In order to launch and succeed with an innovative chain like DeFund, we know that community involvement and governance are of utmost importance. DeFund is built from the ground up with community involvement ingrained from genesis, and $DETF will continue that trend. In fact, 100% of all protocol fees are distributed to $DETF stakers in xDETF, our protocol fee distribution token. This means that as DeFund grows, those who participate in securing the DeFund network earn even more. The governance of the DeFund network will be powered by $DETF, DeFund’s utility and governance token.
DETF Token Purpose:
The use case for $DETF goes far beyond being used exclusively as a governance token. It’s a governance and utility token that powers all major distributions and contributions on the DeFund Network. Many parameters in the DeFund network are directly linked to governance via $DETF. For example, all autonomous index funds created by DeFund users will have a 0.30% protocol fee, while all CosmWasm-based funds will have a 0.15% protocol fee and 0.15% kickback to the contract creators and maintainers (at launch, this can be voted on later through governance proposals). These protocol fees are then 100% distributed to DETF stakers who stake our fee staking token xDETF (we will dive into token-specific details at a later date in a separate article). The protocol fee, the list of fees offered, the percent of fees distributed, and even the types of fees offered (say adding a performance fee for contract creators) can (and probably will) change. In reality, we encourage this in order to better reflect the community’s wants/needs. All of this is powered by $DETF!
DETF Tokenomics:
All $DETF tokens will be distributed via a combination of staking rewards, fund bonding, developer & marketing vesting, community pool, strategic reserves, liquidity rewards, relayer rewards, and a genesis airdrop according to the following distribution:
Staking Rewards: 20%
Fund Bonding: 20%
Developer & Marketing Vesting: 16%
Community Pool: 10%
Strategic Reserves: 10%
Liquidity Rewards: 10%
Airdrop: 10%
Relayer Rewards: 4%
DETF Genesis Supply:
From Genesis, there will be an initial supply of 100M DETF tokens, with 50M being airdropped directly to the DeFund community (a full airdrop breakdown can be seen here), and the other 50M held in the DeFund Foundation in the form of Strategic Reserves. These tokens will be used for fundraising, grants, investment in protocols built on the DeFund network, as well as other opportunities that support and grow the DeFund network.
DETF Release Schedule:
After the genesis mint, new tokens will be released on a halving schedule, starting with a year 1 release of 200M $DETF, followed by a year 2 release of 100M $DETF, a year 3 release of 50M $DETF, and so forth. Tokens will be emitted in the following proportions: 20% to developer and marketing vesting, 12.5% to liquidity rewards, 25% to staking rewards, 25% to fund bonding, 12.5% to the community pool, and 5% towards relayer incentives. These are released on a per-block basis (roughly every 6 seconds).
Staking Rewards Explained:
To promote maximum security on the DeFund network, at every block, 25% of released tokens per block will be released to stakers who stake to the top 100 validators on the DeFund network. Staking is crucial to the security of the network, so those who participate will be compensated fairly. Validators do have a commission rate and each validator can choose their commission as they please. This helps to promote competition among validators, however, individuals should also consider factors beyond commission when delegating to validators, such as uptime, slash protection, and auto-restaking to name a few.
Fund Bonding Explained:
To reward long-term holders of dETFs on DeFund, at every block, 25% of released tokens per block will be distributed to dETF investors who bond their fund tokens, meaning they lock their fund tokens in bonding. This rewards long-term investment within the DeFund network which helps grow DeFund in the long term!
Strategic Reserves
At genesis, 50M $DETF will be set aside for strategic reserves. These reserves are kept aside for any strategic opportunities that have the potential to benefit DeFund in the present or future. This includes advisors, investors, internal infrastructure investments, and any other strategic moves in the future.
Community Pool
12.5% of released tokens per block will be distributed towards the community pool. The purpose of this pool is to give the community a direct method to improve the DeFund network in any way deemed fit. The pool is voted on and directly tied to governance proposals.
Developer & Marketing Vesting
20% of tokens released per block will be distributed in the form of payment for development and marketing services. These tokens are non-tradeable and non-stakeable until they are released.
Airdrop
As previously mentioned, 50M DETF will be airdropped directly to the DeFund community as a reward for contributions to the network. These contributions may include the staking of certain assets, completion of certain interactions with DeFund, providing liquidity, and more. This will all be described in a later article, which will also detail the exact allocations of the airdrop.
Liquidity Rewards
12.5% of tokens released per block will be distributed to those who provide liquidity to the DeFund network. Proper liquidity is essential for the auto-rebalancing of, as well as the initial investments into dETFs. As a result, those who provide liquidity will be rewarded for doing so.
Relayer Rewards
In order to keep DeFund fully permissionless and ensure the proper function of Interchain Querying and Interchain Accounts Transactions(to be described in a later article), quality relayers need to support the DeFund Network. For this to happen, 5% of tokens released per block will be distributed to those who process transactions as relayers.
Conclusion:
Our tokenomics will align all stakeholders and participants within the DeFund network and will play an integral part in the growth and success of the DeFund network. We do expect the tokenomics to evolve to better align with DeFund as it grows and all that is accounted for with the structure of DeFund’s chain, and tokenomics. This all comes down to governance, and we encourage anyone and everyone to contribute to the on-chain governance to better align with your goals, aspirations, and passions. Each and every DeFunder is an integral and important component of the ecosystem. If you would like to join and help us change the way the world invests in crypto, join us on Twitter and Discord. Happy trading!
