Lition burns 75% of team tokens as their part of seed investor lockup extension (29.5m LIT)
In the last few months, we have been taking many steps to ensure that our token economy is as viable and futureproof as possible. In the last update to the token metrics, we agreed with our investors and advisors to enlarge their lockup periods in the interest of all parties involved. This step was made to give a strong signal to the community and has seen positive effects on price stability. As hinted in the previous article and in the AMA, we have some more updates to the Lition token metrics.
We will burn 75% of team tokens and 70% of ecosystem tokens as part of our commitment and recent negotiations with our investors and adivsors to reduce token supply and strengthen the long-term value of the Lition token.
Based on the existing token unlock schedule, there are a total of 11.8 million LIT tokens that are intended for the team and 29.6 million LIT tokens intended to be used as ecosystem funds. Therefore, 8.8 million (75%) from the team token and 20.7 million (70%) from the ecosystem tokens allocation will be totally burned and will not increase current circulating supply. In total the supply will be lowered by 29.5 million tokens.
Previous Negotiation with Investors and Advisors
As announced earlier this week, we’ve reached an agreement with investors and advisors to extend their lockup schedule. Rather than being released over the next 2 months, the 18.8 million will be vested for approx. 2 years with 25% unlocks at the end of every 6 months, starting at the end of June this year: Read the full story here
Team Tokens
The 11.8 million team tokens were scheduled to be distributed 25% each year starting in April 2020. 100% of these tokens will be burned in 2020, 2022, and 2023, leaving just 2.95 million remaining to be unlocked in April 2021.
Ecosystem Tokens
Ecosystem tokens were scheduled to be distributed 12.5% every 90 days. This schedule will remain the same with 70% being burned at each unlock. This leaves just 1.77 million remaining to be distributed each 90 days until completed in April 2021.
The Lition team has also burned 100% of the previous 2 Ecosystem unlocks resulting in an additional 15,497,481 tokens being permanently removed from the total supply.
Ecosystem tokens were originally intended for general uses such as developer incentives, blockchain tests, sidechain creation/bootstrapping, and other activities. As we have reached an advanced stage of the project, most of these activities requiring token payments will only increase inflation and negatively affect the token economy and price. We have therefore decided to cut the unnecessary part of the ecosystem vault. We are confident that we will continue to develop and reach greater heights using best financial practices and prudent expenditure. However, where there is need for tokens, the open market will serve as the primary source of purchases.
Resulting new lockup schedule considering all changes
The following chart summarizes the outcome of all changes, i.e. the new extension of investor token locks and the team and ecosystem token burn.
In closing
The Lition team has been dedicated to this project from the very beginning and are fully motivated by the work that we have accomplished so far. While every team obviously would like to keep team tokens, we willingly accepted this harsh measure as part of the investor negotiations considering the overall Lition situation.
We are committing ourselves by burning 75% of our tokens and having our first lockup due in April 2021 because we are believing in Lition’s long-term vision. We have been humbled by the support we have received from the community and are looking forward to another year of achievements.
We thank you for your support.
