Shyft Network
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Shyft Network

The Shyft Network Token Distribution and Economics, Part 2

Providing further clarity on circulating supply during the first month, and supply schedules.

From the Shyft Network Team:

Hi everyone, as we begin to distribute and hand over the core protocol to the ecosystem and community, we wanted to quickly put out a high-level breakdown to provide more context, as well as a better high-level view of how we see economic circulation and productive supply across the Shyft Network.

We also want to notify anyone inspecting the contract’s values moving here and there, that we will be shortly moving assets to Cold Storage.

The way to look at Shyft Network’s economics is through streams of productivity and how those tranches are formulated, what they are intended to achieve, and what role they play across the macroeconomics as well as micro operational needs of any ecosystem or use case.

Circulating supply and total supply are often black and white, and the numbers are meant to be a macro snapshot of the entire universe. Within this universe, are a variety of asset tranches that are not meant to be a part of the active circulating supply, but are regulating pools of liquidity that were designed for certain use cases and network-effect-specific outcomes.

Below is a high-level breakdown that should help our community understand the distinction between Active Circulating Supply, Inactive Supply, and Total Supply, and how self-regulating asset pools play into this.

The sum of all liquidity in the universe

Let’s start by describing what self-regulating asset pools are. These pools are, primarily, use-case-controlled circulating reserves that become a part of the percentage of circulating supply, but are pre-programmed into smart contracts that have specific use cases and are autonomous applications (pre-built in-system use cases).

These tranches are designed to regulate and accelerate economic activity as cross-protocol total supply balancers. They are not meant for operational disbursement and are not allocated to participants of the ecosystem, but are liquidity pools that act to autonomously expand, decrease, accelerate or slow down the total usage and supply of the overall ecosystem. These asset pools were designed as mechanisms to help regulate and keep the ecosystem functional, plus incentivizing stability and longevity. Here are some examples of these self-regulating pools (for more information on these tranches, please see our Token Economics blog post):

1. Synthetic Asset Wrap Rewards
2. LP Pool & Liquidity Rewards
3. Economic Metagame
4. Next-Gen DEFI

What goes into the Active Circulating Supply? The following buckets and tranches are considered active or can be active when deployed (some will remain inactive for a long period of time), and can be counted towards the Active Circulating Supply when deployed on the network.

Operational Liquidity.

Over the next 7 years, these tranches and allocations are defined and allocated across the distribution schedules for the network’s operational activities. These are asset pools that can become active when they enter circulation. They are meant to provide liquidity to new projects, like compliant DeFi, strategic partnerships, marketing activities, and community DAOs that incentivize the growth of our developer community. Here are some specific tranches that work within this bucket:

Ecosystem Development (Support): To be used on operations, liquidity, partnerships, federation bootstrapping, marketing, foundation & DAO creation.
1. Public Distribution
2. Shyft Network Treasury
3. VASP Initializer

Purchaser, Team & Advisors

These are the incredible people who have made this global ecosystem possible by supporting it, advising, or directly working on it for the last 4 years, and who are committed to continue working alongside all of you as an open community over the coming years.

1. Ongoing Technical Partnerships
2. Purchasers (earlier purchaser private sale)
3. Strategic Partnerships (The latest strategic purchaser private sale)
4. Core Team

So, let’s add it up and see what it looks like for the first month after launch.

Active Initial Circulating Supply = Community + Team & Active Liquidity Management

Estimated Month 1 = 10,700,001 SHFT Active Initial Circulating Supply
(until Mainnet *subject to liquidity provisioning requirements*)

2,500,000 (Polkastarter sale)
1,616,666 (Marketing, primarily over 4 months, using linear distribution contracts)
— — — — — — -
4,116,666 (Total Active Tokens in the community)

Team & Active Liquidity Management
5,000,000 (Initial LP Pools)
1,583,334 (Marketing/Team budget)
— — — — — — -
6,583,335 (Total Active Tokens for active usage)

Inactive Liquidity

All remaining tokens will either be in cold storage (unless otherwise notified with due time through a major wide-access information platform) or placed into contract storage for autonomous applications to utilize as our technical production schedule progresses.

As liquidity requirements increase through use case demand, treasury reserves will be unlocked and allocated accordingly for liquidity provisioning partnerships.

These are all the tokens in circulating supply until the Shyft Mainnet launches (eta April, depending on federation members’ go ahead as, at this point, the network is not under the control of Shyft Network Inc.).

Following Mainnet Launch, the following buckets will form part of the Active Circulating Supply:

  • Federation Node Inflation (up to 2% of 2.5 billion tokens, per year, as economic requirements dictate);
  • Community Grants Programs (up 2% of 2.5 billion tokens, per year, as economic requirements dictate);
  • Shyft Network’s Veriscope — there are liquid tokens available to partners that will be utilizing them within Veriscope as network gas.

We will describe in Medium posts any additional buckets that become active shortly before the Shyft Mainnet launch. Also, stay tuned; during the following weeks we’ll roll out deep dives, roadmap and use cases.

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