The Balancer team has been heads down working to make this happen: we are thrilled to announce that the Balancer protocol governance token (BAL) is live on main-net.
We did a lot of research for an off-the-shelf, secure solution to deploy a governance token that had all the features we desired for BAL. Unfortunately we did not find any and decided to launch a minimalist token that will be used within a customized on-chain governance system that we are currently working on. More information on this soon.
BAL for first 3 weeks of liquidity mining
The liquidity mining distribution started about 3 weeks ago on June 1st 2020, 00:00 UTC. Three complete weeks have gone by and a total of 435,000 BAL (145,000 BAL per complete week) have been assigned across all eligible liquidity providers on Balancer.
We are proud to announce that there are almost 1,000 Ethereum addresses that are receiving their liquidity mining BAL tokens today. Their BAL tokens will be sent to the wallets they used to provide liquidity on Balancer.
Each one of these will be contributing to the long term health of Balancer protocol by participating in our decentralized governance decisions.
BAL Distribution and Balancer Governance
The total minted supply of BAL as of today is 35,435,000. Breaking this down we have:
- 25M for the founding team, stock options, advisors and investors (read below for more details on the vesting schedule of these tokens). Out of these 25M, 10% is reserved as options to be vested by key employees that join Balancer Labs (if you are interested in being part of the team, please reach out on our discord: we are hiring!)
- 5M for the Balancer Ecosystem Fund. This fund will be deployed to attract and incentivize strategic partners that will help the Balancer ecosystem grow and thrive. BAL holders will ultimately decide how this fund is used over the coming years.
- 5M for the Fundraising Fund. Balancer Labs raised a pre-seed and seed round. This fund will be used for future fundraising rounds to support Balancer Labs' operations and growth. BAL tokens will never be sold to retail investors.
- 0.435M was minted for liquidity providers of the first 3 weeks of liquidity mining as described above. Every week another 145,000 BAL will be minted and distributed to liquidity providers.
Balancer Labs commits itself to never using any of the funds in the Balancer Ecosystem Fund to pay or reward any of its team members or employees. This fund is exclusively for partners, integrators and other teams in general that contribute to the Balancer ecosystem.
The maximum supply of BAL is 100M tokens. This cap is ultimately a social contract that is expected to be enforced at all times by BAL holders, who control governance. This means that up to 65M BAL tokens can be distributed to liquidity providers. How much of these will actually be distributed — in what schedule, under which rules — is ultimately a decision to be made by BAL holders. Governance can decide to speed up the distribution of BAL if governors see fit. They can also reduce and even prematurely stop it altogether — effectively decreasing the expected final supply — if they feel that the protocol is already decentralized enough that it does not need further BAL to be distributed.
At the current distribution rate of 145,000 BAL per week, or approximately 7.5M BAL per year, BALs could keep being distributed to liquidity providers for about 8.6 years before reaching the cap of 100M BAL.
Vesting for founding team, advisors and investors
As mentioned above, 22.5M BAL have been distributed to the founding team, advisors and investors: another 2.5M are still being held in Balancer Labs' multisig as stock options to be distributed to key employees over the next few years.
From the 22.5M BAL distributed to founding team, advisors and investors, 25% are unlocked and 75% are going to be vested continuously for the next 3 years. Balancer Labs used a vesting contract by Open Zeppelin for that (thank you OZ!). All vesting contracts can be transparently tracked and audited on-chain.
Conclusion and next steps
The Balancer community is excited to see an upcoming explosion of teams using Balancer to help manage their project treasury, create new tokenized portfolio allocations, bootstrap liquidity, propose new forms of collateral to MakerDao and so many other interesting use cases!