Announcing SnowSwap’s governance token
We are excited to announce SNOW, the governance token for SnowSwap, which will be used to bootstrap liquidity as well as to organize and incentivize the community around the protocol.
UPDATES (10/9): Added SNOW token contract address: 0xfe9a29ab92522d14fc65880d817214261d8479ae
UPDATES (10/1): Modified split of 7% early rewards (4% pre-announcement, 3% post) and allocated 1% for trading incentives. You asked, we listened!
Highlights:
- Initial retroactive distribution to early adopters will be on October 8th
- Fair launch with no premine; 80% of tokens distributed to liquidity providers with 7% distributed retroactively to early LPs and users;
- 2% of tokens will be distributed via a $BASED Moonbase Rover (more details coming soon!)
- 8% of tokens allocated to SnowSwap Foundation supporting the growth of the ecosystem by providing grants to value-adding forks, frontend integrations, and other contributors;
- Incentivized team committed to the long-term vision and success of the project;
- Smoother issuance curves to allow for gradual distribution and decentralization;
- Phased liquidity mining program with incentives that evolve as the protocol grows.
SNOW Token Value and Functions
As the governance token of SnowSwap, SNOW has the following core functions:
- To enable community-driven governance of SnowSwap
- To bootstrap liquidity for the SnowSwap’ ecosystem.
Token Allocation
500,000 SNOW tokens will be minted at genesis with the following allocation:
80% — to Liquidity providers including 7% released retrospectively to early LPs and users of SnowSwap
10% — to the Dev Fund (team) with a 3-year vesting schedule; 2% of the tokens will vest at launch to cover the prior development cost and provide several months of runway
8% — to the SnowSwap Foundation treasury to incentivize growth of the SnowSwap ecosystem. The tokens will be distributed based on governance proposals to incentivize various SnowSwap ecosystem growth initiatives:
- to pay for a security audit;
- partner programs for frontends integrating SnowSwap
- support of the value-adding forks,
- contributor grants and various community initiatives
2% — made available to the $BASED community via Moonbase. A Rover will be deployed for SNOW and 10,000 SNOW will be sent to the Rover on a 1-year continuous linear vesting schedule.
Token Issuance Schedule
SNOW will be distributed over a period of 3 years with continuous vesting according to the following release schedule:
On launch day, 10% of the maximum SNOW token supply will be released to the market, including 7% retrospective rewards to early LPs, 2% to the dev team to reimburse development costs and provide another few months of runway, and 1% to the Foundation to fund the security audit.
SNOW token contract: 0xfe9a29ab92522d14fc65880d817214261d8479ae
Liquidity Mining
SnowSwap will conduct multiple liquidity mining programs in several phases, each with a set of incentives designed to be optimal for the protocol at that stage.
50% of the total supply will be distributed to LPs during the first year in the following phases:
Phase 1: Retroactive rewards — 7% of all tokens allocated to early users and LPs and will be claimable over two airdrops on Oct 8th and Oct 12th.
There will be two airdrops. The snapshot for the first airdrop will be from the launch of SnowSwap until September 28th at 10:10AM PST. The snapshot for the second airdrop will be from September 28th 10:10AM PST to October 12th at 9:00pm PST.
LPs that provided liquidity during the snapshot period will receive SNOW rewards. Rewards will be calculated as a function of share of pool per block. In addition, early beta testers of SnowSwap that had failed transactions will receive additional SNOW per failed transaction, for up to two transactions per address.
4% of those tokens will be allocated to early LPs, addresses that interacted with the SnowSwap contracts (even if the transaction failed), and users who bought the LP token from Uniswap before September 28th at 10:10AM PST.
The initial 4% will be broken down as follows:
- 1% as a base reward for all users
- 2.9% bonus for liquidity providers
- 0.1% for failed transactions
The remaining 3% of tokens will be made available to liquidity providers and traders, from now until October 12th at 9:00PM PST, and will be distributed on the basis of liquidity provided over time. Only trades over $1000 will be eligible to receive rewards. The breakdown for the following 3% is as follows:
- 2% for liquidity providers
- 1% for all addresses which trade at least $1000 in a single trade
The initial retroactive distribution of SNOW will be on October 8th at 9:00PM PST. The second airdrop will be on October 12th at 9:00PM PST.
Phase 2: Initial SNOW distribution program for LPs — 30% of all tokens allocated to LPs
On October 12th at 9:00PM PST, staking pools will be launched. SNOW tokens will be distributed to liquidity providers for staking their SnowSwap LP tokens with a distribution curve weighted in favor of early LPs that provide liquidity when total pool size is low. The rewards will be distributed in proportion to the amount of liquidity supplied, multiplied by a “rewards coefficient” that increases with time and resets to 1 when the liquidity is withdrawn. There will be no fixed-length lockup commitments.
We will also incentivize Uniswap pools for SnowSwap LP tokens (ySnow and ycrvSnow) and SNOW to create a gas-optimized liquidity solution for LP tokens, as well as to create liquid markets for SNOW. The process of earning SNOW for supplying liquidity into such pools will be as follows:
- SnowSwap LPs should supply their LP tokens or SNOW to one of the incentivized Uniswap pools (eg. ycrvSNOW/USDC, SNOW/ETH, SNOW/LINK, SNOW/UNI)
- To earn SNOW, users will stake their Uniswap LP tokens in the staking pools on the SnowSwap website.
Phase 3: Staking SNOW in governance vaults — 13% of tokens allocated to LPs
In the weeks following the initial distribution of SNOW, SNOW holders will be able to earn additional rewards in SNOW for locking their SNOW tokens in the governance vaults. Phase 3 is designed to optimize for and to reward community participation.
The rest 30% of the SNOW tokens allocated to LPs will be continuously vested in the community treasury and allocated during the following 2 years to additional liquidity mining programs which will be decided by governance. In other words, these tokens will be distributed to liquidity providers but the mechanics through which this happens will be left up to governance.
Governance and Fee Distribution:
- SNOW has 0 value. Do not buy this token. The only functionality offered by SNOW is the ability to vote on governance proposals to modify or add to the SnowSwap protocol. SNOW does not come with any sort of fee distribution by default.
Further details regarding governance (off-chain vs. on-chain voting mechanisms and other optimizations around gas saving) will be available shortly in the following article.
SnowSwap Foundation
We believe in playing positive-sum games and encouraging innovation. Tesla’s electric cars are open-source to help make the world a better place. Code should be as well. By having code that is made to be forked, we create network value and vampires are less likely to be successful.
Offensive Forkability
The SnowSwap Foundation will invest in teams looking to add value to the ecosystem. Examples are: Protocol design-level experiments, and customization and/or localization for different market segments.
Possible grant requirements:
- Security Audits (via SnowSwap partner);
- Initial capital for development costs to provide runway while allowing for a fair launch;
- Paid forward grants;
- A fork must have some value-added integration with SnowSwap
Special Thanks
We would like to thank the following community members for their contributions to the SnowSwap ecosystem and for your advice.
-The yEarn Community
-Hansolar
-Zai
-JakeFromStateFarm
And the Asia Blockchain Ecosystem which has made building, collaborating, incorporating and growing our project possible.
-And everyone else for your contributions
