The TRIBE Token Distribution
To respect your time, here is the tl;dr:
- Community/Team/Investors split is 80/15/5.
- Community liquidity is instant. Investors have a linear time-lock. Team has back-weighted time-lock.
- The majority of the TRIBE will be controlled by the DAO.
- Genesis Group gets early access to the Initial DEX Offering.
We created Fei Protocol to fill a void in Decentralized Finance, with the decentralized, fair, liquid, and scalable stablecoin, FEI. Now, more than ever, the importance of decentralized governance is clear. We take the responsibility of distributing TRIBE governance tokens seriously. The TRIBE Community is our top priority.
In this post, we would like to share our plans for the TRIBE governance token distribution. Over the next few weeks, as we prepare for the launch of Fei Protocol, we will release more details about feature updates and the Genesis Group launch. As always, we welcome your feedback via Twitter and our Discord.
The Big Picture
The total initial supply of TRIBE is 1 billion. The token distribution breaks down as follows, with Team and Investors rounded to the nearest percent:
- 40% DAO Treasury
- 20% Initial DEX Offering (IDO)
- 13% FEI Core Team
- 10% Genesis Group
- 10% Staking Rewards
- 5% Investors
- 2% Grants
A critical consideration is that the community of TRIBE holders collectively maintains the ability to inflate the TRIBE supply. This may be of interest to the community for numerous reasons, including creating enhancements such as a backstopping feature for deflating in black swan scenarios, like the MKR debt auction feature of MakerDAO.
One of the biggest problems with DeFi projects today is the early access to liquidity. Investors and team members at some of the biggest projects have been getting unfathomably rich way too quickly. In startups, employees and investors are illiquid for many years and build towards a liquidity event.
Early developers and investors have agreed to lock-ups which are intended to incentivize them to continue to support the ecosystem along with new developers. This will also ensure prioritization of the Community having instant liquidity in TRIBE.
This is the way.
Before launch, we will share a post that describes how to participate in the Genesis Group and IDO. The Genesis Group will receive 10% of the initial TRIBE supply. It is important to note that this allocation is distributed pro-rata (based on ETH) to all participants in the Genesis Group. If the total raised is 100,000 ETH and you put in 100 ETH, you will receive 0.1% of the Genesis Group TRIBE. This would be 0.01% of the total initial supply. This TRIBE is a bonus in addition to the FEI received from the bonding curve; see more in the IDO section below.
Initial DEX Offering (IDO)
The IDO will be a direct listing of FEI-TRIBE on Uniswap. It is available immediately at Genesis Period completion. The IDO will receive 20% of the initial TRIBE supply. As we discussed in the Fei Protocol Announcement, the FEI for this IDO is minted by the protocol at Genesis Period completion. The liquidity (Uniswap v2 LP tokens) for this IDO are time-locked and owned collectively by the Fei Core Team and investors. The timelock follows the same four-year linear vesting as the investor allocation discussed below. This allocation strategy allows for both deep TRIBE liquidity at launch and additional incentives for the development team to support the protocol. A win-win.
The listing price of the IDO is determined as follows: take the fully diluted valuation of TRIBE at Genesis and set it equal to the amount of FEI purchased on the bonding curve at Genesis. Therefore the 20% of the TRIBE in the IDO will be listed with the equivalent amount of FEI as 20% of the FEI purchased by the Genesis Group.
This FEI is minted by the protocol and not taken out of the Genesis Group’s stake. This sets the valuation at approximately a multiple of 1x on the ETH Protocol Controlled Value (PCV) raised in the Genesis Group. This price is used as a security floor on attackers being able to 51% attack Fei Protocol to withdraw all of the PCV. As a refresher, PCV refers to the assets that are algorithmically owned and deployed by Fei Protocol to help support the peg.
An important concern brought up by the Community is the ability of bots to front-run the IDO at the expense of prospective investors. We are proud to announce a feature enhancement to the Genesis Group functionality to address this concern! Genesis participants can “pre-commit” their FEI from the bonding curve to go straight to the IDO to purchase TRIBE at Genesis completion. As long as you are in the Genesis Group at any time, you can be the first purchaser on the IDO before any bots get a chance! The pre-commit feature allows you to commit any percentage of your stake in Genesis.
