The news is out that we are launching our presale on Fjord Foundry, January 13th.
We want to take a moment to discuss the tokenomic design of the protocol, and how it interacts with our launch plans and our roadmap.
There will be 88,888,888 tokens created upon TGE. The distribution of these tokens is given below. Numbers sum to 1 (i.e. 100%)
In case you didn’t know, PlanckCatDAO is the community that governs and controls Overlay. We will have more announcements very soon about how the DAO is growing and developing.
TUNA was our testnet trading competition that ran on Arbitrum, Berachain, and Movement. It saw close to 100k unique participating wallets and burned over 25% of the entire currency supply.
The tokenomics are easier to understand by considering a high-level view, separating the constituents into four blocks only. In order of allocation size: Community, Founders & Funders, Foundation, Services.
From a high level, you can see Overlay’s commitment to decentralization and the community. Control of the project will ultimately be in the hands of the people.
This commitment can be seen more clearly by looking at the vesting schedules for the various groups. Any insiders into the protocol have no unlocks until 12 months into the project launch. This gives the community the chance to participate in price discovery without being dumped on.
Looking at this, it separates out our roadmap into four major phases. We’ll focus on the first three since Phase 4 is so far away.
Phase 1 happens between TGE and six months post TGE.
Phase 2 happens between 6 and 12 months post TGE.
Phase 3 happens between 12 and 24 months post TGE.
Zooming in to Phase 1 of the protocol shows how marginal any external sell pressure is.
Every single bar except the top hot pink one represents community tokens. The community owns 98% of liquidity at TGE. The team and investors are nowhere to be seen.
The reason we did this is that Overlay is not like any other protocol out there. Trust in the token is critical to success, because the OVL token also serves as collateral on the protocol. Users need to be able to use it without fear of insider dumps.
The first three months post of Overlay launch will be about proving stability and usability, and setting the stage for Phase 2, which is all about growth and traction.
Because of the significant token unlocks happening in Phase 3, Overlay needs to have significant liquidity by this time. This is the end goal for the first 12 months of the protocol. Phases 1 and 2 are both aiming towards assuring that Phase 3 can start and that the OVL token can absorb the significant unlocks.
Here is a graphic summarizing the three main phases:
Overall, we think this design balances the interests of all parties, with an emphasis on protocol health and sustainability. Overlay is, in the words of one recent interested investor “an outstanding project” and this does not happen by accident. It is the result of care and deliberation, over time.
We have put the same care into everything from the beginning, including the whitepaper and protocol design. In the early days, one of our auditors said this:
We have tried to apply the same level of care to the tokenomics as well. If you see any gaps we’ve missed, or can identify a pitfall, we’d love to hear from you. Please reach out below.
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