$THX distribution and governance 📊 👩💻👨💻 — Tokenomics (II)
This week we shared the exciting news of the upcoming $THX launch, starting on the 22nd of November. Next we dove into the inner workings of THX Network and the basic tokenomics (part I) explaining Asset Pools, the modular diamond architecture and the role of the THX token in the system.
This article explores the token distribution, release schedule, governance and other token related plans. Let’s dive in! 🤿
THX token distribution 📊
The total supply of the THX token consists of 100M $THX (see the token contract). The various token allocations are designed in such a way that the community will be in charge of the majority of tokens (15% + 20% + 20% = 55%).
As we move towards community governance the core team plus the multisig holders (see below) will unlock the tokens according to the release schedule mentioned in the table below, starting from the token launch event at the beginning of Dec. 2021. Most of the smaller allocations will be released from lock-up in lump sums at a specific date, similar to so called ‘cliff vesting’.
However, in order to not flood the market with tokens the core team together with the community will have to design release schedules and incentive programs for the biggest two allocations, the ‘Community Incentives’ (20%) and ‘Community Treasury’ (20%) that gradually disperse tokens. For simplicity sake we assume here that these release schedule will be more or less linear for a period of 5 years, as we move forward on the roadmap.
Liquidity Bootstrapping Pool 10% (= token launch) 🚀
As announced, on 22 November 2021, a variant on an initial DEX offering (IDO) called a Liquidity Bootstrapping Pool (LBP) using Balancer v2 and the Copperlaunch.com front-end is planned.
A LPB is an auction mechanism and has the following benefits;
- optimal token price discovery
- establishing liquidity
- fair access for everyone
The pool starts as a 10% USDC / 90% THX pool with a starting amount of $125.000 USDC and 10.000.000 THX, which corresponds to a starting auction price of approximately ~$0.11. This will move towards a 90% USDC / 10% THX pool over a period of two weeks. Stay tuned for the exact details of this process, we’ll share those in the upcoming days.
Note that the tokens from the token launch are released immediately and are transferable (no vesting) meaning you can trade them.
Community Distribution 15% 🪂
A Merkle tree distribution (airdrop) to the wider DeFi and DAO enthusiast community, tentatively scheduled for Q2 2022. A community distribution has the following benefits;
- accelerates adoption of the protocol
- a wider distribution of the token, in time, creating additional and deeper markets
Specifics of the community distribution will be co-designed together with the community through Snapshot.org voting. For example; as a community we might decide that this token allocation has additional vesting conditions in order to avoid excessive sell pressure right after the airdrop. The minimum lock-up period of this allocation is 4 months.
Community Incentives 20% 👐
In the DeFi community it has become popular to do the main, or at least large parts of, token distribution through liquidity mining.
A more natural match for a community building product like THX Network is to use our own technology and Asset Pools to incentivize THX Network ecosystem usage. The various THX Network integrations can be used to accomplish this. At first this can be various forms of ‘impression mining’, ‘usage mining’ and in later stages ‘governance mining’.
Scheduled for Q2 2022, specifics of the community incentives will be co-designed together with the community through Snapshot.org voting. A minimum lock-up period of 4 months applies for this allocation. The core team suggests that after that period, the incentives should be distributed more or less linearly for a period up to 5 years to align token distribution with the long term roadmap (see below).
Community Treasury 20% 🏦
Strategic reserve for the project. Used for strategic provision of liquidity and protocol growth initiatives, and partnerships with other protocols, for example through token swaps. Potentially can be replenished with protocol fees. Specifics of usage of the treasury will be co-designed together with the community through Snapshot.org voting.
A minimum lock-up period of 4 months applies for this allocation. The core team suggests that after that period, the incentives should be distributed more or less linearly for a period up to 5 years to align token distribution with the long term roadmap (see at bottom of article).
[UPDATE 04/12/2021] For clarity; there is a notable exception to the treasury lockup and that is for establishing the 80/20 Balancer Pool right after launch in the week starting 6th of December 2021, like described in the launch mechanics. Depending on the end state of the launch, this might be a significant percentage of the treasury using 10% or more of the total token supply.
Team 17.5% 🧑🤝🧑
Allocation reserved for current and future core team members. To align incentives of team members with the growth of the protocol a lock-up, or vesting if you will, of this allocation for 24 months is applied. This is designed to show the teams commitment to the project, we’re in for the long haul.
Any token movements are always visible on-chain so there is a high level of accountability present in this setup.
Onboarding 2.5% 🛹
Small allocation available for promotional goals to early stage THX Network users such as creators. The goal of this is to give large Asset Pool owners in the THX Network (such as creators) a stake in the protocol. The community will be consulted on specific distributions of this allocation through Snapshot.org voting. This allocation is important for early stage traction of the protocol, so it is subject to just one month of lock-up.
Investors 15% (private sale) 🤑
In order to provide early stage funding for the project a maximum of 15% of the token supply is reserved for investors. This is offered in over the counter private sales using a so called Simple Agreement for Future Tokens (SAFT) agreement. For maximum transparency all private sales will be disclosed in quarterly reports. Any token movements are always visible on-chain so there is a high level of accountability present in this setup. The minimum lock-up of this allocation is 12 months.
Multi-signature setup for increased security 🔐
The token allocations are held by a Gnosis Safe, which sets the industry-wide, highest security standards. Gnosis Safe provides a formally verified self custody environment. Over $86 billion worth of assets are securely stored using Gnosis’ Safe systems.
THX Network’s multi-signature (2 out of 3) wallet is controlled by;
- independent engineer and entrepreneur Evert Kors (Sherlock protocol)
- THX Network cofounder Peter Polman
- THX Network cofounder Mieszko Czyzyk
Before the token launch on the 22nd of Nov. this will be made a 3 out 4 configuration by adding;
- independent CTO, Bram Rongen (former 3D Hubs)
This setup ensures that no single person or organization controls the token supply, increasing both security and transparency. In practice, three out of four signatures are required for moving any token allocation. As the THX Network grows and we move towards decentralization (see roadmap below), we will be actively adding multisig holders in order to further involve token holders and our community.
Roadmap 🗺️🛣️
It’s important to be clear that this potential fee collection can only be activated by token holders, upon vote, which in turn requires active on-chain governance. The road to get there, and eventually decentralize the protocol, will take some time.
Our belief is that we can get to decentralization somewhere in the next 2–3 years, which is about 4 years from when the project started back at the beginning of 2020. We’d love for you to join the ride and to see each other there 💛
About THX Network
When receiving something nice, the logical reply is “thanks”! That’s why we created the THX Network, a blockchain-powered protocol that allows you to create and embed your own tokens in any app or website, without breaking your brain or bank.
Use cases include loyalty programs, the offering of collectibles by creators, cashbacks, and engagement incentives.
The United Nations Development Programme (UNDP) uses THX Network to reward engagement on their employee and policymaker platform called SparkBlue. Over 70.000 transactions and counting have been performed on behalf of UNDP users using THX Network’s infrastructure!
Sign-up to stay updated 📬
As a token of appreciation for those who wish to be updated, we’re giving a 1000 $THX incentive to sign up to our email list *and* participating for a minimum of 75 USDC in the token launch. After leaving your email address on our website you’ll receive a link to a form in which you can submit the Ethereum/Polygon address.
Let’s meet in our communities
Discord 👾
X 🦤
Telegram ✈️
YouTube 📺
Get the $THX token
Balancer (Polygon) ⚖️
1Inch (Polygon) 🐉
Other resources
Developer and campaign manager docs 📋
Code on Github 🛠️
Audit report 🕵️
