Analysis of Themis Protocol's Dual Token Economic Model on Blast L2

Recently, the decentralized derivatives protocol Themis announced its official launch on Blast L2 and introduced a new token and economic model, injecting new vitality into the decentralized derivatives track. The Themis Protocol conducted its IDO on its official website on May 13, reaching its hard cap of 625 ETH in just 15 days, with subscription amounts exceeding 2.4 million USD. This article will provide a detailed introduction to the dual-token economic model of Themis Protocol (Blast L2), including the governance token $THS and the contribution value token $SC.

Themis Overview

Themis Protocol is a decentralized derivatives trading platform built on Blast L2, aimed at providing an efficient, secure, and transparent perpetual trading environment to attract more users to participate in the decentralized financial market and offer incentives and value capture. The dual Token economic model of Themis (Blast L2) is an important component of this.

In the decentralized finance market, the economic model is crucial for the success of a project. It not only determines the project's Token distribution and incentive mechanisms but also affects the project's long-term development and market performance. An excellent economic model can attract more investors and users, driving the project's rapid growth.

Governance Token THS

THS is the governance Token of Themis Protocol, with a maximum supply of 10M coins. The main purpose of THS is to serve as the voting power for platform governance, as well as the primary value storage point for various revenue streams from the protocol's derivatives exchange.

$THS is an asset-backed cryptocurrency, with each $THS minted by the Themis treasury at the rate of 1 THS for 1 dollar, and a 10% minting tax will be charged for each minting of $THS.

THS's minting and issuance

The issuance and minting process of THS is closely related to the development history of Themis. In the early stages of the project, the genesis minting was conducted through an IDO, with a total of 333,333 THS. Among them, 33,333 THS (10%) were allocated as a minting tax, and 300,000 THS (90%) were used for IDO distribution and to add initial liquidity. The IDO price was 0.0025 ETH, and the initial listing price was 0.0031 ETH.

Except for the THS minted during the genesis, subsequent issuance of THS can only be minted through bond sales. By selling LP bonds, the treasury holds 100% liquidity of the THS-ETH trading pool.

The minting tax of THS is used for the technical development and maintenance of the protocol, rewards for community node users, and the development fund. Over time, the actual circulation of early THS will gradually increase, but due to various factors such as the value of treasury assets, the price of THS, and the profitability of positions on derivatives exchanges, it will enter a deflationary phase in the middle and later stages, with its actual circulation far below 10M coins.

The risk-free value of treasury assets ( Treasury-RFV ) (measured in USD) is the minting limit of THS.

circulation of THS

1. THS holders can earn staking rewards by staking THS at each Rebase period:

The earnings from staking THS will increase in a compound interest form as sTHS. Staking can be unstaked at any time, but the compound interest earnings cannot be obtained immediately and will be released in equal amounts over 180 days according to the blocks. The release speed can be accelerated to a maximum of 30 days by burning SC.

2. Users can also purchase LP bonds by adding liquidity to the THS-ETH LP, obtaining THS minted by the treasury. When users purchase LP bonds and fully stake the THS, they will receive an additional 5% THS Token reward.

The above are the two ways THS increases circulation, with the increased circulation coming from the treasury minting.

THS destruction and rights

The governance Token THS has a close relationship with the derivatives exchange tbTrade. The treasury serves as the short-term counterparty for all trades on tbTrade, while THS acts as the long-term counterparty. Therefore, THS has a strong value capture capability. In the long term, THS will be in a deflationary state, and the price performance of THS will also outperform similar products.

In most cases, traders incur losses, with 35% of the profits from the treasury positions deposited into the national treasury as reserves for minting THS, and 55% of the profits from the treasury positions used for repurchasing and burning THS. The circulating supply of THS decreases, and the price rises. In extreme cases, when traders are profitable and the collateralization ratio of ETH is less than 100%, the treasury contract activates the reserve funds to mint THS, which is then sold to fill the gap in the treasury's ETH pool.

The ability of a Token to capture the value of the project itself determines the success of the project's token economic design, and 25% of the trading fees from the derivatives exchange tbTrade will be returned to THS stakers, meaning that THS stakers can earn this portion of trading fee revenue in addition to their staking rewards.

Many DeFi protocols have a weak correlation between the governance tokens and the value of the protocol itself, leading to poor value capture ability of the governance tokens and thus unsatisfactory price performance. However, THS effectively avoids this issue.

Contribution Value Token SC

SC is the protocol contribution value Token of Themis Protocol, with a theoretical maximum supply of 1 billion pieces. Its main purpose is to reward those who contribute to the growth of protocol users, and it can also serve as a burning mechanism to accelerate the release of THS staking rewards.

