At-a-Glance

Project

• Project Summary: The Spool Protocol serves as DeFi middleware that allows users to participate in a subset of yield generating protocols in a risk diversified, automatically managed, and efficient fashion. 

• Founded: April 2020

• Website: https://www.spool.fi/ 

• Team Size: 14

• Stage: Growth. Live on mainnet as of April 2022.

• Whitepaper - https://docs.spool.fi/ 

Token

• Symbol: SPOOL

• Function: $SPOOL serves as a DAO governance and incentive token

• CMC listing: https://coinmarketcap.com/currencies/spool-dao/ 

• Circulating Supply: 25,303,557 

• Maximum Supply: 210,000,000.00 

• Market Cap: $14,524,532

• FDV: $120,519,000

Table of Contents

• At-a-Glance

  • Project

  • Token

• Table of Contents

• Summary

• Project Overview

  • Market Opportunity

• Token & Tokenomics

  • Utility

  • Tokenomics

• Founders / Key Team Members

• Notable Partners

• Technical Development

  • Roadmap

  • Contract Audits

• Fundraising / Financial

• Traction / Community / Media

  • Social Media

  • News

• Disclaimers

Summary

Spool is a DeFi middleware platform that offers composability and permissionless access to diversified yield generation strategies. It facilitates the connection between capital aggregators and DeFi yield generators, allowing for efficient and dynamic allocation of funds. With Spool, custom strategies managed by DAO-curated risk models can be optimized for yields, automatically and seamlessly. 

In its most basic form, the Spool Ecosystem allows end-users to enjoy DeFi yields on their deposits while minimizing the risk of failure through diversification. Additional benefits are higher yield through cost-less compounding, a more straightforward user experience and curated DeFi Strategies.

Spool was established as a DAO governed project with founding contributors who represent a diverse cross-section of the blockchain community. The DAO is comprised of thought leaders and respected industry figures, who have been tasked with providing careful guidance and support during the formative stages of the DAO. The intention of the DAO is to transition to a more decentralized community-controlled structure as SPOOL Governance Tokens become widely distributed over time.

The project's tokenomics follow an established revenue-sharing model.. Although their community size is relatively small and engagement levels are currently low, there is a huge amount of experience and knowledge from the contributors who appear dedicated to growth and have a clear focus on delivering their commitments. 

With a strong foundation and team in place, the project has the resources to execute on its plan. As is often the case in DeFi, success will depend on Spool’s ability to attract investors and increase its TVL..

Project Overview

The Spool Finance ecosystem includes:

• Spool Protocol - The Spool Protocol consists of all Smart Contracts that make Spool a usable Decentralized Finance product.

• A Spool Smart Vault - A Spool Smart Vault is most easily defined as a new form of "vault". 

• SPOOL Token - The SPOOL Token is the token fueling the Spool Ecosystem.

• voSPOOL Token - The voSPOOL Token is the voting and governance token in the Spool Ecosystem.

Market Opportunity

As a token whose value is largely defined by its revenue sharing functionality, the success of the SPOOL token will be intrinsically linked to the success of the Spool protocol. As with most DeFi yield aggregators, the Spool protocol’s success can be tied to its TVL. According to DeFi Llama at the time of writing, Spool has $13.7M in TVL, with over 99% of that on Ethereum (Spool is also available on Arbitrum). A steady decline in Spool’s TVL through 2022 largely mirrors that experienced by DeFi protocols overall.

Spool protocol TVL and SPOOL token market cap.

In the near future, Spool intends to increase its adoption through the availability of more types of yield generation strategies, greatly expanding the assets which can be deposited to the protocol, and aggressively targeting institutional investors with Spool offerings which adhere to the regulatory requirements of most jurisdictions. See the roadmap section for additional details.

According to DeFi Llama, there are currently 78 yield aggregation protocols with non-zero TVL, of which Spool ranks 15th. The largest yield aggregator, Yearn Finance, currently has $434 million in TVL, suggesting that Spool has much room to grow within the existing field of DeFi yield aggregation. Such growth will depend on its ability to convince DeFi users of its comparative benefits, particularly those surrounding its ability to mitigate risk through diversified yield farming strategies across multiple protocols utilizing a single smart vault. Should it be successful in attracting more traditional institutional investors, Spool could help grow the overall DeFi ecosystem. Furthermore, a recovery in cryptocurrency markets would present an opportunity for Spool, as DeFi TVL was more than three times its current levels at its peak in late 2021.

