TL;DR: go to WeiDai dapp, connect your wallet and click on Swap Tokens. Select the Sisyphus or Faucet tabs.

The first section introduces Sisyphus and explains how to earn SCX by either playing or getting it free from the Faucet! SCX can be instantly redeemed for Dai, Eth, Link, PNK, WBTC, BAT, LOOM and MKR — or continue reading for an explanation. The following sections explain why the Sisyphus dapp is necessary.

King of the Hill

In the early days of Ethereum, a game called King of Ether became quite popular. The basic idea was that at any time there’s a reigning monarch who can be deposed with an Ether payment. The buyout payment starts low and with every ‘overthrow’, it doubles. If you become monarch, your buyout payment goes to the previous monarch.

Sisyphus is a modern incarnation of the game with some alterations:

1. To play, you have to use Scarcity rather than Ether. Aside from the security benefits of using an ERC20 token instead of Ether, the purpose is to give players a reason to acquire Scarcity to bootstrap Behodler’s liquidity.
2. After deposing a monarch (or in this case replacing a Sisyphus), the new buyout price is 4 times the buyout price paid. This means you stand to get almost 4 times what you paid to become the Sisyphus.
3. Like the mythical rock rolling down the hill, the buyout price slowly declines. This prevents the problem of the buyout price skyrocketing until no one can pay. It also gives the reigning Sisyphus a reason to market the dapp to bring in more players.
4. Only 80% of the buyout payment goes to the deposed Sisyphus. The rest goes into a Scarcity faucet.
5. The new Sisyphus can be sponsored. If you send SCX to the Sisyphus contract, it is given to the next monarch. The purpose of this is to give players an incentive to play by reducing the risk. For instance, if the buyouy price is 1000 SCX and the Sponsor payment is 900 SCX then it only costs 100 SCX to play, even though the next buyout price becomes 4000 SCX. Those are good terms!
6. You can pay more than the buyout price. The current buyout price is just the minimum. EG. If the buyout price is 100 SCX and you pay 900 SCX then the new buyout price becomes (900x4=)3600 SCX. The reigning monarch still only gets 80% of the minimum buyout price (80 SCX). The rest (3520 SCX) is sent straight to the faucet.

Faucet!

For those who hate risk, there’s an accompanying Scarcity faucet. Unlike early incarnations of faucets which were servers supported by ads, this one is a smart contract with a positive Scarcity balance that drips at most once every 10 blocks. And of course it’s ad free. Every time a new player deposes an existing Sisyphus, the Scarcity Faucet is topped up and the payment size increases. You can drip some free Scarcity from the Faucet right now!

How to play

Go to the WeiDai dapp and connect your Metamask wallet. Select SWAP TOKENS in the left menu bar. Select the Sisyphus tab or the Faucet tab. To play Sisyphus, you need Scarcity. To get some, go to the SWAP tab, set your output token to Scarcity and choose any input token you like.

Why do we need Sisyphus?

The Behodler token swapper represents a new take on decentralized exchange (DEX) of ERC20 tokens. Unlike most DEXes which deploy contracts for each token, Behodler is one singular contract that prints one token, Scarcity (SCX). Behodler is designed so that regular swapping increases liquidity which is another way of saying that price slippage goes down over time. However, until liquidity is high, price slippage for large trades can be unacceptably high. On the other hand, small trades still cost the same gas and can become unprofitable in the presence of high pries. This presents a bit of a chicken-and-egg standoff where liquidity is too low to justify trades but the lack of trade is keeping liquidity low. Sisyphus provides an incentive to add initial liquidity to Behodler through gamification. The faucet encourages Scarcity adoption and will be useful for the community when it is listed on decentralized exchanges such as Uniswap. There are plans to use Scarcity to power a DAO in the future and widespread distribution is preferable to concentrated balances. The remaining sections elaborate these points with examples.

