The Decentraland Token Sale Terms
Sale terms, distribution, vesting, and emission of the MANA token.
Last week we introduced MANA, our ERC20 token, and explained how it can be used to claim LAND: 1,000 MANA tokens can be burned to claim one parcel of LAND. Now, let’s to go over the details of the token sale, which starts on August 17th.
Note: The conversion of all figures from USD to ETH will take place as we approach August 17th.
- Increasing Sale: MANA tokens will sell at a price that goes from $24 USD per LAND equivalent to $40 USD. A hard cap is set at $25 million USD. The distribution of additional tokens is fixed.
- 40/20/20/20 distribution: 40 percent of the token supply will be sold to the crowdsale buyers, 20 percent is reserved to incentivize the community, 20 percent will go to the development team, early contributors and advisors, and the remaining 20 percent will be held by Decentraland. Project Leads will have three-year vesting.
- Inflation rate: Included is an 8 percent increase of the token supply for the first year, and a lower rate in subsequent years. This is implemented through a Continuous Token Model. This structure will allow Decentraland to regularly expand while accommodating new users.
Simple Terms of Sale
When creating Decentraland, a major decision point was determining the appropriate price for LAND. Searching for benchmarks, we realized a 3D web domain was the most intuitive way to understand LAND. The price of the average domain became our reference, with a range of $10 to $100 each.
Our initial price per 1000 MANA (1 LAND) will be $24 USD, which will increase with each consecutive block throughout the token sale. The sale will end when the total amount raised reaches $25 million USD, spanning a maximum of 8 days.
There are a few items to note:
- The starting price on the first day represents a 40 percent discount relative to the final day price. This discount decreases on a block-by-block basis, at a rate of 5 percent per day.
- The crowdsale will end as soon as one of the following conditions is met: the total amount in sales exceeds the $25 million USD cap, or the sale reaches day number 9.
- To incentivize value creation within Decentraland, extra tokens will be allocated to the Team, organization, and a reserve to accelerate Community and Partner engagement. The token distribution will be exactly as outlined below, without setting a cap on the token supply.
Guaranteed Token Distribution
The team, early contributors, and advisors, will receive 20 percent of the initial supply. Project lead tokens will vest over a three-year period, with a six-month cliff. This means that one-sixth of our tokens will mature semi-annually.
The crowdsale buyers will have access to 40 percent of the initial supply; 20 percent will be reserved to incentivize early users, developers, and partners who want to build within Decentraland; and the remaining 20 percent will be held by Decentraland.
For the first year, the supply of MANA will increase by 8 percent. This method best allows new content creators to join Decentraland, as the token supply will be slightly inflationary.
These additional MANA tokens will be sold by a smart contract, at a price that can be updated by Decentraland to ensure coherence with the market price of MANA. Because a limited number of tokens is issued per Ethereum block, a sudden price change will have little effect on the secondary market.
The proceeds of the tokens sold by the smart contract will finance Decentraland over the long haul, perpetually aligning it with the prosperity of the network.
Our goal is to transform the Decentraland into a Decentralized Autonomous Organization as soon as the technology is ready. The duties that will be handed over to this DAO include both determining the token sale price and the allocation of proceeds. Meanwhile, Decentraland will use a multisig wallet to safeguard and allocate the funds.
Join the Community
Note: This article has been amended. After exhaustive consultation with our advisors and the core team, we have adopted a standard auction model, as opposed to a reverse dutch auction. This better protects the integrity of the token sale and preserves the longevity of the network. We’ve also transitioned the token sale start date to August 17th to ensure complete compliance with recent regulatory announcements. Learn more in our announcement.