform’s native wallet (or a compatible wallet).
Token holders who store their Standard Token in external wallets will not be able to participate in the voting mechanism.
Every token enables token holders to place one vote on one voting subject. Voting power is proportional to the number of tokens held. Token holders can place votes on various subjects at the same time.
For example, if a user holds 100 Standard Tokens, the user can place 100 votes on each and all open subjects.
The initial voting subjects are: Stability Fee, adding and changing features, native custodians, DAO Standard Token Treasury and an emergency shutdown.
Standard Token holders can create proposals that improve the protocol. The Standard DAO has an underlying management system for voting on the proposals that differentiates between three proposal statuses:
Active proposal: If at least 20% of Standard Tokens registered on the voting system vote for a proposal to be approved, it changes its status and becomes an “Active Proposal”.
Upcoming proposals have not reached the 20% mark and are therefore not active.
Closed proposals status is achieved once votes have been casted, the voting time has expired, and a voting result has been achieved.
In the future, a prediction market system is planned as part of the protocol’s governance mechanism. A prediction market mechanism will be used as an information tool for voters to find the best interest rate to peg the Standard Euro value to the Euro.
It is the goal of the platform to progressively replace parts of the voting mechanism with prediction markets. A prediction market was chosen over a simple voting mechanism for two reasons:
- To solve the problem of voter apathy and low voter turnouts
- Prediction markets are backed by a large amount of academic research stating that they are the most accurate mechanism to determine the outcome of future events
Standard Euro (sEUR)
Standard Euro (S-EURO) is an algorithmic stable coin that is backed by fungible assets and soft pegged to the Euro.
Standard Euro is generated by leveraging a variety of fungible assets as collateral in a smart contract called a Smart Vault, unlocking its stored value.
Standard Euro can also be sent and received peer-to-peer using compatible wallets.
Additionally, Standard Euro can be acquired on secondary markets and cryptocurrency exchanges.
The liquidation of a Smart Vault is the process in which a generated amount of Standard Euro gets repurchased by automatically liquidating a Smart Vault's collateral.
The different minimum collateral levels are determined through a voting mechanism of the Standard token holders. Borrowers are incentivized to over-collateralize Smart Vaults to prevent liquidation.
This process plays a critical role in the price stability of Euro Standard as it ensures that the appropriate amount of collateral always backs the generated Euro Standard.
A Smart Vault gets liquidated when its collateral value falls below the minimum required level of collateral value. The collateral assets may differ in the minimum necessary collateral levels. The more volatile an asset is, the higher the required collateral level will be.
The minimum collateralization levels of the different assets supported by the protocol get determined through a voting mechanism of Standard token holders. Once a Smart Vault is created, the minimum collateralization level of the Smart Vault cannot be altered.
A Smart Vault is a smart contract in which users lock up tangible and intangible assets as collateral to generate Standard Euro.
Public and native tokens that have been approved by the Standard token holders' community, the Standard DAO.
Public tokens are cryptocurrencies that can be used as collateral in Smart Vaults, if they've been approved by the Standard token holders' community. Such tokens may be backed by assets or a centralized organization. Public tokens can be withdrawn from the Standard Protocol. Examples of a public token are Ethereum, Pax Gold, Standard token or the Standard Euro stablecoin.
Both native and public tokens need to be approved by the Standard Token community. While the onboarding process for public tokens can be simpler, native tokens face stricter onboarding requirements, as well as more technical development.
Native tokens are backed by assets that require a centralized organization like a vaulting facility. All native tokens are created by the Protocol's native custodians.
The Protocol has built-in functions that enable native custodians to tokenize their assets. Each native custodian is subject to a first time and periodical audit by the Standard DAO. Audit protocols might change, depending on the vote of the DAO.
The stability fee is the main mechanism used to stabilize the Standard Euro price and is paid automatically by Smart Vault owners. The initial stability fee will be set at 0.25% per annum of the Standard Euro generated by a smart vault owner. The Standard Token holders will have the ability to vote on changing the stability fee, depending on the peg of the Standard -Euro to the Euro.
The collateral rates are percentual fees that creditors pay on the generated Standard Euro. The protocol differentiates between two types:
- Storage Fee: The storage fee varies amongst the different asset/tokens and is set by each custodian. Digital assets without the need of vaulting facilities will not be subject to storage fees. The storage fee should cover the underlying demurrage of holding the physical assets, in particular vaulting costs, security, insurance and auditing.
- Stability Fee: The stability fee resembles the interest rate in central banking which is used to control the supply and demand of fiat currencies. The protocol will use the same mechanism for Standard Euro to keep a soft peg to the Euro price. The stability rate will be determined on a weekly basis by the Standard token holders through a voting mechanism.
By paying the stability fee in Standard Tokens, the fee is reduced by 50%. Standard Tokens that are used to pay the stability fee become part of the reserve. This reserve is called Treasury and is entirely managed by the DAO who decides what happens to the accumulated Standard Tokens.
Further, if the stability fee gets paid in Standard Tokens, 20% of the Standard Tokens goes towards the compensation of active voters, 30% goes towards the compensation of prediction market participants and the remaining 50% becomes part of the reserve.
The whitepaper explains the Stability Fee in detail. Download the latest version here.
Custodians are parties that register with the Protocol’s online platform to become an official “Standard Custodian”. Custodians of assets are approved by Standard Token holders via a voting mechanism. The entity registering to be a custodian must go through a vetting process similar to KYC/AML checks before being approved by Standard Token holders. Bullion providers looking to join the network must apply to the Standard DAO. If they pass a set of conditions decided by the Standard DAO community, a set of access keys is issued.
Independent Custodians are tokenized asset providers who have issued their own asset backed tokens.
It is the responsibility of The Standard DAO to set the security standards and audit the physical vaulting facilities of independent custodians. Once the DAO’s security criteria have been met, the protocol will onboard independent custodian tokens that can be used as collateral in Smart Vaults.
Native custodians are usually precious metals dealers or asset vaulting providers who are experts in securing and dealing with hard assets. Such custodians have legal contracts with the Standard DAO to ensure compliance with its custodian security framework. Users can access their vaulted assets balances via the Standard Protocol platform.
A Native Custodian uses the Standard Protocol to tokenize the assets within the platform. These tokens cannot be withdrawn from the platform. Instead they provide a secure accounting mechanism between the Smart Vaults and the hard asset custodians.
Alice is a customer of a custodian - XYZ Bullion Limited (XYZ). Her XYZ account has five kilos of gold in the vault. Alice decides to generate Standard Euro by placing her gold in a Smart Vault (a mechanism similar to a Collateralized Debt Position).
The process of converting her gold to S-Euro is fully automated and only requires Alice to connect her wallet to the custodian. The custodian then calls the Standard.io Protocol’s API and credits Alice’s Smart Vault with tokenized gold as collateral. Alice has access to S-Euro within seconds.
The Standard dashboard is an easy-to-use interface that enables you to control your Smart Vaults and participate in the governance of the Standard Protocol by: managing collaterals, opening, closing and managing Smart Vaults and much more.
One of the essential components of centralized collateral assets is transparency. The Glass Books Transparency Protocol will interface between the physical and blockchain space and prove the underlying asset is truly purchased and sitting in the vaulting facility. (Find out more)