JET Tokenomics, Lockup and Our Long-Term Vision
This has been the most significant week of announcements and technical milestones since Jet Protocol’s first test flight back in April 2021.This week has seen:
- The successful take-off of our mainnet on October 7
- The announcement of our JET token auction/listing partnership with Ascendex on October 8
- The closing of our follow-on round of funding
- Follow-on investors and IEO participants are buying at the same price
With so much happening, it’s easy to gloss over the details and importance of these events.
We’ve been listening to our community voice their interest in the tokenomics and reasoning behind our decision to structure the JET distribution as we did, and this blog post will go over just that here.
Token Lockup and Vesting Details
TL;DR — Most JET tokens are locked up for a long time (3 years), which leads to well-aligned incentives for everyone involved: the team, investors, community of users, and governance participants. Additionally, a large portion of the unlocked tokens are at the disposal of the DAO, and will require governance input on how they are allocated by stakeholders and community members.
- The fixed total supply of JET tokens is 1,700,000,000.
- Initial Circulating Supply: 156,257,200 JET.
- 25% of tokens to team & advisors, 0% unlocked at the 12 month cliff, and the rest vesting linearly over 24 months.
- 15% of tokens to seed investors, 0% unlocked following a 12 month cliff, with the rest vesting linearly over 24 months.
- 10% of tokens to follow-on investors, 0% unlocked following a 12 month cliff, with the rest vesting linearly over 24 months.
- 3.06% of tokens to Ascendex IEO + trading capital for market maker, 100% unlocked at TGE.
- 25.47% of tokens are under control of the DAO, 3% unlocked at TGE and the rest vesting linearly for 24 months. The rationale for lower % TGE unlock here is to prevent governance attack of DAO tokens.
- 21.47% of tokens are reserved for direct project contributors, the “dev fund”, 25% unlocked at TGE and the rest vesting linearly for 24 months.
Note on Project Contributors:
- These tokens are available to fund external contributors to Jet Protocol: governance facilitators, loan analysts, risk analysts, external development teams, education & training, and marketing efforts in the period while bootstrapping a stable and secure governance system.
- The dev fund is transferred to the DAO upon sufficient decentralization.
- These funds are subject to a lockup on a rolling basis of issuance.
When it comes to projects with a token economy, the vesting schedules utilized are critically important. This is due to market driven price action as well as the health and longevity of the protocol and making sure that crucial players have vested interests in the long-term success of the project.
We’re here to build a resilient, durable lending protocol, and we spent a significant amount of time finding the right investors to help us tackle the challenges ahead.
Our Fundraising Details
Jet closed an initial seed round of $4.8 million USD at a valuation of $32.5 million in June 2021 of this year. In this round we sold approximately 15% of the network tokens to investors. All of these tokens are locked with the same vesting schedule as previously described. These funds helped us rapidly hire a team of world class developers to build out Jet Protocol from the ground up with several innovative and differentiated features compared to other borrowing and lending protocols on Solana.
As we took flight towards mainnet release and our IEO with Ascendex, we realized there were strategic investors who were not included on the initial seed round but would add enormous value to our team from a technical and product roadmap perspective. With that, we decided to raise another $6.8 million at a valuation of $68 million.
A point worth noting here is that the latest investors in the Jet Protocol follow-on round bought at the same valuation as the Ascendex IEO!
0% of team, investor and advisor tokens are unlocked until June 2022, this will lead to an initial unlocked supply of roughly 450 million tokens in the first year. In this case, the term “unlocked” does not equate exactly to “circulating” as these funds are held and available by the DAO but are not available on the open market until distribution.
During the first year of venture operation (June 2021-June 2022) the only tokens unlocked will be from the ecosystem DAO fund and discretionary fund in order to actively and rapidly grow both the DAO’s decentralization efforts, while defending against governance attacks early on.
Any emission of tokens in the future will serve the primary purpose of growing the value of the protocol for all stakeholders.
We believe the strategic allocations of JET tokens set forth in our tokenomics model provides us not only with enough runway to build a team that can continue to innovate secure, never-before-seen DeFi primitives on Solana, but also bring forth these tools and instruments to the real world to create an impact on finance globally. A strong core team of Jet Protocol Pilots, matched with a well-equipped and thriving community of stakeholders in the Jet DAO, will power us through this long-haul flight to create something truly special and lasting in the world of new-age finance.
Please make sure your seats and table trays are in an upright position, fasten your seatbelts and enjoy the ride!
Disclaimer: The statements, proposals, and details contained above are informational only, and subject to change. We are in early stage development and may need to change dates, details, or the project as a whole based on the protocol, team, legal or regulatory needs, or due to developments of Solana.
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