# Loan Sharks Whitepaper
> - Loan Sharks Whitepaper
> - Introduction
> - Beginnings
> - The Decentralized Autonomous Organization
> - A Guide to Voting
> - Network Development
> - Development Team
> - Decentralized NFT Options
> - DAO Profit Sharing
> - The Non-Fungible Token
> - Thesis
> - Minting
> - Staking
> - Centralized Power Burning
> - Rarity
> - A Note on Polygon

## Introduction

Loan Sharks is the operating DAO for a suite of decentralized trading products completely owned and developed by the people.

<img src="https://i.imgur.com/DZoNMPH.png" alt="drag-n-drop image">

## Beginnings

The Loan Sharks Team originally met through traditional equity trading, we all fell in love with the intense mental performance required, and we bonded over strategy creation, finance theory, and company evaluations. This passion continues in a new light, while we aim to re-invent the entirety of the trading scene into something controlled by the people, preventing limitations of asset purchases by companies with corrupt business practices. One by one, all of modern-day trading will be turned into fully on-chain peer to peer commitments facilitated by self-sustaining utility contracts. The creation of different on-chain trading methods will be prioritized by holders of the Loan Sharks NFT via our voting system.

## The Decentralized Autonomous Organization

:::info
### Roadmap
- [x] **Initialize - Q1 2022**
- [x] Publish Whitepaper
- [X] Initialize social media presense
- [x] Launch website
- [ ] Launch Loan Sharks NFT smart contracts
- [ ] Launch $LFBLD smart contract
- [ ] Enable staking
- [ ] Public release
- [ ] List on OpenSea
- [ ] **DAO - Q2 2022**
- [ ] List $LFBLD on a DEX
- [ ] Launch voting contracts
- [ ] Launch profit sharing contract
- [ ] Launch decentralized NFT options for top NFT's.
- [ ] Officially begin DAO cycle
- [ ] Project submissions by Loan Shark holders
- [ ] Developer Vote
- [ ] Final DAO Vote
- [ ] Develop DAO voted project
- [ ] Market project using funds allocated by the Loan Sharks DAO
- [ ] Publicly release project
- [ ] Network pays developers via smart contracts
- [ ] Profits realized by Loan Shark holders
:::

### A Guide to Voting
Loan Sharks will control the direction of project development via NFT holders' votes and developer sentiment. Each Loan Shark gives its owner exclusive voting rights, as well as idea submission rights.

A voting period is made up of a Submissions Phase, followed by a Voting Phase. The Submission Phase will contain the community's suggestions for projects, and Loan Shark holders can either submit their project idea or support the project idea of another Loan Shark holder. At the end of the submission phase, the submissions with support from both the community as well as the development team will be entered into the voting phase. In this voting phase, Loan Shark holders will vote for their favorite project idea; a winning idea will be chosen after receiving an exact majority of total votes. Since the total supply of Loan Sharks is 7500, if all holders vote, a project will need to receive 3751 votes to win. Until this majority is reached, the project with the lowest amount of votes will be omitted and the voting phase will begin again, repeating until a decision is made. If a perfect split exists, a Loan Shark holder will be chosen at random to break the tie.

Voting periods will alternate between Core Focus, and Feature Focus, in Core Focus the theme of the submissions will be limited to projects relating to our main goal of creating decentralized trading. Feature Focus will be open to all other submissions, with no theme limitation. The Focus will alternate upon completion of each project.

### Network Development
To encourage community development within the Loan Sharks DAO. There will be an automated profit sharing smart contract for all developers who assist with projects built in the Loan Sharks Network. Developers work will be vetted, by DAO determined validators, before being officially committed to the profit sharing contract.

### Development Team
Developers also have an important role within the network to help determine what Loan Shark DAO ideas make it into the project pipeline. With regard to our voter's preferred submissions, the development team will select ideas to enter into the final vote. This is a major step in preventing any ideas with ill intent from diminishing the Loan Shark DAO value. Loan Shark Holders will have the final say in picking the specific submission we pursue.

### DAO Profit Sharing

Each project that we complete, unless exclusively used by Loan Shark holders, will contain a user’s fee. Approximately 50% of this user’s fee will go into the Loan Sharks bank, with the other 50% going toward project upkeep costs. The Loan Sharks bank is a direct representation of your NFT’s value. Holders have the ability sell an NFT to the bank at any time for your percentage of profits from all Loan Shark endeavors. Each of the 7500 NFTs provide you with ownership of 0.013% of the Loan Sharks bank.

### Decentralized NFT Options

Until we begin the first voting period, our development focus is going to be geared toward creating an NFT options market, where users can make capital commitments to predicted movements in their favorite collection’s value. This will be achieved by our own on-chain financial data generation, along with our own fully on-chain peer to peer trade contract.

Example:
Collection - The floor price of Crypto Punks is $50.

#### User 1:
Predicts a floor price of $85 by the time of close. User 1 chooses a capital commitment of $100.

> ##### *Contract is opened, and awaiting a User 2*

#### User 2:
Predicts the floor price will be below $85 by the contract’s close, User 2’s capital commitment is determined by our own on-chain data and the contract’s worth (currently the amount of User 1’s $100). Let’s assume the contract requires a $45 commitment from User 2.

Option Contract - 7 Day Lifespan, $50 Collection Price at open. This contract is worth $145 (the sum of the capital commitment from each User), $85 Collection Price Requirement to pay User 1 the total contract’s worth.

