Paragon Dex - Whitepaper

Paragon: Transparent Markets → Builder-First Chain

Version: v1.0 (Draft) Last Updated: 16/09/2025 Contacts: discord.gg/AwDmuA77tE · https://github.com/Paragon-Chain · paragonchain.org

Abstract

In the rapidly evolving landscape of decentralized finance (DeFi), users face persistent challenges: fragmented liquidity leading to suboptimal trade execution, vulnerability to MEV exploitation, and cumbersome user experiences that deter adoption. Paragon Protocol is a next‑generation decentralized exchange (DEX) that redefines trading through intent‑based architecture, solver‑driven optimization, and reward‑aligned liquidity. By combining private order handling, a competitive solver network, and a veXPGN‑governed gauge system, Paragon delivers superior prices, enhanced privacy, and durable incentives for traders, liquidity providers, and long‑term governors.

Introduction

Paragon Protocol is a non‑custodial DEX: trade directly from your wallet with on‑chain transparency and user control. We address long‑standing inefficiencies in both AMM DEXs and CEXs. Our architecture optimizes each trade for best outcome, ensures LPs are rewarded for useful liquidity, and gives users real ownership via veXPGN (vote‑escrowed XPGN) governance.

Launched with a focus on user‑centric innovation, Paragon integrates intent‑based swapping, batch clearing, and index token minting to create a fluid, rewarding trading environment. Whether you’re a retail trader seeking the best price or an institutional LP, Paragon aligns value creation with rewards.

The Problem: Barriers to Efficient and Secure DeFi Trading

  1. Liquidity Fragmentation & Suboptimal Execution Liquidity is scattered across chains and pools. Traditional AMMs often yield high slippage on larger trades due to limited path optimization. Result: billions in lost efficiency.

  2. MEV Exploitation & Front‑Running Public mempools expose user intents. Miners/solvers front‑run and back‑run orders, extracting value and damaging trust.

  3. Poor UX & Weak Incentives Gas overheads, complex interfaces, and inconsistent LP rewards (impermanent loss, idle pools) lead to churn and capital flight.

  4. Limited Multi‑Asset Tools Diversification across assets or chains typically requires many transactions with high friction.

Our Solution: Intent DEX with Solver Optimization (PoBE)

Flow DEX with Proof of Best Execution (PoBE)

  • Swap with Intent: Users specify high‑level goals (e.g., “swap X → Y, minimum received Z”).

  • Private Order Handling: Intents are batched privately; orders aren’t exposed on the public mempool prior to settlement, cutting MEV risk.

  • Competitive Solver Network: Independent solvers compete to produce best routes using global liquidity. Winners prove best execution.

  • Batch Clearing & Surplus Distribution: Batches settle atomically. When execution exceeds user minimums, surplus becomes cashback to traders and revenue for LPs/veXPGN per policy.

Simulations indicate meaningful improvements for complex routes (e.g., double‑digit percentage savings vs. naïve AMM hops), especially during volatile markets.

Key Features Users Notice

1) Better Prices, Measurable Savings Optimized routing + batch clearing = lower slippage and visible cashback when execution beats the minimum.

2) Rewarding Liquidity LPs earn swap fees and a share of PoBE surplus when their pools power winning routes. Emissions flow to pools selected by veXPGN gauge votes.

3) Seamless UX No sign‑ups/KYC. Toggle between classic swaps and intent mode. Mobile‑friendly, EVM‑compatible.

4) Ecosystem Incentives $XPGN utility: lock for veXPGN to steer emissions and earn protocol fees; optional Auto‑Yield to stake freshly bought XPGN into Pool‑0 (Single XPGN) with one tap (1–3% skim).

DAO & Governance — veXPGN

veXPGN is a non‑transferable voting token minted by locking XPGN for a chosen duration:

  • Lock window: 1 week → 4 years (max).

  • Voting power: veXPGN = XPGN_locked × (lock_duration / 4y); decays linearly to expiry.

  • Utility: Vote on gauges (emission weights per pool), fee‑split parameters, new listings, safety thresholds, and treasury initiatives.

  • Rewards: veXPGN lockers receive a share of protocol fees and PoBE surplus per the revenue policy below. Optional rebase can offset dilution during the emissions phase (configurable by DAO).

  • Security: Governance actions execute via time‑locked modules; emergency pause is guarded by a multisig with DAO oversight.

Why veXPGN? Locking aligns long‑term governance with the protocol’s health. Voters direct emissions toward productive pools, while earning fees and bribes for their votes.

Gauges, Emissions & Bribes

Gauges allocate emissions to pools based on weekly veXPGN votes.

  • Epochs: Weekly. Snapshot of votes at epoch start; weights apply for the full week.

  • Emission schedule: Discrete weekly issuance from the Liquidity & Gauges allocation (see Tokenomics). Example policy (tunable by DAO):

    • Week 1 base E0; thereafter E_t = E_{t-1} × (1 − d) with decay d ≈ 1.0–1.5%/week until the allocation is exhausted.

  • Distribution per epoch: Pool_i_reward = E_t × (w_i / Σ w) where w_i is the gauge weight from veXPGN votes.

  • Bribes: Anyone (partners/projects) can bribe a gauge in any ERC‑20. veXPGN voters who vote for that gauge earn the bribe pro‑rata to their vote weight. Bribes do not dilute XPGN; they’re external incentives.

  • Boost (optional): The DAO may enable an LP boost formula for lockers who also LP, e.g. up to 2.5× emissions when holding sufficient veXPGN. Boost math and caps are parameterized and governance‑controlled.

Fees & Revenue Policy (Illustrative Defaults; DAO‑Configurable)

  • Swap fees:

    • Volatile pairs: 0.20% (initial default).

