Initial Open Offering (IOO)
Overview of the MYSO Token (MYT) Initial Open Offering (IOO)
The Initial Open Offering, or IOO, is a novel token distribution mechanism which will allow users to farm MYSO token call options by using either an LST (like rETH), or stablecoin (like USDC) as collateral.
What this means is that users will be able to acquire the newly-launched MYT by pledging tokens as collateral as part of a MYSO loan — they’ll then have the option to either keep or return it prior to some expiry date to reclaim their collateral.
In terms of outcomes, let’s examine two possible scenarios: i) If the MYSO token outperforms the pledged collateral price, users can just keep the MYSO token and default on the loan — any rational user will want to hold on to the MYSO token and forfeit the collateral if the MYSO token is worth more at expiry.
ii) Otherwise, if the MYSO token doesn’t outperform the pledged collateral price, users can simply return the MYSO token and reclaim the pledged collateral.
Example Scenario Say a user wants to pledge 1 mETH (~$3500) as collateral and get access to MYSO tokens as one of the first users of the IOO. They’d now be able to borrow ~16,000 MYSO tokens based on the seed valuation ($0.22 per MYSO token at $22 million seed FDV).
Once a user pledges the mETH collateral, they get immediate access to the MYSO tokens. The MYSO Protocol then technically allows a user to return the MYSO tokens any time before loan expiry and get back all of the pledged collateral.
Let’s say mETH has remained stable over the loan period — if after this time the MYSO token price is above the $0.22 entry price, a rational user would just keep the MYSO tokens and forfeit their mETH collateral.
Otherwise, a user can just return the MYSO token and reclaim their mETH collateral before expiry.
The IOO is an innovative mechanism that blends the permissionless lending/borrowing functionalities of the MYSO Protocol with the possibility for initial token distribution.
As opposed to a simple token sale, users have additional downside protection as they can pay back the MYSO token and reclaim their collateral at any point prior to IOO expiry. They can therefore see how the token is adopted to make a decision to hold/return the token rather than having to buy the token outright.
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