$PACT tokenomics v2 — new improvement proposals.

Since the launch of $PACT, the impactMarket governance token, through an IDO on Polkastarter, last Dec 22nd, we have been closely looking at all the working mechanisms and listening to our community and their feedback about improvements we should consider.

So, we have decided to introduce the first set of several improvements and new mechanisms that we believe will increase the utility and importance of the PACT token for the health, growth, and value of the protocol. 🚨 Some of those were already audited, submitted as proposals, and voted by token holders during the past several weeks. 🚨

Staking $PACT

PACT holders are now able to stake their PACT tokens (without losing the ability to vote), allowing them to increase their governance power, get extra rewards, and boost their donations. As main benefits, it includes:

• A combined effect on donations: For example, if someone has donated $1000 cUSD in the past 30 epochs/days, and has 2M PACT staked, it will be considered as a $1200 cUSD ($1000 + 2M/10K) contribution for the calculation of the daily PACT rewards allocation. (1 epoch = 24 hours).
• Daily rewards based on how much PACT is staked: For example, if someone has 10K PACT staked, it will account, for the calculation formula, as a $1 cUSD (Celo Dollar) monthly contribution on each epoch while those tokens are staked, even if no contribution was made in the previous 30 epochs/days.
• Include a minimum waiting/cooldown time (15 epochs) before being able to claim/withdraw PACT tokens after unstaking them.

impact Farming new calculation formula

After a few weeks with the initial impact Farming formula (also known as donation miner), which was calculated based on how much each has contributed vs all $cUSD raised on each epoch, we’ve realized that a significant amount of contributors were looking for quickly profitable donations, meaning the $ value of PACT rewards after each epoch were greater than the amount donated.

This drove a significant constant sell pressure immediately after each epoch’s end, in a very early stage of the token. The market price of PACT is a strong influencer/driver for a recurring inflow of contributions. More inflow means the protocol can reach more vulnerable communities, and reach more beneficiaries, while driving DeFi adoption through those who need it the most. In these proposals, contributors are able to Stake their allocated PACT rewards after each epoch, and we’ve improved the rewards calculation formula to:

• Introduce a fairer distribution and increase the unpredictability of the rewards, by expanding the contributions calculation time to 30 days/epochs. This means that the number of PACT rewards per contributor for each epoch is now based on how much was donated/contributed vs the total raised during the previous 30 epochs. This means that, for each donation, the contributor will get PACTs rewards allocated for the next 30 days, and will be able to stake allocated rewards after each epoch.
• Include staking as part of the calculation, as an incentive to hold the tokens and support the protocol, so the amount of rewards is based both on how much was donated and how much PACT is staked.
• Remove the need to contribute to be able to get PACT rewards allocated every epoch when staking.

NOTE: Similar to unstaking, to claim/withdraw allocated PACT rewards, there is a cooldown time of 15 epochs after being allocated. But to stake those allocated PACT rewards, there is no cooldown.

The new calculation formula is now based on a score for each user correlated with how much has been donated and the amount of PACT staked, calculated after each epoch.

• User score = ($cUSD donated by the user in the previous 30 epochs + # PACT staked by the user / 10K*)
• $PACT rewards per user on each epoch = # new PACT rewards unlocked on current epoch * User score / (Total donated in the past 30 epochs + Total PACT staked /10K)

*10K is an important weight variable on # PACTs for the staking mechanism. We plan to submit proposals to adapt it over time, as it is one of the main drivers of the Staking APR calculation.

Staking APR calculation formula: (Total PACT staked / 10K) / (Total $ donated in the last 30 epochs + Total PACT staked / 10K) * New PACTs available in the current epoch / Total PACTs staked * 365 * 100

Example: In the current epoch/day, new 3.5M PACT tokens will be available/unlocked to be allocated among contributors and stakers.

User A: Contributed $50K in the previous 30 epochs. No PACTs staked.
User B: Contributed $40K in the previous 30 epochs, & has 50M PACT staked.
User C: No contributions, but has 50M PACT staked.
Total = $50K + $40K + (50M+50M)/10K = 100K

Staking APR calculation:
(100M / 10K) / (90K + 100M / 10K) * 3.5M / 100M * 365 * 100 = ~127.8%

Staking APY (if you restake/compound the PACT rewards after each epoch):
(1 + (APR / 365))^(365) -1 = ~258.15%

Scores & Rewards simulation after current epoch:
User A score: 50K | Rewards: 3.5M * 50K / 100K = ~1,750,000 PACT
User B score: 45K | Rewards: 3.5M * 45K / 100K = ~1,575,000 PACT
User C score: 5K | Rewards: 3.5M * 5K / 100K = ~175,000 PACT

More assets (under development)

Add the possibility to contribute with more assets beyond $cUSD, while also allowing communities to choose which asset they want to receive as UBI. Each asset will need to be approved by token holders through a proposal to be eligible for the impact Farming mechanism. Those assets will be deposited in the DAO Treasury and managed by token holders.

Contributions in other assets beyond $cUSD will be accounted as half of the value for the impact farming rewards calculation. For example, $50 worth of UBE would account for the rewards calculation as if it was a $25 cUSD donation.

PACT treasury consolidation (under development)

Currently, when a $cUSD contribution is made, it is deposited in the treasury (doing nothing) as liquidity to support vulnerable communities through UBI. We’re proposing that all raised $cUSD automatically earn interest (on Moola) while not used/requested by communities.

When a community requests additional funding from the DAO, it claims its $cUSD amount from Moola and uses the earned interest of that amount to automatically swap for $PACT (through Ubeswap) and deposit on the DAO treasury.

We’re expecting to submit the remaining proposals under development during the next several weeks, as the second phase of improvements for the token utility and protocol.

If you have any questions, you can reach out to us at impactmarket.com, docs.impactmarket.com, or directly by emailing us at hello@impactmarket.com.

You can also find us on Medium, Facebook, Instagram, LinkedIn, Twitter, GitHub, Youtube, Telegram, and Discord.

Dare to dream with us!

You can be part of the change and empower people all around the world. Your contribution goes to the UBI communities, and when donating cUSD to a specific community or through the impact Farming page or to a specific community, you get $PACT tokens as a reward for the impact you´ll have made. You can also stake your $PACT to get even more rewards.

impactMarket (The Human Empowerment Protocol)

impactMarket provides accessible financial solutions to empower underprivileged people all over the world, unlocking opportunities and human potential. Our inclusive protocol is transparent, reliable, and borderless. It operates as a DAO on top of the Celo network, using $PACT as its governance token while running autonomously through smart contracts.

impactLabs (the company)

impactLabs Lda, based in Portugal, was founded in Nov 2020 by Marco Barbosa, Bernardo Vieira, Afonso Barbosa, and eSolidar. The company is focused on building accessible decentralized systems to unleash human potential and disrupt access to finance while driving DeFi adoption.