The SC Genesis phase will issue 1,000,000 tokens, which will be used for specific phase airdrops and rewards. Apart from the SC issued during the Genesis phase, other SCs are minted by the protocol, which establishes an initial treasury of 10,000 USDB for SC.

SC's minting and issuance increase

SC is minted by users who stake THS, and the minting will consume USDB. The minted SC is rewarded to those who contribute to the growth of the protocol users. The process of minting SC will cause the price of SC to rise.

THS stakers need to spend an additional 20% (USDB) of the value of the staked THS to mint SC Tokens in order to earn a high compound return of 0.2% every 8 hours. The minted funds enter the USDB treasury, with 5% of the minted SC allocated as a protocol development fund, and the remaining 95% will be rewarded to the referrers and node users.

The usage ratio of $SC minting funds ( is a dynamic variable, initially set at 66%. For every increase of 5 million SC in total supply, the usage ratio decreases by 2%, with a minimum usage ratio of 50%, which occurs when the total supply of SC reaches 40 million.

New SC minting amount = (Minting funds * Fund utilization rate) / SC price

SC price = Total value of USDB vault / SC circulation

Due to the existence of fund utilization rates, the increase in the USDB treasury will always be faster than the issuance speed of SC. The larger the issuance of SC, the faster the USDB treasury increases. Therefore, minting and issuing SC will cause the price of SC to rise increasingly.

) SC redemption and burning

Users who hold SC can accelerate the release speed of staking THS rewards by burning SC. This process destroys SC, so burning SC to accelerate the release of THS staking rewards will lead to an increase in the price of SC.

In addition, users can redeem SC for USDB from the USDB vault at real-time prices. There will be a 15% redemption tax for redeeming SC for USDB, and the redemption tax will remain in the USDB vault. When users redeem SC, the total supply of SC decreases at a faster rate than the decrease in the USDB vault, thus the redemption process will also cause the price of SC to rise.

Therefore, the SC Token is a model of unilateral continuous increase. In summary: minting SC, burning SC, and redeeming SC for USDB will all cause the price of SC to continuously rise. The optimization of the SC model is an important innovation after the migration of the Themis protocol to Blast, and this mechanism will play a significant role in the launch of the protocol and subsequent user growth.

![What is the charm of Themis Protocol, which completed 625 ETH in IDO fundraising in 15 days and is about to deploy Blast L2?]###https://img-cdn.gateio.im/webp-social/moments-e6f5981ac984aaa5bd94412e0d0d4505.webp(

Dual-Currency Economic Model

The governance token THS and the protocol contribution token SC play different roles in the economic model of Themis (Blast L2). They are interdependent and mutually reinforcing, and together they will drive the development and prosperity of the platform. Specifically, there are several aspects:

1. Injecting funds and liquidity into the protocol: The minting and circulation of THS and SC can bring more funds and liquidity to the Themis treasury and vault, promoting the development and prosperity of the platform.

2. Maintain the stability and balance of the platform: The reward mechanism of the contribution value Token SC and the destruction mechanism that accelerates the release of THS staking returns promote the positive cycle of the protocol, thereby maintaining the stability and balance of the platform.

3. Enhance transparency and fairness: The minting and circulation of THS and SC are completely executed on-chain through smart contracts, ensuring fairness and impartiality.

![What is the charm of Themis Protocol, which completed 625 ETH of IDO fundraising in 15 days and is about to deploy Blast L2?])https://img-cdn.gateio.im/webp-social/moments-6de7fe0990b880d869a225d720832177.webp(

Summary

The dual-token economic model of Themis (Blast L2) is an important component of its decentralized derivatives trading platform. The interaction and influence of the two tokens, THS and SC, will jointly drive the development and prosperity of the platform.

THS serves as a governance Token, providing support for the governance and development of the platform, while also acting as a reward mechanism to incentivize users to participate in the construction and development of the platform. SC serves as a contribution value Token, used to reward those who contribute to the growth of protocol users, and it can also act as a burning mechanism to accelerate the release of THS staking rewards. The interaction between THS and SC achieves economic balance within the protocol, while also enhancing the platform's transparency and fairness, protecting users' interests and rights.

![What is the charm of Themis Protocol, which completed 625 ETH in IDO fundraising in 15 days and is about to deploy Blast L2?])https://img-cdn.gateio.im/webp-social/moments-6e10019165679a4d46267cc55b83e076.webp(