The Latest Trend in Aggregated Markets: Pencils Protocol – A New DeFi Experience in the Scroll Ecosystem
This report is compiled from online sources, and all data is subject to official announcements.
At the same time, the Pencils Soul NFT event has garnered support from many top Web3 communities, including NOTCOIN, YesCoin, TokenPocket, Coral App, Trusta Labs, Gaxle Quest, ZKPass, and C98 Wallet. Currently, more than 90,000 participants have claimed NFTs, indicating the vitality and cohesion of the Pencils Protocol community.
4. Core Products of Pencils Protocol:
Product 1: Pencils Protocol Farming – Enjoy Multiple Yields and Maximize Your Asset Efficiency Pencils Protocol Farming will initially support the following five asset types:
- ETH (native ETH, WETH, LSDs, LRTs)
- WBTC (BTC collateral tokens compatible with EVM)
- Stablecoins
- Scroll Token (after the Scroll mainnet launch)
- Pencils Protocol Token
When users deposit tokens into the Pencils Protocol Vault, their funds will enter a pool used by borrowers, who can leverage these funds. As depositors, users will earn interest from the interest payments made by the borrowers.
The Pencils Protocol Vault prioritizes the security of user deposits by carefully evaluating the principal of each borrower and imposing strict leverage limits to ensure the safety of user assets.
As depositors, users will enjoy diverse rewards. In addition to earning from dynamic interest rates, users will also receive Pencils (Pencils Protocol points), Scroll points, and other enhanced rewards from Pencils Protocol partners. These rewards provide additional earning opportunities for users' participation in the platform.
In the Pencils Protocol Vault, the APR earned by depositors is determined by a floating interest rate model, similar to the model used in mainstream lending protocols. This model adjusts interest rates based on the availability of funds in the deposit pool, ensuring that depositors are fairly rewarded for their contributions.
- When the deposit pool utilization is high (i.e., most funds are lent out), the interest rate (APR) will rise. Higher APR rewards depositors for providing liquidity during high-demand periods and encourages more users to deposit tokens.
- When utilization is low (indicating a large amount of available funds in the deposit pool), the interest rate will accordingly decrease. This dynamic adjustment helps maintain balance in the ecosystem, preventing excessively high interest rates during periods of low borrowing activity.
By adopting this floating interest rate model, the Pencils Protocol Vault ensures that depositors receive competitive returns on their tokens while promoting a stable and efficient lending environment.
Product 2: Pencils Protocol Vaults – Convenient Leverage Mining, Maximizing Returns While Ensuring Fund Safety (Coming Soon) Pencils Protocol Vaults 1.0 will first integrate with leading DEXs on Scroll, connecting the Vaults pool to the liquidity pools of the DEXs. Users can choose their preferred LP tokens in the Pencils Protocol Vaults pool and flexibly set different leverage multiples. The Vaults contract will automatically allocate the required leverage funds from the Staking deposit pool, meeting users’ pursuit of higher returns and providing a convenient and efficient asset appreciation experience. Interest on the borrowed funds will be automatically deposited and paid to the Staking deposit pool, rewarding depositors. By evaluating the principal and limiting leverage multiples, Vaults ensure the safety of depositors' funds without worrying about liquidation risks.
Early users who actively participate in Vaults will not only receive basic rewards for deposit staking and LP staking but also earn additional high-multiple rewards in Pencils Protocol Token, Pencil Token, DEX Token, and Scroll Token.
Vaults 2.0 will introduce partnerships with leading liquidity re-staking protocols, allowing participating users to enjoy both native re-staking yields and multiple token rewards (including EigenLayer, LRT, Pencils Protocol, DEX, and Scroll). This upgraded integrated reward matrix aims to attract more users and assets.
In the future, Vaults will continue to integrate more high-quality asset products, aiming to become the users’ preferred tool for fund yield management by offering diversified, efficient, and safe asset appreciation channels. These will include on-chain market-neutral strategies, on-chain synthetic yields, and on-chain exotic options.
Product 3: Pencils – The Points System of Pencils Protocol – A Reward System and Proof of Community Support In the Web 3.0 space, the community is everything. Therefore, we are excited to introduce Pencils, our innovative community points system designed to reward and celebrate the most valuable contributors.
Pencils Protocol takes pride in its technical strength—such as human authentication login and other zero-knowledge proof functions, which we provide to developers on Scroll. However, technology is only half the success of any Web3 project. The community supporting the project is likely even more important. Pencils is our fun way of recording those who contribute the most to the community.
Pencils will help calculate future Pencils Protocol token allocations. At the same time, users holding Pencils will receive preferential token allocations in the projects launched by Pencils Protocol. Users will also be able to use Pencils to purchase items and exclusive merchandise in the upcoming Pencils Protocol store.
Four Key Advantages of Pencils: Pencils points will provide holders with multiple privileges, empowering community members with the following capabilities:
- Gain preferential token allocations for future projects launched on Pencils Protocol: purchase quotas for Launch projects at a discounted price.
