Sapio

Sapio is a protocol for a reserve-backed token. A reserve is a basket of assets held by the protocol.

A Sapio Reserve Token (SRT) represents a share of one reserve. Holders can redeem SRT for their share of the basket.

Governance sets the eligible assets and competition rules. Eligible assets are the assets allowed in a competition.

//Competition uses fixed reference prices

Participants lock SAPIO behind assets they want the reserve to acquire. These participants are proposers.

Sapio sets a reference price for each eligible asset when a competition starts. All positions for the same asset use that fixed reference price.

A checkpoint price is the asset price used for a later payout.

The system also stakes on the current reserve. This position is the system benchmark. It competes with proposers under the same scoring rules.

Together, the stakes set a target mix within the competition's change limit.

Public sellers supply the requested assets first. Proposers must then deliver their assigned remainder by the deadline.

Later performance determines each position's share of the stake pool. The pool contains proposer stakes and the system benchmark stake.

Competitions explains the steps. Participants explains each role and its risks.

//Performance redistributes stake

Asset returns can differ. This chart compares Bitcoin, Ethereum, and gold during one selected period.

The chart illustrates asset returns. It does not test Sapio's performance.

Payouts also depend on stake, delivery, and the other competing positions. Beating the system benchmark does not guarantee a stake profit.

Whether repeated competitions improve the reserve remains an open question.

//The loop

The prediction is the decision. A staked proposal creates an instruction to acquire assets within set limits.

Seller and proposer deliveries determine how much the reserve actually acquires.

Participants can use unlocked payouts in later competitions. Redistribute explains payouts. Security explains the limits of the design.

//Two tokens

SRT represents the reserve claim. SAPIO supports governance and provides the stake used in competition.

SRT fees are a possible future feature. Their details remain undecided.

Tokens explains the two tokens.

//Where to go next

• Why Sapio explains the reason for competition.
• Participants explains how holders, proposers, sellers, and governors take part.
• Parameters explains the settings for each competition.
• The Master Key describes the long-term vision.