To illustrate the pre-commit feature, let’s say you personally have 1% of Genesis ETH staked and pre-commit half of it. Now the Genesis Group closes with enough ETH to purchase 100m FEI on the bonding curve. Without the pre-commitment, you would be entitled to 1m FEI and 1% of the Genesis TRIBE. With the pre-commitment, you get 500k FEI and the remaining 500k goes to the IDO to purchase TRIBE.
All pre-committed FEI get the same TRIBE price and the very first transaction on the IDO.
Fei Protocol will set aside 10% of the TRIBE supply for staking rewards. The staked asset will be FEI-TRIBE Uniswap LP tokens. This provides a way for users to deploy their FEI post-Genesis to earn more of a share in Fei Protocol governance. It also increases the liquidity of TRIBE for potential buyers.
The staking rewards will follow a linearly decreasing schedule over two years. The staking contract was specially designed by the Fei Protocol team to be completely fluid with no epochs or lockups. We will publish another post on Fei Protocol staking and its novel mechanisms before the Genesis
The remaining TRIBE holders control the DAO Treasury with 40% of the initial supply. The rationale behind such a large treasury is for two main reasons. First, we as the development team feel that the Community will be great stewards and partners with us when deciding where best to allocate these TRIBE tokens. Second, we want to seriously prioritize ways to distribute governance into the hands of users in a non-capital dependent way. The Genesis Group and IDO, while designed to be fair in a proportional way, still favor users with more capital. We feel an appropriate balance between capital dependent and non-capital dependent rewards will create a robust and incentive-aligned Community.
Fei Core Team
We care about attracting people to the protocol who think long-term. That is why we are back-weighting the distribution of tokens to the team. Approximately 13% of the initial TRIBE supply belongs to the Fei Core Team.
These tokens are subject to 5-year back-weighted vesting. Team members receive in each of the 5 years 10%, 15%, 20%, 25%, and 30%, respectively. We want to be meaningfully incentivized to continue supporting this protocol for the long-term, and voluntarily chose this vesting schedule to put our money where our mouths are. We are looking to set a new standard in the DeFi space by encouraging long-term alignment.
Almost half of this allocation is earmarked for future core team members! We are always looking for more amazing and talented people to work with. If you are interested, we welcome your DMs via our Twitter or Discord.
Note: This vesting and distribution will be controlled by the company, not the smart contract, for code simplicity and accounting purposes. The contract vesting follows the 4-year linearity of the investor allocation.
We feel strongly that the right partnerships are critical to the long-term success of the protocol. The Fei Core Team raised funding ahead of Genesis to fund extensive security audits and recruit top tier talent for the protocol. We are fortunate to have a set of world-class investors who are aligned with our vision for Fei Protocol. They are ready to help with mechanism design, regulatory conversations and lobbying, and liquidity provision right alongside the Community.
We want to clearly demonstrate that the Community and protocol success are our top priorities with this token distribution. Investors are subject to a four-year linear lockup where the Community gets immediate liquidity.
The Community directly receives twice as many tokens at Genesis as investors and has access to 6x as many if including the IDO. If the Community does not have conviction in the project’s future, then they should be able to exit before the core team and investors — not the other way around.
This is our personal favorite part of the token allocation. 2% of the initial TRIBE will be owned by the core team and available for distribution to the Community as grants. These grants might be oriented towards furthering crypto and DeFi innovations, bug bounties for Fei Protocol, or simply towards causes we care about. These tokens come straight from the team’s stake as a gift. We love this Tribe 💚.
The TRIBE token distribution illustrates our project’s priorities:
- Community first. Always.
- A mix of non-capital and capital-based rewards
- The right amount of investor partnerships
- A meaningfully incentivized but non-controlling core team
- Appropriate vesting to reflect long-term alignment
There are always tradeoffs to every decision, especially ones involving ownership. We hope you trust our judgment and appreciate the level of care put into structuring Fei Protocol and TRIBE for short- and long-term success.