The unveiled Idle’s Governance model is designed to embrace an impartial and trust-minimized way to supervise and operate the protocol. After releasing the initial model, we proudly saw our community letting us hear its voice, with feedback, suggestions, and constructive discussions.
Thanks to this vibrant participation, we decided to iterate on the model.
Community feedback incentivized us to fine-tune the distribution plan. We rolled up our sleeves and, with our partners and collaborators, we designed a token economy that aims to align the interests of passive users, active contributors, and the core team.
We are proud to introduce the outcome of this iteration, Idle’s new distribution plan.
New $IDLE Allocation
13,000,000 IDLEwill be distributed after the Token Generation Event and will become available over the course of the next 3 years. The allocation is as follows:
Public Rewards (60% of total token supply) with 2 years distribution
- LPs Fund (41%)
- Early LPs Fund (4%)
- Ecosystem Fund (15%)
Team&Investors (40% of total token supply) with 2–3 years distribution
- Current & Future Team (22.7%)
- Investors (17.3%)
LPs Fund — Power to the Users
Liquidity providers that will join one of the pools in Idle (DAI, USDC, USDT, TUSD, SUSD, WBTC) will receive IDLE tokens that are not subject to vesting or lock-up.
Both Best-Yield and Risk-Adjusted strategies are included in this distribution.
This allocation will be distributed through 2 main sub-programs, already hardcoded since the launch:
- Liquidity Bootstrap Program [
390,000 IDLE]: it will be live after the launch and will last only 30 days. It will roughly distribute 2 IDLE per block. It has been designed to incentivize liquidity provision in the early stage of the Governance launch and foster additional Idle ecosystem growth.
- Liquidity Mining [
2,340,000 IDLE]: this program will start right after the Liquidity Bootstrap Program. LPs will receive these tokens in proportion to their provided liquidity over the course of the next 24 months. 0.5 IDLE per block will be linearly distributed during the aforementioned period.
Long-Term LPs Program — Give Liquidity A Price Tag
To this date, early liquidity providers have been incentivized through liquidity mining distribution programs, but are not receiving enough incentives to stick with the protocol in the long run.
We believe early liquidity providers that pursue an enduring commitment should be incentivized by providing them an increasing bonus during token mining.
LPs would earn extra-rewards in proportion to how long they have been in that pool. This can be valid for each Idle Pool Token (IdleDAI, IdleUSDC, IdleWBTC, …) on both allocation strategies.
2,600,000 IDLE will be stored in a dedicated smart contract, owned by the Governance, for the Long-Term LPs Program.
Few protocols already integrated this novel approach in the DeFi space; a first attempt with this approach has been made by Ampleforth in April 2020. We now want to start a discussion with our community to implement and potentially improve this model.
The purpose of the program is designed to solve the mispricing between long-term liquidity and short-term liquidity. It will not be live at the Governance launch and the community can drag the idea from fine-tuning to protocol implementation.
Generally, each sub-program targets all current pools and distributes the tokens in proportion to how each Idle pool contributes to the TVL.
Early LPs Fund — Highlander Program
520,000 IDLE has been allocated to those valuable members as a recognition of our early users’ support, since Idle inception.
Ecosystem Fund — The Key to Governance Growth
The Ecosystem Fund is a community-managed treasury to fund initiatives that can improve the protocol or its ecosystem.
Those funds can foster a variety of experiments, including ecosystem grants, tailored staking systems, integrators programs, insurance mining, community-driven features, and public goods funding.
Stakeholders can vote to launch other incentivization programs, such as new bootstrap plans to reward users that join Idle later or to pay developers that implement community proposals. Part of the money can be used as an insurance fund to cover hacks and losses.
Even audit and legal activities can be eligible for grants. These types of initiatives would contribute to maintaining the highest security and compliance standards.
Governance Treasury — The Source of Governance Growth
Cash flows generated by the protocol via the performance fee (set at 10% of the accrued yield by default, but that may be changed by community proposals) flows into a dedicated smart contract, called FeeTreasury, owned by the Governance.
Governance is eligible to decide on the use of those funds via community proposals.
Wrap Up and Next Steps
Here’s a recap of our latest activities:
- Idle released the blog post about the new Early LPs program;
- The team secured $ 1.2M from industry leaders to scale its Yield Optimization Protocol.
Stay in the loop
We’re building Idle for the Ethereum ecosystem and its great community. We’d love for you to be part of our development process.
Here you can find our documentation: developers.idle.finance