π₯LON Tokenomics
Last updated
Last updated
Dear Tokenlon community,
We are thrilled to announce the launch of LON buyback, staking and trade mining! LON is the key to promoting the positive feedback loop of the Tokenlon ecosystem. Buyback, staking, and trade mining are integral for Tokenlon to move towards its vision of becoming a global exchange and payment infrastructure.
The launch time of LON staking, buyback, and trade mining is 8:00 (UTC) on April 1, 2021. The staking will be open to all users four hours in advance, but the staking reward will only take effect at the launch time.
We appreciate your patience in the past few months and your support for Tokenlon, which helped Tokenlon reach a historical milestone of over 10 billion U.S. dollars in trading volume and over 150,000 unique trading addresses. In the following, we will outline the tokenomics of Tokenlon and how everyone participates.
LON Buyback
The net fee charged by the Tokenlon protocol is used to buy back LON on the open market, and the LON bought-back is transferred to the treasury and staking reward pool. As Tokenlon adopts a design that the relayers can pay the Ethereum miner fee on behalf of the user to improve the user experience, part of the fees collected are transferred to the treasury first to reimburse the miner fee paid by relayers.
The fees captured by the Tokenlon 5.0 protocol and the Ethereum miner fees paid by the relayers can be viewed on this dashboard.
To make the LON buyback orderly and organic, and avoid direct impact on the market, the LON buyback is to be carried out in batches. There is an upper limit on the number of LON tokens that buy back at a time, and there are intervals between buybacks. The upper limit of a single buyback and the frequency of buyback is dynamically adjusted according to the current market liquidity. Also, the LON buyback is open to anyone. Anyone can trigger a buyback by calling the buyback contract. The entire process is open, transparent, and verifiable on the blockchain.
Core initial settings:
Anyone can trigger the buyback
100% of net fees are used for buyback
After the buyback, 60% of LON will enter the staking reward pool, and 40% of LON will enter the treasury
For reach token, the interval between each buyback is required to be 4 hours
You can initiate buyback and view data on this dashboard. Participants can view the tutorial here.
LON staking
The launch of LON staking will allow LON holders to enjoy more rights. In addition to obtaining fee discounts and participating in governance, by staking LON, LON holders can receive LON rewards based on the number of LON staked, therefore sharing Tokenlonβs growth. The staking reward comes from the LON bought-back on the open market by the protocol. For each buyback, the number of LON tokens allocated to the staking reward pool is determined by the following formula:
stakingRewardLON = buybackLON * stakingRewardFactor
LON to staking reward = LON bought-back * staking reward factor
Users who participate in the LON staking can obtain xLON tokens as a proof and a tool to capture staking rewards. The ratio of xLON that can be exchanged for LON will continue to rise as the distribution of staking rewards from the Tokenlon protocol increases. Also, xLON tokens can be transferred freely.
When LON stakers withdraw from the staking, they need to return xLON to the staking contract to redeem the staked LON and the LON rewards obtained during the period. It is worth noting that the user needs to apply for unlocking before exiting to trigger the unlock periodβs countdown, and the LON can be retrieved after the countdown ends. LON stakers who need to exit during the countdown period can do so but will have to pay a fine. The fine will remain in the staking pool as an additional reward for other stakers.
Core initial settings:
The staking reward factor is 0.6, therefore, 60% of the LON obtained through buyback will enter the staking reward pool
The unlock period for users to withdraw from the LON staking is 7 days, and the countdown will start after the application
During the unlock period, the initial penalty of the existing is 5%, and it linearly decreases to 0% with the countdown of the unlock period
You can start staking, redeem and view data on this dashboard. Participants can view the tutorial here.
LON Treasury
The treasury is a LON reserve governed by the community and is used to promote development of the Tokenlon ecosystem. The LON in the treasury comes from the LON bought-back on the open market. For each buyback, the number of LON allocated to the treasury is determined by the following formula.
treasuryLON = buybackLON * (1 - stakingRewardFactor)
LON to treasury = LON bought-back * (1 - staking reward factor)
Core initial settings:
The staking reward factor is 0.6, therefore, 40% of the LON obtained through buyback will enter the treasury
Per TIP10 governance voting results, 80% of the WETH captured by the protocol is directly transferred to the treasury to reimburse the miner fee paid by the relayers, and the remaining 20% ββWETH is used to buyback LON as staking reward
LON Trade Mining
Before LON reaches the token cap of 200 million, each buyback will trigger the LON minting. The number of LON tokens to be minted is determined by the following formula. The minted LON is used to reward the ecosystem participants through trade mining incentives.
issueLON = buybackLON * mineFactor
LON to mint = LON bought-back * mining factor
The community can participate in trade mining through the following 4 ways of contribution:
Trade: Trade on Tokenlon and generate a net contribution
Refer: Invite friends to trade on Tokenlon with the referral code and generate a net contribution
Provide liquidity: Support assets and market-making on Tokenlon protocol
Relay: Match orders for users of the Tokenlon protocol
For each trade on Tokenlon, all kinds of participants can automatically obtain power by making contributions. Each kind of participant will have its own independent reward pool, and each individual participant shares the reward according to their power at the time of settlement.
Core initial settings:
The mining factor is 1, therefore, an equal amount of LON bought-back is minted and transferred to the trading mining reward pool
The LON in the mining reward pool is allocated in the following proportions
Traders reward pool: 35%
Liquidity providers (market maker) reward pool: 25%
Relayers reward pool: 25%
Referrers reward pool: 15%
The mining settlement cycle is 4 weeks, therefore, participants will share the LON in the corresponding mining reward pool every 4 weeks
Trader A's LON reward = A's power share * total number of LONs in the traders reward pool
The rules for each participant to obtain power are as follows
If the trader does not use the referral code, then for each $1 net contribution
Trader gets 10 trading power
The liquidity provider (market maker) of this trade gets 10 liquidity power
The relayer of this trade gets 10 relay power
If the trader uses the referral code, then for each $1 net contribution
Trader gets 12 trading power
The liquidity provider (market maker) of this trade gets 10 liquidity power
The relayers of this trade gets 10 relay power
The user's referrer gets 10 referral power
For each $1 miner fee incurred, the trader gets additional 2 trader power
You can receive mining rewards and view data on this dashboard. Participants can view the tutorial here.
The settings of the buyback, staking, trade mining mechanisms can be adjusted through governance voting, and the core team will work with the community to best leverage the tokennomics through community governance. We look forward to your continued support in this new chapter of Tokenlon!
Tokenlon,
2021.04.01
Staking:
https://tokenlon.zendesk.com/hc/en-us/articles/360059287491
buyback:
https://tokenlon.zendesk.com/hc/en-us/articles/360059287571
Trade Mining:
