EEFI Tokenomics, Distribution and Liquidity Bootstrapping
As we now know, EEFI is the decentralized yield and rewards token of the protocol. It is a unique asset that produces amplified yield during market uptrends and protects from downside action during downtrends. It may also be the basis of a multichain effort as more strategies are added to the protocol. The basic breakdown of our tokenomics and the use of liquidity funding proceeds can be viewed below:
EEFI Tokenomics
170,000 estimated maximum supply.
- Liquidity Fundraiser (Seed and IBO) (~28%)
- Team | Advisors (21%)
- Partner Program (2%)
- Elastic Finance DAO Treasury (26%)
- Liquidity and Growth Asset Acqusition (Via Liquidity Boostrapping/Bonding Events)
- Development + Bounties
- Community Incentives Rewards + Referrals
- Marketing + Airdrops
- OG Community Contributors (%: TBD)
- This supply is locked for two years and vested for a minimum of two years after the Elastic Protocol launches.
Note: The full Treasury EEFI allocation was not pre-minted. Instead the protocol will mint smaller batches of EEFI on a regular basis to meet protocol needs such as liquiidty bootstrapping, community token distribution and other purposes.
Full Vesting Schedule
| Allocation | EEFI Amount | Supply % | Vesting Schedule |
|---|---|---|---|
| Round 1 (IBO) - Seed Supporters | 10,000 | ~6% | 9 month Cliff (Lock Up), 4 month linear vesting (starting at purchase date; linear vesting begins mid-April, 2024) |
| Round 2 (IBO) - Strategic Supporters | 12,777 | ~7.5% | 5 month Cliff (Lock Up), 3 month linear vesting (starting at purchase date; linear vesting begins early July 2024) |
| IBO Round 3 - Community Partners | 4700 | ~2.7% | 2 month Cliff (Lock Up) |
| Liquidity Bootstrapping Pool (LBP) - Community Supporters | 25,000 | ~15% | No cliffs or vesting (100% available at LBP conclusion); Portion of tokens allocated to LBP sourced from protocol Treasury |
| Founders | Team | 36,000 | ~21% | 1 year cliff, 10 month linear vesting; 10% of allocation available immediately (Team allocation was distributed and vesting began in late September 2023) |
| Treasury | 44,000 | ~26% | 20% will be available immediately for liquidity with $OHM after IBO concludes and for other purposes such as liquidity bootstrapping, bonding activities and strategic purposes. Important: The full Treasury EEFI allocation was not pre-minted. Instead, it will be minted over time to meet ongoing Treasury / protocol needs. |
| Partners/Advisors | 2,500 | ~1.5% | 1 year cliff, 2 years linear vesting |
| OG Contributors (Holders of EEFI v1) | Amount: TBD | %: TBD - Tokens have not been distributed | 2.5 Year cliff, 2 years linear vesting (note that the amount allocated to OG contributors is TBD and not guaranteed) |
Notes:
- Round 1 pre-sale participants contributing above $2,500 received 2.5% of pre-sale EEFI tokens purchased immediately, the remainder was vested.
- Round 2 pre-sale participants contributing above $1,500 received 5% of pre-sale EEFI tokens purchased immediately, the remainder was vested.
- Round 1 and 2 participants holding bonus pre-sale EEFI received an airdrop of market EEFI tokens (corresponding to the amount of bonus pre-sale tokens held in their wallets) on April 12, 2024.
Use of Funds
Funds raised during liquidity and treasury bootstrapping efforts were allocated to:
- Purchase of AMPL for deposit into the Elastic Vault
- EEFI / OHM, EEFI / WETH, EEFI / SPOT, EEFI / WAMPL liquiidty
- Aquisition of strategic growth assets (fee-generating assets)
- Protocol operations and development
IBO/LBP (Initial Bond Offering/Liquidity Bootstrapping Pools)
Via Elastic Protocol-launched efforts and also in partnership with Bond Protocol | Fjord Foundry the protocol has conducted liquidity bootstrapping/bonding events where individuals can help bootstrap liquidity for our flagship strategies and the protocol’s native yield token EEFI. Individuals have provided stablecoins and WETH, to the treasury in exchange for discounted EEFI.
These bootstrapping events:
- Enable the permanent deposit of AMPL into the protocol's core elastic vault. This will help to sustain the protocol and the strategy’s growth into more tokens (long-term)
- Bolster liquidity for EEFI/OHM and other pairs on Uniswap
- Help to initialize the hyper social coordination aspect for community engagement (E,E)
- Provide support for Elastic Finance DAO operations as the protocol moves on to full decentralization and a multi-chain reality.
Additional Tokenomics Considerations
Pre-sale EEFI Exchange: During Rounds 1 - 3, users were provided with a pre-sale version of the EEFI token. A new version of EEFI (market EEFI) was launched for the liquidity bootstrapping pool. Participants in Rounds 1 - 3 are able to exchange/recieve pre-sale EEFI for market EEFI via:
- Airdrop: Holders who received bonus pre-sale tokens during Rounds 1 - 2 received market EEFI
- Exchange: Round 1 - 2 individuals will be able to claim and mint market EEFI as their tokens are unlocked during the vesting period
- Manual Distribution: Community partners taking part in Round 3 will receive market EEFI via a manual token exchange
Regular Treasury EEFI Minting: The Treasury allocation of ~44,000 EEFI was not be minted immediately. Instead smaller EEFI mints occur regularly in order to meet protocol and Treasury needs. A sample Treasury mint transaction is here.
Limited EEFI Market Supply: The initial distribution of EEFI will be largely limited to:
- Tokens emitted by the core Elastic Vault during the first year
- Participants in Round 3 of the IBO, who will have immediate access to their tokens
- Individuals claiming vested EEFI
We anticipate that approximately 60,000 EEFI will be in circulation during the first year post-launch (depending on market dynamics (AMPL rebase cycles), and how pre-sale and liquidity bootstrapping pool participants utilize their AMPL (i.e., whether they decide to provide OHM/EEFI liquidity, etc.)).
The Importance of Protocol-Owned Liquidity: During the alpha testing phase of the core Elastic Vault, we recognized the importance of Protocol Owned Liquidity. Optimal vault operations require sufficient EEFI/OHM liquidity, which will be provided, in part, by the Elastic Protocol DAO (this is a primary reason we are engaging in liquidity bootstrapping efforts). This will ensure that vault users are confident in participating in automated protocol-driven operations, and will bolster the long-term health of the protocol.