Prior to listing we wanted to give a transparent update to the Token economics and Foundation held tokens. Transparency is a core value of the SKALE Community!
Keeping in line with that value, here is a community update on SKALE’s Foundation Treasury, ecosystem and protocol funds. We have also outlined future programs for use of these funds.
In the past we have written about this breakdown in the whitepaper and other economics community updates. As a reminder:
- The Foundation Treasury has been allocated 700,000,000 SKL Tokens.
- The Protocol Development Fund was allocated 310,421,049 SKL Tokens.
- The Ecosystem Fund was allocated 315,421,049 SKL Tokens .
The Foundation Treasury funds have not been spent or allocated as of this time. 150,000,000 were initially minted. Based on a milestone achievement of having 50 Active Nodes running in a decentralized fashion, the remaining 550,000,000 will be minted in the 6th month following the Phase 1 Network launch, which took place on June 30, 2020. Upon this milestone the minting function, which requires an elaborate multisig effort from 5 different entities, will be deprecated. These 550,000,000 tokens will be locked and held in qualified custody and will follow a 7 year vesting period with 6 month vesting intervals following the Mainnet Phase 2 Launch which commenced on October, 31 2020.
Protocol Development Fund:
The Protocol Development Fund has allocated only 4,480,000 of the 310,421,049 Tokens. The remainder will be used slowly over time to stimulate development and growth of the protocol with an emphasis on dApp Developer growth and open source contribution.
The Ecosystem Fund has allocated 124,390,956 of the 315,421,049 tokens. The majority of the allocated tokens are held in a locked state with vesting periods. These vesting periods help incentivize partners such as validators and other critical ecosystem contributors. None of the tokens in this pool were allocated to investors. These tokens have been solely allocated to serve their purpose to pay for services for the network/protocol and incentivize different parts of the community. Validator incentives, dApp developer SKALE Chain grants, payments for public launches, listings, hiring contractors and vendors, and other required business functions to grow the community make up the use of this pool.
Next steps for use of Funds.
Supporting the network for long term growth and health is incredibly important, so I’m outlining some of the programs the Foundation will be implementing over the next several months.
Having a vibrant and engaged community means recruiting people beyond the core team to help spread awareness. We’re working on an ambassador program that will recruit knowledgeable crypto and blockchain community leaders who understand and are excited about SKALE. They’ll be responsible for education and spreading awareness of the SKALE network by organizing community activities, knowledge sharing sessions and contributing content. They will be global in nature so they’ll also help translate content and build local communities. As a thank you, the N.O.D.E. Foundation will reward Ambassadors for helping to shape and grow a vibrant ecosystem of people. Please stay tuned for details on this program later in the week! And please apply if you would like to actively participate in SKALE!
Developer Grants, Bounties and Hackathon Awards
Kickstarting a network is an enormous task and incentivizing the community to help us with this effort is going to be really important. We’re working with dapp developers in our SKALE innovator program to offer them token grants to help get their dapps live and subsidize costs for SKALE chains. By making them successful, we fuel use and ultimately strengthen the network. There will also be protocol bounties to incentivize people to help with core infrastructure and design, in addition to hackathon awards to generate more interest in designing dapps for and integrating them with the SKALE network.
Future Incentivized Testnet Awards
Testing the network will be an ongoing process as we add new features and fix and upgrade existing ones. We run testnets for a variety of reasons from operational testing to identifying security issues before new code runs live. In order to get validators to run these in a real-world environment we need to provide incentives for their time and the use of equipment they would normally use to generate revenues.
Token Liquidity Support and Decentralized Finance Kick-start
SKALE is all about supporting decentralization. The Foundation will loan tokens to two separate partners to kickstart the Uniswap pool. In addition, these qualified market participants will support healthy market dynamics on various exchange platforms globally. The health of exchanges is critical to network health as dApp developers buy SKALE Chains with SKL tokens and Validators earn SKL tokens by running nodes. Delegators stake SKL tokens in the network, putting them at risk in return for more SKL tokens. We believe that healthy and efficient platforms for exchange are crucial to the development of the SKALE Network, and also supports Decentralized Finance, which is core to the goals and values of the SKALE Network. Two allocations will be loaned to these partners for a limited period so they can perform their work supporting the token and ultimately the network health and utility of the token.
Developer and Validator Procurement
We need to get tokens in the hands of devs and validators. Making it easy for developers to purchase SKALE Chains and making it easy for validators to self delegate is critical. Blockchain devs and validators will run and drive network usage, which is what will drive success.
To support his effort, the NODE Anstalt is helping get tokens in the hands of dApp devs, validator operators, and critical ecosystem partners that work in the network by letting them purchase tokens. Any tokens sold will be locked for a 3 month period and have a Proof-of-Use mandate so that they are actually used for their core purpose and do not end up as liquidity on exchanges. The sale of these tokens will always be at the public market price to ensure price integrity which supports network health. This means if tokens were sold today they would be sold at the public sale price of $.03 with a 3 month lock up. If sold after listing, they will be sold at a market rate. These sales will be strictly limited to dapp developers who are already in the SKALE innovator program, validators who were part of the Alpine team, and ecosystem partners who work directly with the protocol. Additionally, these tokens are already liquid in the Protocol Development fund so they will have no impact on circulating supply metrics or total supply metrics.
To reiterate, this is not a private sale to investors and there will be no Professional Investment of VC firms included in this sale. It is the sale of software to users, which is imperative to overall network success. Pure and simple, the goal of selling these tokens is network growth and viability without disrupting any circulating supply metrics.
Community Stakeholder Reward and Education Incentive Programs
We’re always looking to find new ways to get tokens into the hands of the SKALE community. We’re beginning to work with several providers who run education and awareness platforms, while also looking at other novel approaches. Look for updates on community stakeholder rewards prior to the end of the year.
Thanks again for all of your support. Let’s make 2021 a big year for the SKALE Community!