Guzzolene Finance

Filling the liquidity demands of Abacus

Abstract

Abacus is a novel NFT valuation system. Not even launched yet, Abacus has kickstarted a new
MetaFi building season and already amassed over 30 partners aiming to build on top of it. These
protocols will use Abacus’ appraising services for lending, insurance, and increasing capital
efficiency. Therefore we expect a lot of pressure on Abacus fulfilling its purpose to appraise
NFTs. By creating liquidity rails for the Abacus mechanism, Guzzolene can leverage this high
demand for spot pool liquidity and successfully oil up the Abacus engines.
 Background

Abacus aims to be an NFT valuation system that uses optimistic proof-of-stake to create liquid-
backed valuations. Traders act as validators by staking their ETH in different valuation tranches.
The valuation of the NFT is computed as the aggregation of all the liquidity locked in the pool at
any point in time. Validator honesty is ensured because if a pool closes, the liquidity in the pool
is sent to the NFT owner and the validators receive the proceeds of an immediate NFT auction
which is distributed in a FIFO manner.

Abacus presents several mechanisms that can be leveraged to create a continuous source of
income. On top of that, as the ecosystem grows and more protocols build on top of it, new
opportunities will flourish.

System Design

Guzzolene Finance aims to become an Abacus Spot liquidity bootstrapping tool. Guzzolene will
leverage its treasury by offering liquidity-as-a-service to any protocols, collections, or
communities in control of a substantial NFT possession. By becoming Abacus’ Market Maker,
Guzzolene expects to benefit from NFT capital efficiency, insurance, and lending activity to
create a liquidity flywheel.

The Ecosystem Tokens

The Guzzolene ecosystem will be composed by the following tokens:

- GDN: the native token of Guzzolene which is backed by ABC and ETH in Guzzolene’s
Treasury.
- sGDN: staked GDN that gives its holders governance rights and a share of protocol
revenue
- gdnABC: tokenized ABC that can be minted at an exchange rate of 1:1. Whenever a user
mints gdnABC, Guzzolene stakes and locks for governance the equivalent amount of
ABC forever. gdnABC gives its stakers the same benefits as staked ABC + Abacus
governance but without having to lock their tokens.
Benefits of the described tokens:
- GDN: stakers will receive a share of the yield generated by the protocol. Rewards will be
paid out in gdnABC. On top of that, stakers will receive GDN rewards.
- gdnABC: similar to GDN stakers, gdnABC will have the same benefit as GDN stakers,
but will also acquire a bigger share of the protocol revenue.

The Treasury

Guzzolene will continuously grow its treasury by offering GDN bonds. Users are able to bond
ABC and ETH to the treasury in exchange for discounted and vested GDN.

The treasury mainly holds ETH and ABC, the two tokens that will rule the Abacus ecosystem.
Guzzolene will take advantage of its treasury size to positively influence the ecosystem and
maximize yield.

Liquidity matters

As an ABC blackhole and liquidity tool, Guzzolene will benefit from certain advantages.

- Bribes from collections and protocols that seek liquidity on specific pools(via Abacus,
Hidden Hand and Protocol2Protocol Deals).
- Bribes from collections that seek to receive gauge boosts and other Abacus governance
bribes.
- Staked ABC rewards in the form of ETH.
- Boosts when bonding ETH into Abacus. Unlike most market participants, Guzzolene will
be able to receive the max boost by bonding amounts equal to or bigger than 100 ETH.
- ETH rewards earned in pool auctions, from those underpriced pools where the auction
ends up in a profit for LPs.
- ETH profits from selling Spot positions on the secondary market.
- Abacus Spot Pool position trading, where we sell advantageous spot pool positions at a
premium
- We’re also exploring the possibility of writing puts for NFTs in Abacus Spot Pools we’re not part
of
Note: To further increase its revenue streams, Guzzolene will consider creating an Abacus
Ecosystem Fund. A low-risk investment/yield fund set to operate mainly around projects related
to the Abacus space.

System mechanics

Figure 1. Diagram showcasing the system mechanics.

Implications
Guzzolene will drive demand for ABC tokens as well as become an ABC sink. This behavior
will positively impact the Abacus ecosystem.

Thanks to Guzzolene, small investors will be able to benefit from an economy of scale effect.
Unlocking new yield sources and enabling strategies that otherwise wouldn’t be accessible to
small market participants.

NFT protocols and collections will also benefit from Guzzolene’s activities. Thanks to
Guzzolene, these market participants will be able to direct liquidity to their corresponding
Abacus pools and then take insurance or get loans on their NFTs.
 Vision

For the longevity of a protocol we consider a long term vision is necessary for building
something more quantifiable and towards clearer milestones.

We believe Guzzolene should be run as a business first and we will focus on deals that will be
advantageous for our Treasury and for the Abacus Ecosystem as a whole.

Partnerships

Partnerships with Abacus and the protocols revolving around it provide a substantial advantage
and are a key factor when it comes to the viability of the Guzzolene Protocol.

Figure 2. Image showcasing the dynamic of the ParagonsDAO partnership

In Conclusion

Guzzolene Finance is a leveraged play on the Abacus ecosystem. Guzzolene aims to be one of
the biggest and most influential players in the Abacus network. The protocol will always be
aligned with Abacus’ vision, and will also try to cause a positive impact on the ecosystem.