The Spool protocol takes a 10% performance fee on profits generated by Spool. For the purposes of illustration, if we assume an average yield of 10%, a $100 million TVL would return $1 million to the protocol per year. Similarly, a $1 billion TVL would return $10 million to the protocol per year.

Token & Tokenomics

Utility

The SPOOL Token is a regular ERC20 Token with a maximum supply of 210,000,000.00. The ticker is $SPOOL and it serves as a DAO governance and incentive token for:

Fees/Revenue SPOOL Tokens entitle stakers to 100% of protocol revenue as voted by the DAO. Currently, revenue is split into direct payouts in the form of SPOOL/DAI liquidity (80%) and deposits into the DAO Treasury (20%). Therefore, the foremost Token Utility is protocol revenue capture.

Incentives The Spool DAO can incentivize participants (including itself) via the Spool DAO Treasury and fees.

Risk Model Proposal Risk Model Providers can stake SPOOL Tokens and propose their Risk Model to the DAO. The stake ensures that Risk Models are only proposed by actors who intend to participate in the Protocol in good faith.

Strategy Proposal SPOOL Token Holders can propose new Strategies to the DAO. After their submitted proposal has been passed successfully these Strategies become available for utilization within the Spool Ecosystem.

voSPOOL SPOOL Tokens are required in order to obtain voSPOOL, voSPOOL in turn allows the SPOOL Token Holder to participate in Spool Ecosystem Governance.

Governance via Spool Improvement Proposals (SIPs) SPOOL Token Holders can create their own SIPs, while voSPOOL Holders can vote on SIPs that will determine future protocol changes and upgrades. Due to the majority of SPOOL being distributed to protocol users (see Release Schedule

voSPOOL is a non-transferrable, non-tradeable token that acts as a voting power multiplier within the Spool Ecosystem. The voSPOOL token can be acquired via staking SPOOL Tokens. voSPOOL serves the following purposes:

• Directing 50% of all SPOOL Token Emissions: voSPOOL holders can vote on how 50% of SPOOL emissions are distributed across Spool Smart Vaults. Read more on how to participate in Voting on SPOOL Emissions

• Voting on Spool Improvement Proposals: voSPOOL holders can use their voSPOOL balance to vote on SIPs in order to participate in Spool Ecosystem Governance.

Tokenomics

In the near future, the SPOOL Token supply is expected to be inflationary, while in the long term, the plan is to adopt a schedule that provides for economic sustainability. Initially, 5% (10.5 million) SPOOL Tokens were put into circulation, distributed via a fair launch liquidity bootstrapping event on Balancer. The remaining 95% of the token supply is divided into three categories: DeFi Stakeholders, Builders, Advisors, and Ecosystem, and DAO governed. 

The SPOOL Tokens allocated for DeFi Stakeholders (10% or 21 million SPOOL Tokens) will be distributed through linear vesting over a 24-month period, starting six months after the launch of Alpha V1, subject to the fulfillment of their KPIs. The Builders, Advisors, and Ecosystem category (20% or 42 million SPOOL Tokens) will also be distributed through linear vesting over a 24-month period, starting six months after the launch of Alpha V1. 

The Builders of Spool will stake their 20% Builders Share of the SPOOL Token supply indefinitely behind a time lock as they vest, ensuring that any significant unlocks are communicated well in advance. The DAO governed category (65%) will have its release schedule determined by the Spool DAO. 

This allocation may be used to incentivize Genesis Spools to distribute governance to protocol users, token swaps with other DAOs, bootstrapping liquidity, and other purposes. Votes to determine an initial start of distribution will be held in the near future.

It should be noted that Spool’s reported circulating supply of 25,303,557 SPOOL is below what is currently unlocked according to their stated tokenomics. This is probably due in large part to the time lock for builders. While the time lock should protect users from sudden inflationary events, to our knowledge the exact mechanism(s) for unlocking from the time lock are not published and could be discretionary. Furthermore, 65% of the total supply is governed by the DAO, including its release schedule, which could also cause inflationary events of unknown magnitude at unknown times. Potential buyers of SPOOL should note that 88% of the supply is currently not circulating, creating the potential for 8x dilution.

Founders / Key Team Members

• Core Contributor - Hendo Verbeek - Director of Market Making at Artis.

• Core Contributor - Philipp Zimmerer - Six years of crypto / blockchain industry experience, primarily focused on strategy.

• Core Contributor - Luke Lombe - Partner at Faculty Group; advisor to numerous Web3 companies.