    • Stable pairs: 0.04–0.10% (curve‑style range).

  • Fee split (by pair type; adjustable by DAO):

    • LPs: 60% of swap fees.

    • veXPGN lockers: 30% of swap fees (distributed in the fee token(s), non‑dilutive).

    • Treasury: 10% (operations, audits, buybacks).

  • PoBE surplus split (from better‑than‑min execution):

    • Traders (cashback): 50%.

    • LPs: 25%.

    • veXPGN lockers: 25%.

  • Buyback & Burn: Treasury may run periodic buybacks of XPGN with a portion of fees, re‑locking as veXPGN (DAO‑controlled).

All percentages are subject to on‑chain governance; the intent is to keep LPs, lockers, and traders tightly aligned.

Auto‑Yield & Single‑Stake Pool‑0

  • Auto‑Yield Toggle (Swap UI): Users can optionally divert 1–3% of the purchased XPGN to Pool‑0 (Single XPGN) automatically after a swap.

  • Pool‑0: Simple single‑stake rewards in XPGN (no wrapper token required). APR is fueled by a small emissions slice and/or revenue share per DAO policy. Users can unstake anytime (subject to any DAO‑set cool‑downs).

  • Note: Auto‑Yield uses Pool‑0 directly (not a separate “stXPGN” wrapper).

Index Tokens (Optional Module)

Mint chain‑secured baskets such as P10 (top‑10 by mcap) or L1‑10 (top L1s). Zaps allow single‑asset entry. Chainlink‑style oracles with circuit breakers, caps, and rebalancing limits protect users.

Technical Architecture

  • Intents Layer: Clients sign intents (e.g., min received, max slippage, deadline).

  • Solver Network: Permissionless off‑chain solvers compute optimal routes from on‑chain data and RFQs. Winners submit proofs of best execution.

  • Settlement Layer: Router/Settlement contracts batch and execute atomically; gas‑optimized.

  • Gauges & Bribes: GaugeController + per‑pool Gauge + Bribe contracts handle votes, emissions, and bribe accounting.

  • FeeDistributor: Streams protocol fees and PoBE surplus to veXPGN voters.

  • Governance: veXPGN (escrow), Voter, Timelock, Treasury multisig.

  • Oracles: Secure price feeds for index baskets with circuit breakers.

Key Contracts:

  • XPGN (ERC‑20), veXPGN (escrow), Voter (vote router), GaugeController, Gauge (per pair), Bribe, FeeDistributor, Router/Settlement, Treasury, Pool0SingleStake.

Tokenomics — $XPGN (Fixed Supply 550,000,000) (09/25 Confirmed Final)

Supply: Hard cap 550,000,000 XPGN (no further mint beyond cap). Initial chain: BNB (Testnet → Mainnet). Future L1 migration optional.

High‑Level Allocation (DAO‑ratified; Option A)

  • 150,000,000 (27.3%) — Liquidity Mining & Gauges Emitted weekly to pool gauges per veXPGN votes with gentle geometric decay (≈1.0%/week target; DAO‑tunable 1.0–1.5%).

  • 55,000,000 (10.0%) — Team 12‑month cliff, then 36‑month linear vest. Revocable for cause. On‑chain vesting.

  • 11,000,000 (2.0%) — Advisors & Core Contributors 12‑month cliff, then 36‑month linear vest. On‑chain vesting.

  • 33,999,999 (6.18%) — DAO & Treasury (ops, audits, MM, buybacks) Multisig with DAO oversight; transparent spend and monthly unlock reporting.

  • 250,000,000 (45.5%) — Validator / Chain Reserve For future Paragon Chain decentralization (validators, staking incentives, security budgets). Time‑locked, DAO‑controlled; released only upon L1 milestones.

  • 40,000,001 (7.27%) — Ecosystem Grants & Partnerships Liquidity partnerships, integrations, hackathons, bribe programs.

  • 10,000,000 (1.8%) — Genesis Liquidity & Market‑Making Exchange listings and on‑chain bootstrap liquidity.

Emissions Guardrails

  • Weekly emissions from the 150M pool only. No stealth mints.

  • DAO can adjust decay or pause emissions (timelocked) for safety.

  • Optional ve‑rebase (small weekly non‑dilutive offset) can be enabled to maintain locker share while emissions are active.

Utility Recap

  • XPGN: base asset, fee capture via buybacks, entry to Auto‑Yield Pool‑0.

  • veXPGN: governance, gauge voting, fee/surplus share, bribes.

  • LP Tokens: earn swap fees and emissions per gauge weights; may receive PoBE surplus share.

Risk, Safety & Audits

  • Timelock & Multisig: All sensitive params gated.

  • Circuit Breakers: For oracles, index minting, and volatile market conditions.

  • Audits: Multi‑phase audits prior to mainnet features (reports published).

  • Bug Bounty: Progressive tiers with public scope.

Roadmap (Indicative)

  • Q3 2025 (Now): BNB Testnet, intent swaps beta, Pool‑0 live, initial gauges.

  • Q4 2025: Mainnet launch; solver network activation; bribes UI; index tokens (P10/L1‑10).

  • Q1 2026: Cross‑chain settlement, mobile app, advanced governance (delegation, meta‑votes).

  • Ongoing: Audits, partnerships, liquidity programs.

Conclusion

Paragon isn’t just another DEX—it’s best‑execution DeFi with a governance flywheel. Intent‑based swaps reduce MEV and improve price; veXPGN + gauges direct emissions to the most productive pools; LPs, lockers, and traders all share in surplus. Join us, lock veXPGN, and steer where liquidity—and rewards—flow.

Docs: paragon‑protocol.gitbook.io X: @ParagonProtocol · Discord: Community Hub

This paper is informational and not financial advice. Always DYOR.

References & Links

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