Migaloo Chain, Tokenomics & Airdrop

Welcome

Since our last article, where we reviewed 2022, and gave an outlook into 2023 a lot has happened for us. This article brings you up to speed about our current development, why we are launching our chain, the release of our tokenomics, and gives an update about the airdrop that is coming up.

Migaloo Chain & White Whale dApp

You might have heard that we are going from a “dApp only” protocol to launching our chain. First, that means that there is now a distinction between the White Whale dApp that the White Whale team is actively developing and the Migaloo Chain.

The Migaloo chain will be a permissionless Cosmos SDK chain on which projects are encouraged to build their applications on top. Permissionless is the key word here because creating a sophisticated application on a permissioned Cosmos chain can be complicated and exhausting.

Naturally, the Migaloo chain will be the home of our White Whale dApp, specifically our Interchain Command Center (the heart of our protocol).

We are collaborating with Liquid Staking derivative providers [Redacted] and Backbone Labs. They are going to launch their liquid staking application on the Migaloo chain. That means WHALE holders will be able to stake their coins and receive [x]WHALE or bWHALE in return. The Liquid Staking Derivatives (LSDs) will accrue yield from various sources (more info: Value accrual of the token).

These LSDs can in turn be staked to White Whales local Liquidity Hubs (LH) on every chain where we White Whale is and will be deployed on (currently: Terra, Juno, Chihuahua, Comdex, Injective).

Why Migaloo Chain?

There are a couple of reasons why we chose to make this significant pivot in our strategy:

1. Sovereignty
2. Interchain Alliance
3. Building an ecosystem
4. Sovereignty

With the launch of our chain, we will be independent of other ecosystems. It is a common problem that, for whatever reason, chains experience prolonged downtime or are making some changes to the infrastructure that are not favourable for their deployed dApps. Furthermore, by setting up its relayers on the Migaloo chain, the flow of assets can be routed from and to the Migaloo chain, making the White Whale dApp the Defi Hub of the Cosmos Ecosystem.

2. Interchain Alliance

The Alliance module will allow whitelisting tokens of other projects to be staked on the Migaloo chain to improve security. Stakers will earn WHALE (and other tokens) rewards in return. Similarly, suppose another Alliance chain decides to whitelist WHALE. In that case, holders can stake to that chain and earn the staking rewards paid out by that chain. Although we very carefully considered other security models such as Interchain Security and Meshed Security, we think Interchain Alliance not only fits best to our specific model and design structure but also unlocks other potential use cases for the WHALE token and allows White Whale to align incentives further and deepen relationships with collaborating projects.

3. Building out a whole ecosystem

Ultimately, with the launch of our chain, our vision becomes bigger than just being a primary dApp in the IBC Ecosystem. Launching the Migaloo chain will enable builders and projects to launch applications on Migaloo around and on top of the White Whale dApp. The project will grow from a dApp to a whole ecosystem designed to accrue value to WHALE holders.

The White Whale dApp

The Web-3 industry is moving fast, and we are constantly considering improvements to the White Whale dApp. Consequently, the model as it stands right now has yet to be a finalized version. Nevertheless, it is worth giving an overview of our current design since we have made a couple of tweaks to the Whitepaper.

By staking Liquid Staking Derivatives (i.e., bWHALE, xWHALE, etc.) to the local hubs, stakers can take part in the governance of the specific satellite market. Governance will involve decisions like which token pairs will be listed, local incentives & rewards on pools, etc. In addition, they will earn the majority of the rewards generated by the respective Liquidity Hub, while some rewards will go back to all Stakers on the Migaloo chain, and another portion will burn WHALE. This design model has several advantages: It is better for the WHALE Community since, as a staker, one does not have to decide whether to receive staking rewards from the Migaloo Chain or a LH. Also, it is better for the security of the Migaloo chain since this model will have a very high WHALE bonding ratio.

As soon as our interchain pools go live, the amount of WHALE staked on each Liquidity Hub will also determine the amount of Interchain Liquidity directed to the underlying chain. This means that if the majority of WHALE stakers stake on the Liquidity Hub on Injective, the majority of Interchain Liquidity will also flow there (proportionally to the staked amount). This mechanism will open up the door for bribes that will incentivize Whale stakers, to stake their WHALE to a specific ecosystem and generate another revenue stream for WHALE stakers.

Token distribution & Airdrop

With the launch of the Migaloo chain, there are some implications for the tokenomics, since the token is going to be used to secure our chain. The new model will benefit significantly old WHALE holders and airdrop community members since we significantly decreased our token supply.

The token distribution is shown below:

First, we reduced the token supply from 1 billion to 600 million. This benefits, first and foremost, our V1 holders since they will receive a 1:1 airdrop. They will receive percentage-wise a much higher stake in the protocol. Next, we want to onboard the broader Cosmos Ecosystem. Since we are an Interchain Liquidity Protocol, which is live on five different chains (Injective, Comdex, Chihuahua, Terra, Juno), we will distribute to each of these Communities 1% of our supply. In addition, Atom stakers will also receive 1% of the supply since it is the broadest adopted asset in the ecosystem, and we are trying to get as many people as possible interested in our protocol.

We set aside 100 million tokens for raising new funds to ensure operations over the coming years and grow the ecosystem of Migaloo. To facilitate that growth, we reserved 25 million tokens for builder incentives, bug bounties etc. The foundation gets another 25 million, mainly used to acquire vital strategic partners. To ensure that the WHALE token is tradable with decent liquidity on day 1, we reserved 50 million WHALE tokens for potential listings and trading pairs. The infrastructure allocation ensures the ongoing maintenance and future upgrades of the chain and everything regarding relayers to other chains, indexing, and the like. Lastly, 100 million tokens are allocated to the team, vesting linearly over the next two years.

The rest of the vesting schedules are shown below:

Tokenomics

Ethereum Tokenomics

There will be no cap on the WHALE token supply. The base fixed inflation rate of 4% of the total supply will be going to validators and delegators as an incentivization to secure the chain and help foster economic growth of the whole Migaloo ecosystem. We will integrate a burn module, where a portion of all the protocol fees is burnt. That means even though WHALE has a base rate of inflation when there is a certain threshold of transactions crossed on the Migaloo Chain, Whale will become deflationary.

Value accrual of the token

Apart from being used as a gas asset on the Migaloo chain, the WHALE token will have several value accrual mechanisms:

1. Whale stakers will get the base APR from staking to the Migaloo chain.
2. Interchain Alliance allows foreign assets to be staked to the Migaloo chain and earn the WHALE token. In return, they pay a small fee that will be distributed to WHALE stakers. This means WHALE stakers will not only be earning WHALE but also Luna, Atom, and whatever assets will be Whitelisted in the future.
3. Another value accrual will come from the White Whale dApp. Initially, all fees generated are used to buy back the WHALE token. However, in the future, the community can decide if they want to keep, for example, the fees generated in Atom in their native form, earning WHALE stakers even more flagship IBC assets.
4. Lastly, Whale stakers can decide to stake their WHALE and get back a Liquid Staking Derivative token like xWHALE and bWHALE. These assets can then be staked to a Local Liquidity Hub on any chain we are deployed on (Injective, Terra,…). Stakers will be able to participate in local governance and earn rewards from the local Liquidity Hub.

The new design will bring maximal value to WHALE holders and make it one of the prime IBC assets.