Token distribution, circulating supply and DAO

As of today, there is 74,450,339 JRT in circulation.

But there will be 565M tokens in total!

This article aims to explain how tokens will be distributed and how they will arrive in the circulating supply, and how aspects of the tokeneconomics may influence the number of tokens in the markets.

Token repartition

The following table shows the initial repartition of the 565M tokens:

• Token sale: tokens dedicated to fundraising (we have a little less than 10M left);
• Bounty: tokens distributed to participants of the different bounty campaigns that took place during the public sale (regretfully…);
• DAO (temporary address): tokens dedicated to rewards programs (an article will be dedicated to this);
• Company (address): tokens reserved for the team;
• Founders: tokens distributed to shareholders;
• Reserve (address): tokens dedicated to providing liquidity

Locked tokens

Let us now look at the distribution of these tokens, starting with the tokens, which will be locked for a long time and should, therefore, not be counted in the circulating supply.

• For private and public sale (which took place between 2017 and 2019), the 260M $JRT will be unlocked from January 2021 until December 2022, at a rate which is still to be determined (it will not be linear but will follow a curve);

While these tokens are locked, they will allow their owners to vote and collect all the fees and rewards associated; we also may issue L-JRT, to tokenized these locked tokens and make them liquid;

• The company owns 30M $JRT, of which 10% is released each year for distribution to the team members or used as a means of payment or in partnerships, for example;
• The DAO holds 100M $JRT which funds the various reward and staking programs and will be distributed over the next X years with annual inflation of Y% and a lock on Z weeks following Synthetix model (the DAO will decide the values of X, Y, and Z);
• The reserve holds 10M $JRT, and 5M have already been withdrawn and are already in circulation, of which 2.5M are in Balancer and Uniswap pools, the rest being in the wallet, along with some other 200K tokens from the company.

Therefore, these tokens will not be in circulation anytime soon, and we can, therefore, subtract 395M $ JRT from the total, which leaves 170M tokens.

Increase of the circulating supply

The circulating supply will increase two times following two events.

First increase

As of today 74,450,339 JRT are in circulation, but this number will increase due to few factors:

• 20,769,619.21 JRT have not been withdrawn by the private and public token sale participants (which took place between 2017 and 2019) even though they are sitting on an x40;
• The continuous token sale participants (the last token sale which happened between March and June 2020) have yet to withdraw their 12,692,571.02 JRT ; they will be claimed by these participants from August the 21st to October the 10th following this schedule;

We will withdraw these tokens into a separated “token sale wallet”, causing the circulating supply to suddenly increase from 74.4M to 107.9M.

Everytime a token sale participant will require their tokens to be withdrawn, there will be sent from this wallet to theirs.

Second increase

At the end of this year, the circulating supply will increase again.

The participants of the last token sale (the continuous one) bought their token at a discounted price (using the 7-days moving average price as a price reference) in exchange of a token lock:

• 31.6% of the tokens had a 90 days time-locked; those are the 12.69M tokens we were referring just above (which will be distributed following this schedule);
• and the rest of their tokens, amounting for 49,018,625.75 JRT, is locked until the end of this year; however, not all of these 40M $JRTs will necessarily go into the circulating supply as participants willing to prove their long-term vision will be offered to lock their tokens into the yet-to-announced Hodl program which will reward them with $JRT;

Like for the private and public token sale participants locked $JRT, these tokens will be able to be used to vote in the DAO and collect fees and rewards.

Therefore, by the end of this year, a maximum of 49M JRT will be added into the circulating supply, increasing it to a maximum of 160M $JRT and a market valuation of $32M at the current market price.

Tokeneconomics impacting the circulating supply

A large portion of the $JRT is expected to be staked in the DAO and in the Jarvis nodes (Validators and Relayers), as well as in the various liquidity pools, which will directly impact the scarcity of $JRT on the market.

The Jarvis DAO

The DAO governs the protocols, from the fee policy to the dispute that may arise; it will also manage a 100M $JRT farming fund (for funding the various reward campaigns); the DAO will also manage money: all the fees paid to the protocols, and all the tokens farmed by them (or by the DAO itself), are collected by the DAO which will vote on their allocation.

If Jarvis meets the success we all expect, the DAO may be a very powerful decentralized organization holding other governance tokens as well as cash in form of stablecoins.

• A large number of holders will stake their tokens within the DAO to vote and eventually to collect commissions; it is necessary to vote to receive any kind of rewards (in the form of fees collected by the protocols, $JRT or other tokens farmed by the protocols);
• The DAO will support Uniswap, Balancer, and Bancor liquidity pools tokens to be staked; the number of $JRTs in these pools will be taken into account for calculating the voting power;
• The longer the tokens are staked, the bigger the voting power will be (which also has an impact when collecting the rewards);
• Tokens used for voting will be locked for 7 days.

These measures encourage locking tokens in the DAO or delegating them to a third party in order to capture the value generated by the protocols.

The nodes

Stakers in Relayers and Validators will also be involved in removing large numbers of tokens from the market. While more details will be given later this year, the amount of $JRT that nodes will require to stake will directly be linked to the TVL in the Jarvis Network.

Therefore, the bigger the network grows, the more $JRT will be required. Users will be able to stake from the Jarvis Dashboard dApp or from partnering third parties.

Eventually, liquidity providers in the permissioned Margineum protocol will be required to stake $JRT in order to run a dealing desk node.

MISC

Finally, other mechanisms will be put in place to valorize and monetize $JRT:

• following many discussions with valuable community members, updated tokeneconomics will allow monetizing $JRT, such as using it as collateral to access leverage, or in farming programs with other projects of the DeFi;
• dApps developed by Jarvis will introduce some kind of marketing-oriented staking mechanisms, such as staking X $JRT to benefit from reduced commissions or from the 0-fee fiat-onramp for synthetics assets.

Finally, with the buy-back program in place, we expect to see the recycling of the tokens. Part of the commissions collected by dApps in Jarvis Network could be used to buy-back $JRT from the open market, replenish the DAO funds, and re-inject them in the various reward programs (therefore locking them for a while). DAO can also vote on the budget allocation for such a program.

Pascal (pascal.jarvis.eth on Twitter).

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