• Core Contributor, COO - Axel Prettl - Ph.D. in international corporate taxation from the University of Tübingen

• CBDO - Simon Schaber - MBA; Founder, Untitled INC and Untitled Investment Expertise

• Head of DeFi - Joshua Bate - Founder of DeSciWorld; decentralized science pioneer.

• Head of Institutional Marketing - Maia Benzimra - Nine years (four in web3) of marketing, media, and client relations experience.

Notable Partners

Signed partnerships:

Notional Finance, Unstoppable Domains, Trever, AngleDAO, Idle Finance, Yearn Finance, Morpho, AllianceBlock, and Bridge Mutual, Arbitrum, Harvest, Zapper, DeFi Lama, Ledger, TimelessFi, Balancer, Li.fi, Stakewise, Top Wallet, Fireblocks, Attrace, Quadrata, and Pana DAO, Fox Wallet, Li.fi, Unlimited DeFi, Nabux Wallet, Arbitrum, Coinhub Wallet, and Camelot, Deepwaters, Gearbox, Rocketpool, Staking Rewards, Matrixport, Propellerheads, Swapsicle, Backed, KuCoin Wallet, Wido, Galaxis, Nexera, Coinhub, Bitkeep, Teller, Sturdy, Beefy, 21Finance, Blocktrade, Elevated Finance, Ramm Protocol, API3, Artis, Consola Finance, Radiant, TimelessFi, Vaultka, Revest, Frontier, and GMO

Technical Development

Roadmap

Pre Product (Before 2022)

• Liquidity Bootstrap Event

  • Raised a total of $16.65M in DAI

• Deployed the SPOOL/DAI Liquidity Pool on Uniswap

• Announcement of preDAO Members:

  • BarnBridge, 4RC, Staking Rewards, Fintech IO, Genesis Block Ventures, Dot Finance, Bridge Mutual, AllianceBlock, Centrality, Minterest, CMS Holdings, Atka Capital, Signum Capital, Boxmining, Faculty Group, and Zokyo

• Spool Documentation was released

  • Complete User-Friendly Documentation on the Spool Protocol & Ecosystem

• Published the first Spool Roadmap

Alpha 1.0 (Q1 - 2022)

• Deployed the Spool Protocol Smart Contracts

  • All Smart Contracts that make Spool the protocol it is

  • 7 Supported Yield Generators

    • Aave, Compound, Convex, Curve, Harvest, Idle, and Yearn

• Released Spool Front End Application

  • Front End to interact with Spool Smart Contracts

• SPOOL Token

  • The SPOOL Token, token fueling the Spool Ecosystem

• SPOOL Token Staking

  • Fee Revenue Sharing to SPOOL Token Holders

  • Stakers are entitled to 80% of Spool its Protocol Generated Revenue

• Spool Risk Model

• voSPOOL Token

  • The voting and emission routing mechanism within the Spool Ecosystem

• Spool Documentation was updated for the final V1 Product Release

Alpha 1.5 (Q2-Q4 - 2022)

• Spool DAO

  • The ability to participate in Spool Governance

• Spool Governance Forum

  • Gave Users the ability to have discourse about Governance

• SDK for Front End Integrations

  • Software Development Kit for Spool Integration

• Spool HTML iFrame Widget

  • Widget for easy integration of Spool into any website

• User Generated Spool Smart Vaults

  • Ability for Users to create their own Smart Vaults

• voSPOOL Directed Emissions

  • Ability for voSPOOL Holders to direct the SPOOL Token Emissions to different Smart Vaults

• 7 New Strategies:

  • Morpho Aave, Morpho Compound, Convex sUSD, Convex alUSD, Convex fraxUSD, Notional Finance, and Idle Tranches

• Announced & Signed Partnerships:

  • Notional Finance, Unstoppable Domains, Trever, AngleDAO, Idle Finance, Yearn Finance, Morpho, AllianceBlock, and Bridge Mutual

• Signed & Unannounced Partnerships:

  • Arbitrum, Harvest, Zapper, DeFi Lama, Ledger, TimelessFi, Balancer, Li.fi, Stakewise, Top Wallet, Fireblocks, Attrace, Quadrata, and Pana DAO

• A Peak Value of $70M TVR is achieved

• Spool DAO has deposited $10M worth of DAI to its own Protocol

  • And generated approximately $100k in Real Yield on these assets

• A total of 70 Different Articles were posted on the Spool Medium

• Achieved 10k Unique Followers on Twitter

• Achieved 5k Unique Discord Members

• SPOOL Token received a (Not Officially Supported) listing on the BKEX Exchange

• SPOOL Token received a (Not Officially Supported) listing on the Hotbit Exchange

