🌑Advanced Topics: Apps

Applications of the Shade MetaEngine

Shade Protocol is an array of connected privacy-preserving DeFi applications built on Secret Network. To date, most DeFi ecosystem have a unique token per DeFi primitive built on transparent blockchains. The following problems emerge as a result:

  • Fractured value capture

  • Fractured liquidity

  • Conflicting integration incentives

  • Confusing end-user experiences

  • Lack of privacy

Shade Protocol solves these problems by building a cohesive set of unified apps that make the Shade MetaEngine a powerful lever for growth and sustainability:

  • No new token per application

  • Expand the breadth of apps to decrease protocol costs

  • Expand the breadth of apps to increase utility, fees, and security

  • Utilize fees to build Protocol Owned Liquidity (PoL)

  • Combine and share capital across apps to avoid fractured liquidity

  • Return fees to protocol stakers

  • Prioritize the most efficient form of assets (i.e., staking derivatives)

  • Unify user experiences across all apps

Shade MetaEngine

Enter the Shade MetaEngine - a financial system with a superset of self-referential, privacy-preserving applications sharing value accrual, governance, and interconnected financial functions under a single overarching token that governs Protocol Owned Liquidity (POL) and fees.

DeFi primitives that partake in a larger holistic system with DAO controlled Protocol Owned Liquidity become a Meta Engine (ME) - a sustainable and cohesive set of primitives that become more powerful due to shared incentives, revenue, and liquidity between the participating primitives.

The key component of the Shade MetaEngine is every additional app enhances the system in terms of utility and/or shared liquidity. While many single purpose protocols focus on competing in a broader competitive market, Shade Protocol instead aims to make an entirely self-referential DeFi economy of interwoven applications where each $1 of activity creates a ripple effect across the entire set of Shade apps - all of which is captured and repurposed within the Shade MetaEngine.

The future of Shade's MetaEngine sustainability is intimately tied to the ability of builders to creatively expand the interconnected DeFi offering under one unified user experience.

As a result of the above design decision, the following are empowered by Shade Protocol:

  • Unified value capture

  • Unified liquidity

  • Cohesively aligned integration incentives

  • Simplified end user experience

  • Privacy

Every app launched on Shade Protocol drives 100% of revenue back to the ShadeDAO because there is only one unified token across apps. This decision unifies value capture. Because Shade Protocol apps are cohesively integrated, every product can share and build out liquidity in tandem. This unifies liquidity. Because all of the apps share the same token, ShadeSwap can intimately integrate with ShadeLend and Shade Bonds. This cohesively aligns integration incentives. Shade Protocol is built on Secret Network - powering private smart contracts that protect users' onchain interactions and date. This empowers privacy. Finally, because all of the apps work together and are not competing for users, all of the apps can live on the same website in a cohesive user experience. This simplifies the end user experience.

Imagine a unified user experience — all of the DeFi tools you have come to know and love all living in the same simple UI/UX mobile and web experience. All with privacy by default. All accruing value toward the community.

Shade MetaEngine Roadmap

Due to the interconnectedness of the Shade MetaEngine, finding product market fit for one app can result in increased adoption for all other applications connected through shared functions. Over the long haul, the Shade MetaEngine will encompasses the following set of unified functions and tools that are the cornerstones of modern financial markets:

  • Stable currencies

  • Trading

  • Synthetics

  • Hedging

  • Leverage

  • Forex

  • Lending

  • Bonds

  • Bridging

  • Insurance

  • Asset management platforms

  • Treasury management

  • Privacy

  • Compliance

  • Arbitrage

  • Asset & data interoperability

Self-Referential User Stories

The most important part of the Shade MetaEngine is that it is self-referential, which means each app enhances the rest of the applications owned by the MetaEngine. An example of value generated across a daisy chain of apps can be described with user stories below:

Bob would like to acquire SCRT tokens on Secret Network and then leverage stake. Bob takes the following steps:

  1. Bob bridges ATOM into the Shade App using the Shade IBC bridge (Public Good)

  2. Bob purchases 100 SCRT using ATOM (Trading Fee)

  3. Bob mints 100 stkd-SCRT (Staking Derivative Fee)

  4. Bob locks up 100 stkd-SCRT in ShadeLend (Deposit Fee)

  5. Bob borrows 100 SILK (Interest Fee)

  6. Bob trades 100 SILK for 50 stkd-SCRT (Trading Fee)

  7. Bob locks 50 stkd-SCRT in ShadeLend to mint more Silk

  8. Bob gets liquidated (Liquidation Fee)

  9. Liquidation Arber sells liquidated assets on ShadeSwap (Trading Fee)

In a simple story of Bob interacting with Shade apps, more than 5 different types of fees accrued to the ShadeDAO. However, this is just one example based on Shade's current product suite – as the roadmap matures, the complexity and variation of these examples will evolve with the creativity of Shade users.

More importantly, because all of the applications exist within the same interface, Bob was able to seamlessly interact with a variety of financial services to meet his needs in a way that had better liquidity and utility. The result of improving the user’s experience through a common interface allows Shade’s MetaEngine to capture more parts of a value chain previously fractured across a number of isolated applications.

In order for meaningful MetaEngine results, a MetaEngine needs to provide a service to users that generates economic value which can be shifted around in a way that generates passive utility for the protocol.

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