GIV Exchange: what and why

The original proposal can be found here

Basic Motivation

At its core, GIV Exchange is an investment portfolio that is controlled by holders of the GIV token. While the principle investments are never removed from the portfolio, the interest accrued by the investments is sold off and used according to the wishes of GIV holders. The primary concern of GIV holders is therefore the growth of the investment portfolio and the distribution of the interest.

Growing the Investments Portfolio

The investment portfolio grows in two ways: compounding of interest, and minting GIV tokens.

In order to mint GIV tokens, a contribution needs to be made to the investment portfolio. The growth of the portfolio is calculated, which determines the number of GIV tokens minted. For instance - the rate could be one GIV token minted per 1 percent growth. This means that sequential contributions of the same size will mint decreasing number of GIV tokens.

The portfolio can also grow as the result of compounding interest. There is a mandatory, but small, percentage of accrued interest that must be reinvested in the portfolio.

An AMM designed to donate to the investment portfolio

The primary service that is offered by the GIV Exchange is an Automated Market Maker. This AMM is designed to raise money for the investment portfolio by introducing “slow volatility”.