Author : Lavi
Section/Question : Section 2 - Tokenomics / Questions 2.a) & 2.c)
Date : March 23, 2022
Link to discussion : Link
Status : Draft
Question 2.a) and 2.c) are currently not phrased very clearly. We see often times raters mix up initial token allocation and ongoing distribution mechanisms. By rephrasing the questions more accurately, we aim to make it easier to answer them.
With this TIP, we propose to change the title, the wording of the question, as well as the scoring table for both questions 2.a) and 2.c). Further, we propose to swap the order, so that question 2.b) is put first, in the tokenomics section.
Status Quo: This is the current phrasing of Q 2.a)
The token distribution can be an indicator of a healthy protocol. When the protocol tokens are widely distributed among different stakeholder groups and contributors, this genuinely improves the coordinating capability of the token and strengthens the resiliency of the protocol. Was the initial distribution balanced between relevant stakeholders? Are the tokens distributed over sufficient participants (10, 25, 100 largest addresses)?
|12-15||The token distribution effectively aligns stakeholders for the betterment of the protocol|
|8-11||The token distribution represents the actual stakeholders of the protocol|
|4-7||The token distribution is unjustifiably skewed towards specific stakeholders|
|0-3||The token distribution is heavily skewed towards a small number of stakeholders|
Status Quo: This is the current phrasing of Q 2.c)
To what extent does the issuance of the token support the advancement and function of the protocol? Are the tokens justifiably being issued? Does the issuance model incentivize the right behaviour? Are all relevant stakeholders benefiting from the issuance model?
|8-10||The issuance model of the token incentivizes the right behaviour and improves the protocol|
|5-7||The issuance model of the token has some incentives that improve the protocol|
|2-4||The issuance model has limited incentives in place that improve the protocol|
|0-1||The issuance model does not improve the coordination of the protocol|
With this TIP we propose to rephrase the two questions as follows (Remark: question 2.a) is now labelled at 2.b), as this change is also requested with this :
Token distribution can be an indicator of a healthy protocol and, if done well, can improve coordination and alignment among different stakeholders. Was the genesis/initial distribution fair and balanced? Are the tokens distributed widely or is the ownership concentrated and skewed toward early insiders? Are vesting schedules aligned with long-term vision?
|12-15||Token distribution effectively aligns stakeholders for the betterment of the protocol. Public allocation (e.g. community, public sale, ecosystem, LP rewards, etc.) is significant. Vesting schedules and lock-ups are fair and ensure long-term commitment from the team and investors (>3 yrs).|
|8-11||Token distribution is reasonable and does a decent job at aligning stakeholders for the betterment of the protocol. Vesting schedules and lock-ups are fair. Public allocation is in-line with industry standards and can be distributed over time to incentivise positive behaviours.|
|4-7||Token distribution is questionable. Initial allocation is skewed to early insiders (public/ecosystem allocation is <50%), and vesting schedules for the team and investors do not signal long-term focus.|
|0-3||Token distribution is heavily skewed towards early insiders, with aggressive vesting and short lock-ups (<1 yr).|
Most token distribution schedules have built-in inflation. This section evaluates the purpose of that continuous token distribution. Is it justifiable? Does it help improve the coordination and alignment of incentives for the protocol? Does it incentivise positive-sum behaviour? Are the benefits flowing to all relevant stakeholders or just select groups?
|8-10||The issuance model of the token incentivises positive-sum behaviour, improves coordination and benefits all relevant stakeholders.|
|5-7||The issuance model is reasonable, albeit not ideal, and benefits the protocol and stakeholder coordination|
|2-4||The issuance model has limited incentives in place that improve the protocol and disproportionately benefits select stakeholders.|
|0-1||The issuance model does not benefit the protocol or key stakeholders.|
FOR: Rephrase the questions as described above
AGAINST: Do not rephrase and keep status quo