• Spool DAO has set up the Industry DeFi Council (IDC)

  • The IDC is a platform for discourse and exchange in a high-trust environment

  • IDC its goal is to build a bridge between TradFi & DeFi

  • IDC Members include partners at some of the largest banks, top ranked law firms and the most innovative DeFi Protocols

Beta 2.0 (Q1 - 2023)

• Deployed on Arbitrum

  • Granting Users the ability to use the Spool Protocol on Arbitrum

  • 6 Arbitrum Spool Strategies

    • Aave, Abracadabra, Balancer, Curve, Timeless.fi, and Yearn Finance

• Deployed the SPOOL Token to Arbitrum

  • Deployed SPOOL/WETH Liquidity On Arbitrum through Camelot DEX

    • In turn, Users can now stake their Liquidity Pool Tokens for xGRAIL, GRAIL and SPOOL Token Rewards

• Spool published its own Subgraph to The Graph Protocol

• Spool DAO members became the first to launch a fully banked Swisse Association

• Announced & Signed Partnerships:

  • Fox Wallet, Li.fi, Unlimited DeFi, Nabux Wallet, Arbitrum, Coinhub Wallet, and Camelot

• Signed & Unannounced Partnerships:

  • Deepwaters, Gearbox, Rocketpool, Staking Rewards, Matrixport, Propellerheads, Swapsicle, Backed, KuCoin Wallet, Wido, Galaxis, Nexera, Coinhub, Bitkeep, Teller, Sturdy, Beefy, 21Finance, Blocktrade, Elevated Finance, Ramm Protocol, API3, Artis, Consola Finance, Radiant, TimelessFi, Vaultka, Revest, Frontier, and GMO

• SPOOL Token received a (Not Officially Supported) listing on the Bitget Exchange

Spool V2 (Q2-Q4 - 2023)

• Deployment of the V2 Spool Protocol

  • Audited at launch by Trail Of Bits

  • Built on the same Battle Tested Logic as Spool V1

  • V2 Protocol Extends the Spool Protocol Scope to:

    • Allowing Deposits of all ERC20 Tokens:

      • Liquidity Pool Tokens (LP Tokens)

      • Liquid Staking Derivatives (LSDs)

      • Volatile Tokens (ETH, wBTC, ..)

      • Multi Collateral Deposits

        • Allows for Full Scope Portfolio Management

  • V2 Protocol Extends the Strategy Scope by:

    • Adding Custom Strategies (“Managed Vaults”)

    • Adding Volatility Based Strategies

    • Adding RWA based Strategies (Partnerships signed already)

      • Think of: US Treasury Yield Pools

  • V2 Protocol adds “Gating” as a feature:

    • Allowing for NFT-Gated Smart Vaults

    • “KYC”-Gated Smart Vaults

    • Whitelisted Smart Vaults

    • Gating is also possible upon Exit of a Smart Vault:

      • Exit Gating allows for Full Compliance, if enabled by the User

  • V2 Supports Multi Asset Smart Vaults

    • Allowing for end-to-end Portfolio Construction & Management

  • V2 Allows for Timelocks

  • V2 Allows for Multiple “Smart Vault Owners” per Smart Vault

    • Giving multiple users / protocols the ability to own and manage the same Smart Vault

  • V2 Supports Asynchronous “DoHardWork” Calls

    • This ensures full composability and ensures that the Spool Protocol does not get gridlocked when 1 Strategy becomes unavailable

  • V2 Supports Multi-Chain Deposits

    • Cross-Chain collateralization, deposits and management

• Spool V2 Updated Front End

  • Support for Multi Asset Smart Vaults

  • Display of Transactions (Complete Smart Vaults Overview)

    • Transaction History with CSV-Based Data Export Function

  • Standard and Advanced view for Transactions (Deposit & Withdrawal)

  • Support for Automatic Conversion on Deposit

  • Automatic Allocation of Assets and Advanced Slippage Maintenance

  • Support for Guards & Actions during Smart Vault Creation

  • Entry & Exit “Guard” Configurator with CSV-based Data Export Function

  • Advanced Dashboards:

    • Smart Vault Investor Dashboard

    • Smart Vault Creator Dashboard

  • Extended Smart Vault Creator Tools:

    • Incentives Management UI

    • Extended Fees Management UI

  • User Settings for the UI

    • Saved through Session Cookies

• Signed Memorandums of Understanding (Partnership Agreements):

  • Spool Protocol Based Exchange User Earns Program

  • External Protocols Deposit parts of their Treasury to a Smart Vault

  • Incentivization of certain Smart Vaults by external Projects

• Spool V2 Technical Documentation

  • Spool V2 Technical Documentation will be released alongside the V2 Protocol

• Advanced Compliance:

  • Spool V2 comes with Full Legal Analysis of Institutional Use Cases:

Contract Audits

Spool has Multiple Audits that are available on https://docs.spool.fi/technical-reference/audits 

Fundraising / Financial

Please note: Deepwaters does not ask projects for financial documents and relies on the statements of the projects and public information.

