IOV Token Donation Schedule
IOV SAS will donate the vast majority of its tokens to the community fund.
The modernization of the tokenomics for the IOV token started when IOV SAS, the company behind starnames, donated 3 million tokens to the community fund and then an on-chain proposal to effectively burn them passed with nearly unanimous consent.
Why Does IOV Need To Modernize Its Tokenomics?
At inception, IOV SAS focused on blockchain innovation including developing the Weave SDK, IOV Core (now rolled into CosmJS), and eventually even led to CosmWasm. The focus on innovation required significant allocations in the ICO token distribution for research and development, grants, tech incentives, bounties, and the like. In February, when Karim Ganem became CEO, IOV SAS pivoted to a business focus built on Starnames, which made the tokens earmarked for blockchain innovation difficult to justify. Hence the need to modernize.
In order to continue modernizing the tokenomics to the benefit of token holders, IOV SAS will send over 20 million more tokens to the community fund in the coming months. This article will explain some of the mechanics and the consequences of IOV SAS’s actions.
Mechanics
In order to send funds to the community pool, IOV SAS will have to undelegate (unbond) them from validators. In no way should that undelegate action be construed as a slight against any validator. The validators securing the Starname (IOV) blockchain are stellar. :)
The unbonding time is 3 days, which means that the undelegated tokens cannot immediately be sent to the community pool. Plus, the tokens are controlled by multisig accounts, which require coordination of signers’ schedules. That coordination has proven to be difficult in the past. IOV SAS is committed to taking action, so don’t fret if the tokens aren’t sent to the community pool instantly on day 3 after unbonding.
Consequences
The APY for staked IOV tokens is currently over 20%. As IOV SAS undelegates tokens, the ratio of staked tokens to circulating tokens will go down. That means the APY will go up for even higher staking rewards for delegators!
Timing
IOV SAS delegated to 12 validators. The strategy for undelegating intentionally favors the validators with lesser voting power.
We will undelegate in 5 batches, starting with the top 3 validators in terms of voting power: in3s.com, ChainLayer, and StakeWithUs. The next batch will be from validators that received more than one delegation from IOV SAS: ATEAM, AC Validator, 01node, syncnode, and OpenTech Staking. The third batch will be Cosmostation, ATEAM, and Forbole. The fourth batch will be IRISnet, Stake Capital, and AC Validator. The last batch will be 01node, syncnode, and OpenTech Staking.
As mentioned, coordinating multisig signers’ schedules is a challenge, but we will make a best effort to donate to the community fund on the following schedule:
Augment indicates tokens that will be donated from the IOV SAS treasury in addition to the undelegated tokens.
Summary
IOV token holders will benefit from the reduction of tokens in the circulating supply and also benefit with an increase in staking rewards. Delegate your tokens to take advantage of the great APY!
Stay tuned! More modernization of our tokenomics is to come…
