Phase II, What’s Next, and Phase I vesting
It’s been a wild couple of days for the $QUARTZ family.
If you’re new to the $QUARTZ family, welcome. If you’ve been a part of the family for a while, we’re glad you’ve stuck around for the long haul.
After our Phase I sale in May, we promised we would remain committed to the growth and success of Sandclock. And we have kept that promise every step of the way. Now, as we conclude Phase II, the sentiment remains. Onwards, $QUARTZ Family!
At the time this article is passing its final edit (October 26th 17:40 UTC), we deployed a Balancer LBP and sold 1.21 million $QUARTZ, raising $14.26 million.
An impressive feat that no one on the team was expecting. No one. We were both honored and extremely anxious: this surge of interest was beyond our wildest dreams, and we had to make some hard decisions to protect the project, our runway, and also our community (from cannibalizing one another).
Before we get to that, here are some nice numbers.
Tokens sold: 1.21 million
Amount raised: $14.26 million
Circulating supply: 2.9 million
Market cap: 43,438,345
Number of unique holders: 270 Phase I + 1004 Phase II.. 1274 unique QUARTZ holders
Length of auction: October 23rd until October 27th, 3.5 days
Let’s talk about liquidity. Sandclock knows mercenary liquidity is a problem. Liquidity tends to dry up at the end of the rewards period. So we created an innovative plan to tackle these challenges and deepen our liquidity as much as possible, as fast as possible.
These are the plans for incentivizing liquidity, in this order. They tie in with the rationale behind Phase I vesting.
The QUARTZ/USDC liquidity mining program starts on November 3rd.
Sushi Onsen 🍣
ELI5: Provide liquidity, get delicious $SUSHI and $QUARTZ for your troubles. The $QUARTZ is vested linearly over a short period of time.
Why Sushi? We like the Sushibois. They do their deadlifts and sprinkle delicious, umami rewards on $QUARTZ through the Onsen program.
Onsen is a liquidity provision reward system for new, desirable tokens. Tokens on the Onsen menu are a source of yield for users who provide liquidity. Tokens selected to be on the Onsen “menu” are given an allocation of $SUSHI tokens per block to incentivize liquidity provision.
The benefit to being on the Onsen menu is that the projects themselves aren’t forced to incentivize their communities to provide liquidity for their tokens, because Sushi does it for them. This eases the burden of impermanent loss, and decreases the price impact/slippage of individual purchases, making purchasing more cost efficient.
The Sushi team has agreed to whitelist $QUARTZ so it can be added to their Onsen menu with 2x rewards. Once whitelisted, you will be able to stake your Sushi liquidity provision (LP) tokens and collect $SUSHI rewards… and vested $QUARTZ rewards
… and did you know Wintermute is going to market make for us?
UMA’s KPI Options
ELI5: LPers will receive KPI options which can be redeemed for $QUARTZ. The bigger the Liquidity pool is, the more $QUARTZ LP’s get to claim.
Mercenary liquidity is ephemeral. Everyone knows this. What if there was a way to align the long-term incentives of liquidity providers with the project?
Enter UMA’s KPI Options.
Key Performance Indicator (KPI) options are synthetic tokens that will pay out more rewards if a project’s KPI, in this case TWAP liquidity, reaches predetermined targets before a given expiry date. Every KPI option holder has an incentive to improve that KPI because their option will be worth more. This is intended to align individual token holder interests with the collective interests of the protocol.
In Sandclock’s case, the key performance indicator is TWAP liquidity over 3 months (a quarter). There are tiers. So as an example, if the liquidity is between a certain level, you can redeem 40% of the $QUARTZ in the contract. If it exceeds our predefined expectations, you will be able to redeem 100% of it!
We are working with the UMA team to whitelist $QUARTZ by passing a governance vote on UMA’s side. If you are a proud $UMA holder, vote!
Once we’ve passed and the team has deployed the oracle and the options, Sushi liquidity providers will enjoy a nice KPI option airdrop.
Note: this is not the be-all, end-all of our collaboration with UMA. These will also be used to increase our TVL.
ELI5: Swap your LP tokens for vested $QUARTZ at a discount.