> ##### *Close day arrives*

The price movement of the Loan Shark’s floor price is checked by the contract; if the collection has moved by at least the amount User 1 has predicted, User 1 will receive the contract’s value of $145. If the price has not moved by User 1’s predicted amount, User 2 will receive the contract’s worth.

## NFT

### Thesis

We want owners of the DAO to also enjoy their voting rights visually. This is why Loan Sharks takes pride in being completely on-chain. Meaning that all functionality, images, and metadata are generated and hosted all on the Polygon blockchain. We do this through multiple custom solutions to overcome the problems of storing data on the blockchain. We use multiple in-house encoding algorithms to define the data for each trait. These algorithms coupled with our SVG rendering contract results in a practical yet beautiful on-chain NFT.

<img src="https://i.imgur.com/WtMVjHj.gif" alt="drag-n-drop image" class="" data-position="940" data-size="53" loading="lazy">

### Minting
The total supply (voting rights) is hard capped at 7500. We believe this is large enough to allow for a diverse community, yet small enough to have value in each NFT. The cost to mint is 125 MATIC with 20 NFT's reserved for the developers. A 5% royalty will be withheld from secondary sales that go into a Loan Sharks smart contract and distributed automatically to pertinent developers of the Loan Sharks DAO, for their work on expanding the network.

### Staking
In order to lock liquidity and to discourage immediate resale of the Loan Sharks NFT, staking will be implemented in an ERC-20 token `$LFBLD`, deployed alongside the contracts. This token will initially be used to update the name, description, and background of their Loan Shark along with an option for an owner to reroll the traits of their Loan Shark NFT once. For now, this is the total use case of the`$LFBLD` token. However, `$LFBLD` is under the jurisdiction of the Loan Sharks DAO. Thus, it's entirely possible for the network to create new use cases for the token.

### Centralized Power Burning
The developers of Loan Sharks want to stress the importance of true decentralization. That is why once the contracts are launched there is a hard-coded timer that begins. Once that timer runs out, all owner-only functions will be 100% locked. Making the contracts truly decentralized, which further secures the power of the DAO.

### Rarity
Rarity is defined by different tiers for our items in each trait. The Body, Eyes, Hat, and Mouth are all subject to our rarity system, while the background and species are not. All items in a specific trait appear in a pool of sorts, where the number of times an item appears represents the rarity level of said item. If one item appears 3 times, while another appears only once, you are less likely to receive the item with one appearance than you are the item with three appearances. Below is a list of each trait’s items, along with the amount of appearances they have in their trait’s pool. A higher number represents a more common item. Although it may seem that items overall are not difficult to obtain, the compounding dilution of the ability to roll rare items is monumental and trait items with a 1 are extremely rare.

Body:
    Yellow Red Scarf - 3
    Red Scarf - 3
    Green Purple Scarf - 3
    Red Tie - 3
    Yellow Inner Tube - 1

    Red Bow Tie - 2
    Green Inner Tube - 2
    Rainbow Tie - 2
    Rough Shark - 2
    Blood - 2

    Buff Shark - 1
    Purple Inner Tube - 1
    Shark Biting - 1
    Camera - 1

Eyes: 
    Default - 3
    Long - 3
    Sad - 3
    Straight - 3
    Angry - 3
    Chill - 3
    Overly Relaxed - 3

    Scar - 2
    Looking Up - 2
    Closed - 2
    SUS - 2  
    Edgy - 2
    Uncanny - 2
    Googly - 2

    Angry Red - 1
    Evil - 1
    Possessed - 1
    Very Suspect - 1
    Fire - 1

Hat:
    Black Porkpie - 3
    Bronze Porkpie - 3
    Grey Porkpie - 3
    Fedora - 3
    Bowler - 3
    Beret - 3
    Desperado - 3
    Gent Hat - 3
    Striped Top Hat - 3
    Black Top Hat - 3

    Fez - 2
    Doug - 2
    Party Hat - 2
    Paper Boat Hat - 2
    Pirate Hat - 2
    Sailor Hat - 2
    Steampunk - 2
    Leprechaun - 2
    Robinhood - 2
    Chef Hat - 2

    Traffic Cone - 1
    Narwhal Horn - 1
    Cutlass - 1
    Crown - 1
    Rubber Ducky - 1

Mouth:
    Crooked - 3
    Default - 3
    Goof - 3
    Grin - 3
    Grumpy - 3 

    Black Mustache - 2
    Brown Mustache - 2
    Devil Stache - 2
    Kelpstache - 2
    Menacing - 2

    Cigar - 1
    Pipe - 1
    Grillz - 1
    Disguise - 1
    Hook - 1

### A Note On Polygon
When determining the blockchain to build Loan Sharks on top of, Ethereum seemed to be the obvious choice at first. It is the industry standard for NFTs and smart contracts. However, after further developing the core of Loan Sharks: the gas fees involved to execute our goals made it unfeasible to deploy onto Ethereum. We wanted it to be accessible to as many people as possible. Enter Polygon: the gas fees, transaction throughput, and Ethereum compatibility made it the best option for everyone involved.
#### Connect
[Website](https://loansharksdao.com)
[Discord](https://discord.com/invite/QuCbMZa6hV)
[Twitter](https://twitter.com/LoanSharksNFT)