Introducing Tentacle Finance

5 min readNov 8, 2021

Tentacle was created when four anonymous squids joined forces to deploy the Tentacle Finance DAO. These founding squid are now known as the Senior Squids, they are:

Purple Tentacle
WhiskeyXray
Scrappy
Tenty

In order to jumpstart the Tentacle DAO, the Senior Squids each donated one tentacle (500 UBQ) which was paired with 4000 INK in order to bootstrap the farm and distribution of INK (2000 UBQ & 16,000 INK total).

Earnings from the DAO participation in the Tentacle Finance farm will be harvested quarterly and the seed funds will never be unstaked or removed in any way. The DAO will then hold these funds and be used to fund key infrastructure and projects related to Tentacle Finance.

Our Vision

Tentacle Finance will be rolled out in phases. The below infographic explains some of our planned milestones

Phased Approach

We will be launching the project in Phase 1 which will include a single UBQ/INK farm based on the Ubiq TGE Framework, whilst we dilligently work on moving to phase 2 as soon as possible.

Phase 2 will include 2 additional farms with a TOKEN/INK pairing as well as starting to roll out up to 4 TOKEN/TOKEN pairs (no INK in pairing but rewarded in INK). Other than the initial UBQ/INK pairing these additional pools have not been decided yet but will be based on pre-existing Shinobi tokens.

Due to the unpredictable nature of development work we have made the decision to not give fixed dates for moving through the phases, as development is notoriously difficult to predict with certainty, and we would not want to make promises we cannot keep.

Phase 3 will be where Tentacle Finance roll out new features for the community. Our ambitions are primarily around:

Governance system
Looking at a tax to fund the treasury (subject to community vote)
Bridged farms on other networks such as Polygon or Ethereum
Other use cases we are still brainstorming

Once we have a governance system in place we expect to hold a series of votes to decide the future of Tentacle Finance as the ecosystem transitions to a community run organization. We expect votes around:

Total Supply cap (increase cap for additional rewards or fix at 88m INK)
Future rewards distribution on pools
Priority for development focus
Any community requests for votes that have enough interest/support

Phase 4 and 5 are yet to be defined as we expect community participation to define the focus areas. Also the Ubiq ecosystem is still evolving so there is common sense in waiting to see what new infrastructure is available to the network. For instance, these phases could include an algorithmic stablecoin farm if this is available.

Tokenomics

INK is the official token of Tentacle Finance and is the reward token across all of its farms.

INK Current Supply — 88 million

As documented in the phased approach, eventually there will be up to 7 farms running on Ubiq, with potentially more in the future. The rewards structure is divided into 3 tiers

Tier 1: UBQ/INK main pool

Tier 2: 2x TOKEN/INK farms each with a quarter of the rewards of Tier 1 pool

Tier 3: Up to 4x TOKEN/TOKEN farms each with half of the rewards of Tier 2

The reward ratio will always remain the same irrespective of the amount of INK being distributed, unless at some point a community vote is taken to change the ratio.

Example (not actual rewards structure):

To make this easy to understand we will look at a theoretical set of rewards figures as an example:
Let’s say the Tier 1 UBQ/INK pool pays out 100 INK a minute
Tier 2 is a quarter of the rewards, so each of these two pools pays out 25 INK a minute, so 50 INK in total emissions
Tier 3 is then half the rewards of Tier 2, so each of these four pools pays out 12.5 INK a minute, again 50 INK in total emissions
The total emissions per minute for all pools is then 200 INK.

Now that you all understand the concept, we will run through our official plans which govern the first full year of farming.

Rewards Structure

During phase 1 the total monthly INK emissions will be 4,216,320 INK and a single UBQ/INK farm.

Phase 2 will launch two additional TOKEN/INK farms. This will co-incide with a bonus rewards month where the main UBQ/INK farm will get 4x the monthly rewards, or 16,865,280 INK.

Tier 2 farms will receive 4,216,320 INK per month and any tier 3 farms (if launched this month) will receive 2,108,160 INK per month, but are unlikely to start until a decay kicks in.

There will then be 4 consecutive months of reward halving across all pools. The UBQ/INK pool monthly rewards will move to:

8,432,640 INK per month
4,216,320 INK per month
2,108,160 INK per month
1,054,080 INK per month

And then remain at 1,054,080 INK per month for the remainder of the initial 12 month period. All Tier 2 and Tier 3 pools will follow the same ratio of rewards described earlier in the article.

In theory the rewards structure will look something like the following:

Predicted Inflation in circulating supply

Due to development progressing at an uncertain pace, we can only estimate the growth in circulating supply between an upper and lower band.

We will be working our hardest to roll out additional farms as soon as possible, but sometimes, if there is a bug these timescales can slip. Therefore we are not committing to exact timescales so as not to let down the communities expectations.

The below graph indicates the expected circulating supply growth for the first year of Tentacle Finance’s existance.