At this point, most DeFi aficionados are familiar with the innovation spawned from the creative minds at OlympusDAO. For those who are not, allow us to explain.
The OlympusDAO is a firm believer that resilience is achieved through protocol-owned liquidity.
“But ser, you already said you will incentivize mercenary liquidity through Sushi’s Onsen and QUARTZ KPI Options!”
No. The mercenaries will reap their rewards, but before these programs end, we will launch our bonds program and capitalize on the fleeing.
So how does it work? Simple, but ingenious. If you provide liquidity on Sushi, you can sell us your LP token for $QUARTZ at a discounted price. This $QUARTZ can only be redeemed after a week, however, and from a game theoretic standpoint it is in everyone’s best interests to hold.
We have engaged the OlympusDAO team and hope to launch a bonds program in the near future!
Phase I Vesting
The painful part. When we did Phase I, users were told there would likely be no vesting, that waiting for TGE would be the cliff. Unfortunately, we were shortsighted, tried to appease some vocal parties, and frankly did not foresee this level of success. Both a blessing and a curse.
$QUARTZ went from $1 to 14.7217. A 14.7x increase.
If we were to add liquidity right now with no vesting, Phase I holders would likely drain the pool, hurting the project’s runway, Phase II participants, as well as Phase I holders. There is a possibility that whales would scoop up the bottom. But should we take the risk? And do we really want whales to control Sandclock? Probably not.
To put it bluntly, if 10% were to run for the door, 90% of Phase I participants would be unable to cash out. Meaning, 90% of Phase I participants would get hurt, as well as 100% of Phase II participants.
So how do we remedy this? We need the aforementioned liquidity incentives to go live, especially Sushi’s Onsen — we can wait for the others. With deep enough liquidity and sustained buy pressure, Phase I participants who no longer want to be a part of Sandclock’s history can exit without hurting anyone in the process.
Some community members noticed and spoke out. It was hard fought, but in the end their rationale was solid. So it was with a heavy heart that we decided to implement fixed vesting (e.g. n $QUARTZ / day) for phase I holders.
We apologize for the shifting goal posts.
Since the DAO resides on Polygon, we thought we could airdrop true $QUARTZ on Polygon, and cap the number of $QUARTZ that can be bridged to Ethereum per wallet. As we spoke to the Polygon team, we realized perhaps that it would be wiser to implement vesting instead, so that we do not have to deploy swapping contracts on both chains to exchange the wrapped $QUARTZ tokens for their respective genuine versions… A lot more gas efficient too, for would be swappers.
So without further ado, the vesting schedule.
Each wallet will be able to claim 100 $QUARTZ per day until we have $100mm of liquidity. If that is ever reached, we will rapidly and massively increase the amount of $QUARTZ per day that you can withdraw until everyone is unvested.
Now that we got that out of the way, let’s take a look at the liquidity printer that will become the standard way for lossless acquisition of protocol-owned liquidity.
What if we told you there is a riskless way to stack immense amounts of $QUARTZ while contributing to protocol-owned liquidity..?
Olympus DAO’s model is great. Sandclock is incredibly flexible. What happens when you combine the two?
Combining Sandclock’s perpetual DCA feature with Olympus DAO’s discounted bonds. Stack $QUARTZ while contributing to the long term health of the protocol.
ELI5: Deposit USD stables, yield is used to provide protocol with protocol-owned liquidity, you receive discounted $QUARTZ. The most positive-sum non-adversarial strategy in DeFi.
- Protocol (in this case, Sandclock) benefits from owning its liquidity, and sustained buying pressure on (in this case) $QUARTZ.
- Sushi benefits from the extra volume.
- Sandclock benefits from the performance fees.
- OlympusDAO benefits from the Olympus Pro fees.
- Users benefit from price appreciation of their assets and lower risk investments.
What’s there not to love? Now imagine this applied to every protocol launching on OP.
There are so many exciting things coming up for Sandclock…
As we conclude this fundraising period, we welcome you to dive even deeper into Sandclock. Watch our pitch deck if you haven’t yet. Explore our Medium. Chat with the team on Twitter and Discord. Really get to know Sandclock.
See you all soon.
-The Sandclock Team
The Next Generation of Wealth Creation.