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 starting supply
- Liquidity Fundraiser (Seed and IBO) (28%)
- Team | Advisors (21%)
- Partner Program (2%)
- Elastic Finance DAO Treasury (26%)
- Liquidity
- 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.
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 |
| Round 2 (IBO) - Strategic Supporters | 12,777 | ~7.5% | 5 month Cliff (Lock Up), 3 month linear vesting |
| IBO Round 3 - Community Supporters | 25,000 | ~15% | No cliffs or vesting (100% available at launch) |
| Founders | Team | 36,000 | ~21% | 1 year cliff, 10 month linear vesting; 10% of allocation available immediately |
| Treasury | 44,000 | ~26% | 20% will be available immediately for liquidity with $OHM/rest will vest immediately after IBO for 3 months |
| Partners/Advisors | 2,500 | ~1.5% | 1 year cliff, 2 years linear vesting |
| OG Contributors (Holders of EEFI v1) | Amount: TBD | %: TBD | 2.5 Year cliff, 2 years linear vesting (note that the amount allocated to OG contributors is TBD and not guaranteed) |
Use of Funds
With our liquidity and treasury bootstrapping efforts, we have the potential to raise a total of $1 million in funding. 90% of funds will be allocated toward the acquisition of permanent assets that wll fuel the protocol's growth. Specifically:
- AMPL will be deposited into the Elastic Vault
- OHM will be acquired and utilized for EEFI/OHM liquidity and other key purposes.
- A percentage of strategic assets (USDC, ETH) will be used to support protocol operations and development
Having robust liquidity and AMPL in the Elastic Vault will drive automated protocol market activities (including buying and burning of EEFI during positive AMPL rebase periods).
IBO (Initial Bond Offering)
Via Elastic Protocol-launched efforts and also in partnership with Bond Protocol | Fjord Foundry we will be conducting a series of seed and IBO events (Initial Bonding Offerings) where individuals can help bootstrap liquidity for our flagship strategies and the protocol’s native yield token EEFI. Individuals will be able to provide stablecoins, ETH, and OHM to the treasury in exchange for discounted EEFI.
The IBO bootstrapping event will:
- 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 on Uniswap
- Will 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
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
We anticipate that approximately 35,000 EEFI will be in circulation during the first year post-launch (depending on market dynamics (AMPL rebase cycles), and how Round 3 IBO 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.