- Purchase various items, NFTs, and virtual or physical goods through the Pencils Protocol store.
- Gain access to high-leverage positions in Pencils Protocol Vaults.
- Receive priority in Pencils Protocol airdrop opportunities.
5. Tokenomics Model
$DAPP: $DAPP is the core of the Pencils Protocol ecosystem, providing staking rewards, high-leverage privileges, and project allocation opportunities. It can also be used as collateral for trading NFTs and real-world assets (RWA) and will be integrated into DeFi products, supporting liquidity provision and lending services. Users will enjoy fee discounts when using cross-chain bridges (Bridge) and decentralized exchanges (DEX). In addition, Pencils Protocol will periodically conduct $DAPP buybacks and burns to ensure ecosystem transparency.
Utility of $DAPP Tokens: In Pencils Protocol, $DAPP is the system token, primarily used for governance, collateral on auction platforms, and equity mapping of the points system. Notably, it does not pay dividends.
1. Governance: $DAPP enables holders to actively participate in community voting, influencing decisions on development direction, interest rate adjustments, protocol policies, and emergency measures, ensuring a democratic governance structure.
2. Token Staking (Token Farming): To encourage long-term holding and increase community participation, the $DAPP token staking program will launch after the TGE (Token Generation Event). Token holders can stake $DAPP in Pencils Protocol farms to receive $pDAPP, an equity certificate token, at a 1:1 ratio. Additionally, $pDAPP holders can earn subsidies by staking $pDAPP or providing $pDAPP liquidity on decentralized exchanges (DEX).
3. Auction Platform Collateral: When listing assets on the auction platform, sellers are required to stake $DAPP. This staking mechanism serves as a safeguard against malicious activities, with the community overseeing the auction process. If misconduct occurs, the staked $DAPP will be redistributed among community members.
4. Vaults Privileges: Users staking $DAPP in Vaults will accumulate multiple points from Pencils Protocol and its partners, enjoying various benefits. These privileges include higher leverage multiples and priority access to exclusive, limited strategy products.
5. Expansion of Financial Services: Pencils Protocol is committed to integrating $DAPP tokens into various DeFi products. Planned financial solutions include liquidity protocols and lending services, allowing users to optimize their asset allocation by providing liquidity, lending, or participating in staking and earning additional rewards from these activities.
6. Equity Mapping of the Points System: Early adopters of Pencils Protocol will receive Pencils points, which are tied to $DAPP’s equity. These points allow them to access new mining methods and exclusive policies, fostering deeper community involvement and loyalty without the expectation of dividend payments.
7. Virtual Store: In the virtual store, users can use $DAPP as transaction collateral to trade NFTs, real-world assets (RWAs), points, and derivatives, expanding the applicability and utility of their assets within the Pencils Protocol ecosystem.
3. Token Allocation and Vesting Period
1. Rewarding the Community: Early $DAPP Sale on Tokensoft In conjunction with the Tokensoft sale, Pencils Protocol launched multiple events to reward active community members, further enhancing community interaction. The $Dapp sale on Tokensoft has already begun, offering three options: $0.80 (12 months linear unlock, no initial unlock), $1.00 (9 months linear unlock, 20% unlock at TGE), $1.50 (6 months linear unlock, 40% unlock at TGE). Registration and verification will open on September 4 at 10:00 UTC. The sale is on a first-come, first-served basis and will close once the cap is reached.
2. Token Allocation: Below is the token allocation and unlock schedule for Pencils Protocol: 23.9% of the tokens will be released at TGE, with the remaining 96% gradually released over the next 21 months.
6. Overall Evaluation
In terms of user growth, Pencils Protocol has attracted nearly 410,000 active users. The Launch Seasons series and Pencils Soul NFT events have attracted over 50,000 and 90,000 participants, respectively, demonstrating strong community cohesion. Regarding financing, the project completed strategic financing with an $80 million valuation, led by Taisu Ventures. It had previously completed a $2.1 million seed round, with investors including OKX Ventures and Animoca Brands. These funds will support product development and ecosystem construction.
Regarding tokenomics, $DAPP is the core of the Pencils Protocol ecosystem. Notably, only 23% of the tokens were released at TGE, with the remaining portion to be gradually unlocked according to the established schedule. This design ensures the project’s long-term stability and incentivizes early supporters. Overall, with its innovative products, rapidly growing user base, and robust tokenomics model, Pencils Protocol is poised to become a leading platform in the DeFi space and is worth following closely.
Official Website: https://pencilsprotocol.io/
Twitter: https://x.com/pencilsprotocol
TVL: https://defillama.com/protocols/farm
Farming: https://pencilsprotocol.io/farming
Pencils Soul NFT: https://pencilsprotocol.io/soul
$DAPP Launch & Unlock Grand Rewards: https://medium.com/@PencilsProtocol/participate-in-the-dapp-sale-and-enjoy-multiple-grand-rewards-part-i-456cccfe2be2
