In this article, we’ll discuss major factors that might have an impact on the price of the SWOP token.
Many are wondering about the SWOP token’s price at the issue time — when liquidity providers start to collect rewards in those tokens. The price will be determined by the market and we are not clairvoyant to be able to foresee it. However, we can offer you some facts about the token, and users will be able to come up with their own ideas about its possible price.
- SWOP is a governance token: users will be able to vote with it on major settings of the entire swop.fi system. Basically, it has real value.
- SWOP’s price is supported by swap fees in all swop.fi pools: the bigger the number of transactions, the higher SWOP’s price.
- The total supply of SWOP tokens will be significantly limited.
Governance functions
SWOP tokens will be required for governance of rewards in liquidity pools at later stages. Unlike the early bird stage, at which the provision of liquidity to any pool was rewarded with the same amount of SWOP tokens, at later stages, each pool’s reward will be determined by voting with SWOP tokens. A pool’s share of total votes will correspond to the proportion of proceeds from fees paid to its participants as rewards over the subsequent one-week period.
By voting, it will also be possible to change the system’s parameters, such as the swap fee size in pools. In addition, staked SWOP tokens used for voting will also collect rewards.
SWOP buyback
40% of proceeds from swap fees in swop.fi pools is used for buying SWOP tokens from the SWOP-USDN pool, driving up SWOP’s price. Daily, no more than 1% of all SWOP tokens available in a pool can be bought. Bought back SWOP tokens will be distributed as rewards on tokens staked for governance.
SWOP supply
Within the first year of the SWOP launch, the total supply will gradually increase from 0 to 2 mln:
- 1 mln will be gradually unlocked for users who provided liquidity at the early bird stage (the first few months of the service’s operation).
- Another 1 mln tokens will be gradually made available to liquidity providers as rewards.
Over the second year, another 1 mln SWOP tokens will be made available. Every subsequent year, SWOP supply will decrease by 25%.
This diagram shows the planned SWOP supply for the next 10 years. In 2031, about 75,000 new tokens will be issued, and the total supply will reach about 5.7 mln.
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