SOFA.org: Tokenomics

Published in

SOFAorg

4 min readMay 31, 2024

SOFA.org has meticulously designed a dual-token model to operate ecosystem tokenomics. The protocol’s native utility token is called $RCH, while the governance token is appropriately named $SOFA.

Let’s explore the vibrant ecosystem of SOFA.org, powered by $RCH and $SOFA tokens.

🤝 Meet $RCH: The Utility Token

$RCH is SOFA’s main token, and you can’t just buy it early or get it from the developers. To earn $RCH, you have to use SOFA.org’s services. This ensures that only active users benefit, avoiding quick, harmful sell-offs seen in other projects. Each day, users who transact on SOFA.org get $RCH based on their activity. Not even the project developers have any ownership of $RCH on day 1 — how fair is THAT? This fair launch method ensures long-term success and benefits for the true users of the platform.

Total Supply: Capped at 37,000,000 $RCH

Pre-Minted Supply: 67.6% (25 million) locked in a Uniswap liquidity pool with $ETH

Airdrop Supply: 32.3% released to users on a set schedule

Revenue Usage: All SOFA protocol revenue buys and burns $RCH from Uniswap

Deflationary Mechanism: Increased transactions lead to more $RCH burns, reducing supply and increasing value

Long-Term Value: $RCH price rises with protocol usage, benefiting active users and holders

At project launch, 67.6% of $RCH (25 million tokens) is pre-minted and placed into Uniswap’s V3 pool on Ethereum along with 600 $ETH as the initial liquidity pool (600 $ETH as current number and will likely increase before launch).

Please note, this initial liquidity is not owned by anyone. After depositing into the LP, the corresponding Uniswap LP tokens are promptly destroyed, ensuring that the token’s initial liquidity pool can never be withdrawn.

This ensures that the $RCH float available will eventually be far less than what was originally locked into the LP, thereby setting an effective floor on the value of $RCH at its initial price.

🪂 Did Someone Say Airdrops?!?!

Furthermore, the remaining 32.3% (12 million tokens) of $RCH will be airdropped to ecosystem users according to a predetermined release schedule.

Initially, 12,500 of $RCH tokens will be airdropped daily over the first 180 days. After which, the airdropped amounts will decrease by an incremental 20% every 180 days ad infinitum.

📝Other $RCH Notes

Positive Reflexivity: More transactions increase $RCH price, making airdrops more valuable and encouraging more transactions.

Self-Correcting Mechanism: If $RCH price drops, more tokens get burned, stabilizing the price until transactions pick up again.

No Exit Dumps: $RCH’s fair launch prevents sudden large sell-offs since no one gets $RCH at launch.

Future Growth: New DeFi projects can join the SOFA.org ecosystem as partners.

🤝 Meet $SOFA: The Governance Token

The $SOFA token is the governance token of the SOFA.org ecosystem. As a decentralized, non-profit, open-source technology organization, all decisions within the SOFA.org ecosystem are determined by votes from $SOFA token holders. As a pure governance token, $SOFA does not participate in any profit sharing within the ecosystem.

🎤 The Voice of the Community

Subject Matters Pertaining to Governance Votes:

1️⃣ Types of financial products to be onboarded

2️⃣ Determination of the eligible basket of supported collateral (USDT etc.)

3️⃣ Admission of new partner protocols into the SOFA.org ecosystem

4️⃣ Distribution mix % of daily $RCH airdrops between the various on-boarded products

5️⃣ Distribution mix % of daily $RCH airdrops amongst ecosystem protocols

6️⃣ Pace of $RCH airdrops

7️⃣ And other decisions to come as the ecosystem matures

Acquiring $SOFA Tokens

▶️ Early Association Members and Developers: SOFA.org is well-attended and supported by some of the most influential Web3 institutions and builders, who will be providing the initial as well as on-going infrastructure support of the ecosystem.

▶️ Ecosystem Advisors: Web3 industry and thought leaders who are sharing their wisdom for the continued betterment of the project.

▶️ Active Community Members: Users and members who are actively participating in our public community activities during the initial stages of the project.

▶️ Early Position Token Recognition: For both CeFi and DeFi partners who are able to early-adopt and recognize our Position Tokens as eligible collateral on their platforms.

▶️ Early AMM Liquidity Contributors: Project supporters who graciously contributed non-withdrawable ETH liquidity to the initial Uniswap LP for the $RCH pool.