Exchequer Protocol Overview

Introduction

Exchequer is the issuer standard for a new on-chain asset class: Exchequer Notes. Any ERC-20 project—especially actively traded tokens—can issue a Protected Growth Token (PGT) with its native token to give holders a defined outcome: participate in upside while receiving partial principal protection against drawdowns (up to 75%) over a fixed term, with on-chain, auditable collateral and no trusted intermediaries.

Think of it as TGE magic without the sell pressure—repeatable, campaign-style issuance that pulls in net-new users and renews attention for mature tokens without re-running emissions.

PGTs are built from first-principles LP-derivatives (LP forwards, LP calls/puts) and structured-note design, letting teams replace blunt token incentives with precise, transparent risk transfer.

The protocol is implemented as persistent, non-upgradeable smart contracts designed for censorship resistance, security, and self-custody. Issuance and settlement are fully on-chain and permissionless.

What is a Protected Growth Token?

A PGT delivers two things over a fixed term:

• Downside protection: a predefined floor at maturity (0–75% protection).

• Upside participation: if the token appreciates, the note tracks upside per the issuance terms.

PGT variants (at a glance):

• PGT — downside floor + spot-like upside with no IL on the upside, no coupon during the term.

• Power PGT — downside floor + jackpot-style upside distribution (prize-linked mechanics). If the underlying collateral token appreciates, a share of the upside is pooled and distributed by an on-chain, provably fair drawing to winning holders at maturity; all other holders still receive the protection floor.

(Details, payoff diagrams, and examples are covered on the Note Types pages.)

TGE Magic—Without the Sell Pressure

Run repeatable, time-boxed PGT campaigns to reignite discovery, onboard new cohorts, and reward patient holders—without the long-tail dilution and mercenary behavior typical of launch-era incentives.

Each campaign deliberately compounds deep, stable on-chain DEX liquidity for your token as a designed consequence, strengthening price discovery and execution quality while you grow users.

1) Why issue Protected Growth Tokens?

Stronger holder alignment than emissions.

PGTs explicitly subsidize downside at maturity, shifting part of price risk from buyers to the project on terms you control (floor, term, participation/cap). That credible protection attracts longer-horizon holders without spraying perpetual rewards. Costs are clear and budgetable.

AMM-native liquidity without rent-seeking.

Issuance collateral compacts into deeper, more stable on-chain DEX liquidity as campaigns run, reducing reliance on opaque, expensive MM/CEX arrangements. Liquidity stays transparent, programmable, and on-chain—and can be improved continuously across campaigns.

New-user acquisition that converts.

Because risk is subsidized, PGTs provide a clear floor + upside offer that appeals to users outside your current community—people who avoid uncushioned spot exposure but will try a defined-outcome note. The Power variant adds lottery-like excitement without compromising principal protection.

For established tokens.

• You’ve already paid for liquidity—now turn it into repeatable user acquisition without long-term sell pressure. • Run seasonal/quarterly PGT programs to refresh attention, segment cohorts, and bootstrap aligned holders. • Choose Growth for spot-equivalent upside or Power for jackpot-style upside to galvanize dormant audiences. • Coexist with existing venues and market-makers; issuance is on-chain and permissionless. • Replace one-off “events” with a programmable, data-driven funnel: calibrate protection levels by volatility regime and iterate each campaign.

2) How Protected Growth Tokens work (high level)

1. Issue the note on-chain and raise stablecoins/ETH from buyers.

2. Post on-chain collateral to fund the protection floor and specify upside per the note type For the PGT variant, upside is replicated without IL on the upside (LP may still be part of collateral). For the Power PGT variant, the protocol allocates a defined share of upside accruals into a prize pool throughout the term.

3. Settle at maturity using a manipulation-resistant price input (e.g., 72-hour VWAP): holders receive the protection floor (paid in LP tokens) or the defined upside payoff, whichever is greater.

Established-token scenario (illustrative).

A two-year-old token issues a 6-month Power PGT with a 50% floor to rekindle discovery ahead of a roadmap milestone. Proceeds pair with treasury tokens to collateralize and, as campaigns recur, compound deep, stable on-chain DEX liquidity.

Throughout the term, a portion of upside accrual feeds the prize pool. At maturity, every participant receives at least the floor; winners receive additional upside from the pool—no drip emissions, no lingering sell pressure.

The team reruns issuance quarterly, alternating between Growth and Power based on market conditions and campaign goals.

3) AMM-agnostic by design

PGTs work alongside major constant-product AMMs (e.g., Uniswap, Balancer, Curve). Liquidity depth on the chosen venue is the designed consequence of running PGT programs and can be tuned and compounded per campaign.

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(For specifics on redemption, LP-token settlement, ≤75% protection, and the differences between the PGT and Power PGT variants, see the Note Types and Protection pages.)