The Spool DAO was established by a group of accomplished industry leaders who joined forces with a shared objective of creating the Spool Protocol. The initial DAO contributors donated funds to the DAO treasury and committed to a set of specific contributions, based on their skillset, expertise, and network. The treasury has remained entirely under DAO control. 

Five percent of the total supply of SPOOL tokens (10.5 million SPOOL) were sold via a fair launch liquidity bootstrapping event on Balancer. This netted $16.65 million in token sale proceeds for the SPOOL DAO, which gives a runway to the end of 2027.

Traction / Community / Media

Social Media

• Twitter - 13.2k+ followers [link]

• Telegram members - 942 [link]

• Discord members - 6,957 [link]

• Medium - 70+ unique articles [link]

News

• Crypto News - Spool partners with Camelot DEX after launching on Arbitrum

• Alexa Blockchain - Spool Brings Simplified DeFi Access to 2.4 Million Addresses on Arbitrum One

Disclaimers

This report of the SPOOL Network Token (the “Token”), issued by SPOOL Finance (the “Issuer”) is made by Deepwaters EU s.r.o., a Czech limited liability company, company number: 179 11 257, with its registered seat at Rybná 716/24, Staré Město, 110 00 Prague 1, Czech Republic, email: info@deepwaters.xyz (the “Exchange”).

This report is not, nor should be considered, an endorsement, approval or disapproval of any particular project, team, code, technology, asset or anything else. This report is not, nor should be considered, an indication of the economics or value of any technology, product or asset created by any team or project. This report does not provide any warranty or guarantee regarding the quality or nature of the technology analysed, nor does it provide any indication of the technology’s proprietors, business, business model or legal compliance.

To the fullest extent permitted by the applicable law, the Exchange disclaims all warranties, expressed or implied, in connection with this report, its content, and the related services and products and your use thereof, including, without limitation, the implied warranties of merchantability, fitness for a particular purpose, and non-infringement. This report is provided on an as-is, where-is, and as-available basis. The Exchange does not warrant, endorse, guarantee, or assume responsibility for any product or service advertised or offered by the Client or any third party through the product, any open source or third-party software, code, libraries, materials, or information linked to, called by, referenced by or accessible through the report, its content, and the related services, assets and products, any hyperlinked websites, any websites or mobile applications appearing on any advertising, and the Exchange will not be a party to or in any way be responsible for monitoring any transaction between you and the Client and/or any third-party providers of products or services.

This report should not be used in any way by anyone to make decisions around investment or involvement with any particular project, services or assets, especially not to make decisions to buy or sell any assets or products. This report provides general information and is not tailored to anyone’s specific situation, its content, access, and/or usage thereof, including any associated services or materials, shall not be considered or relied upon as any form of financial, investment, professional, tax, legal, regulatory, or other advice.

This report is based on the scope of materials and documentation provided for a limited review at the time provided. The Exchange prepared this report as an informational exercise documenting the due diligence involved in the course of listing of the Client’s token on the Exchange only, and this report makes no claims or guarantees concerning the smart contract's operation after listing. This report provides no opinion or guarantee on the security of the code, smart contracts, project, related assets or anything else at the time of listing or after listing. Smart contracts can be invoked by anyone on the internet and as such carry substantial risk. The Exchange has no duty to monitor the Client’s operation of the project and update the report accordingly.  

The information contained in this report may not be complete nor inclusive of all vulnerabilities. This report is not comprehensive in scope, it excludes a number of components critical to the correct operation of this system. You agree that your access to and/or use of, including but not limited to, any associated services, products, protocols, platforms, content, assets, and materials will be at your sole risk. On its own, it cannot be considered a sufficient assessment of the correctness of the code or any technology. 

Deepwaters has conducted the analysis for its own internal purposes and should be perceived as such, therefore, Deepwaters recommends seeking multiple independent opinions on any claims which impact any functioning of the code, project, smart contracts, systems, technology or involvement of any funds or assets. Deepwaters’s position is that each company and individual are responsible for their own due diligence and continuous security.