A simple swap example

Each token is priced in Scarcity independent of the other tokens. For instance, 1 Dai might cost 100 SCX while 1 ETH might cost 2000 SCX. What this means is that if I deposit 1 Dai, I’ll be given 100 SCX OR if I bring 100 SCX, I’ll be paid 1 Dai. In this example, 100 SCX would produce 0.05 Eth. So if we deposit 1 Dai and use the SCX generated (100) to buy Eth, we’d get 0.05. This gives us an implied price of 1 Dai = 0.05 eth OR 1 eth = 20 Dai. The front end website lets you skip right past SCX and swap Dai straight for Eth by doing all the SCX swapping in the background.

Price changes

Whenever you deposit a token in Behodler, you get a little less SCX with each additional unit. For instance, the first Dai might give you 100 SCX, the next DAI deposited gives you 99 SCX, the third unit gives you 98 SCX and so on. This simulates the fact that as supply rises, price falls. The actual numbers aren’t important. What matters is the relationship. What does this mean for relative price? Well suppose you’d like to purchase Eth with Dai. Presently 1 Dai will produce 100 SCX and 100 SCX will produce 0.05 Eth. Let’s dump a bunch of Dai in so that 1 Dai will now only produce 80 SCX. Now let’s try swap 1 Dai and see how much Eth we get. We deposit 1 Dai, get 80 SCX and deposit 80 SCX into Behodler to get Eth. It now only returns 0.04 Eth. This implies a new exchange rate of 1 Dai = 0.04 Eth or 1 Eth = 25 Dai. The price of Dai as measured in Eth has fallen. This corresponds to reality: increased supply => decreased price, all else equal. Some of the mechanics of slippage have been simplified to demonstrate the basic idea.

Liquidity

Liquidity is a jargony way of saying “how much can I trade without affecting the price?” OR how much can the market absorb my transactions without noticing. Liquidity is usually related to how big you are relative to the market. For instance, if I buy $1 million of US treasury bills, we shouldn’t expect much movement in price because I’m playing in a market measured in trillions of dollars. However, if I dump 4893.33 Ether (about $1 million) into Uniswap, the app reports the price will fall by 33%.

Behodler price mechanics work such that the bigger the reserves of a particular token, the more that token can trade without affecting the price (in Scarcity and therefore in every other token). The explanation for why requires a bit of calculus that can be saved for a future article. Behodler also has an inbuilt liquidity growth mechanism, burning. Whenever SCX is sent to Behodler, 2.4% of it is burnt. The rest is used to redeem the token. For instance, suppose 976 SCX can buy 100 Dai. If you want to get 100 Dai out, you’d have to send in 1000 SCX. After burning 2.4%, 976 SCX would remain and you’d get your 100 Dai. The explanation for why burning increases liquidity is also for a more technical future article.

Chickens, eggs and gas

Exchanges with low liquidity are really only suitable for small players since only small transactions are affordable. Any large transactions induce such large price slippage that they become infeasible. The problem with small transactions is that they cost the same gas, regardless. If you’re making a trade of $1 and the gas cost is $2 then your trade better be good! While Behodler has the burn mechanism to gradually grow liquidity, the initial stages present a chicken-and-egg problem: too little liquidity to justify trade and not enough trade to increase liquidity. Sisyphus presents a solution by providing a gamified incentive to acquire Scarcity and thereby increase token reserves.

Conclusion

Every DEX requires a mechanism to encourage liquidity growth. Uniswap and Behodler both use transaction fees which are fed back into the pool. However, Uniswap also allows holders of both sides of a token pair to bootstrap exchanges with liquidity to avoid the chicken, egg and gas dilemma outlined above. The Behodler equivalent is to simply buy Scarcity. With enough Scarcity purchasing, the liquidity of other token swaps will naturally increase. To encourage the purchase of Scarcity, Sisyphus was deployed to gamify the process of adding liquidity while the accompanying Faucet was created to act as both a mechanism for widespread adoption and to act as a Scarcity sink.