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DerivaDEX Token Economic Model Analysis

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Read the distribution and release of DDX tokens in one article.

Original Title: "A Brief Introduction to DDX Token Economic Model"

Original Source: DerivaDEX

DerivaDEX is a decentralized trading protocol for the next generation of derivative contracts. DerivaDEX uniquely combines the autonomy of a decentralized exchange protocol with the performance of a centralized exchange. This article introduces the token supply, distribution and economic model of DDX, the native token of the DerivaDEX protocol. The release and distribution of DDX has been carefully designed to provide participants in the DerivaDEX community with a sane and sustainable governance ecosystem.

This article describes the three components behind the DDX economic model: DDX genesis release, DDX liquidity mining release, and insurance fund (initially launched through a stablecoin staking program and governed by DDX holders).

DerivaDAO may change many aspects of DerivaDEX, including the DerivaDEX Insurance Fund growth and management. This flexible adjustment of system parameters ensures that the community can respond quickly to new opportunities and circumstances.

Removing our "governance cliff" and DerivaDEX mainnet launch Previously, all DDX would be non-transferable.

What is the governance cliff?

DerivaDEX adopts DAO governance from day one. This means that the support of all DDX holders is required to pass all updates and modifications to the system. In order for DerivaDAO to be launched as early as possible, we are working on our insurance mining plan and our genesis release. DDX obtained before the "governance cliff" is lifted will be used to participate in governance decisions, but not transferable. The lifting of the governance cliff will be one of the first decisions implemented by DerivaDAO and will lift all transferability restrictions. All DDX tokens are subject to this governance cliff.

This governance cliff ensures that the DerivaDEX community fully understands the governance mechanism, Sufficient discussions around initial governance topics and proposals, and ensuring DerivaDEX enters our mainnet period with the highest quality of governance participation.

DDX Release Release 100,000,000 DDX over 10 years. DDX has no plans for additional supply or inflation by design

Initial release of 50 million DDX as part of Genesis supply

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Over 10 years, release 50 million DDX as part of the liquidity mining supply.

Genesis supply distribution and release

Genesis 34,020,405 DDX in the supply were allocated to the team as well as the DAO Foundation. This includes current team members, future employees, and the DerivaDAO Foundation. This section will be used for the following purposes: community initiatives, business development and partnerships, marketing, possible future financing, and funding for the continued development of the DerivaDEX protocol. The part of the team members will be unlocked according to the industry standard time. Since the starting time of this part of the unlocking varies according to the time of joining the company, in the above figure it will be processed as all issued temporarily. In fact, the tokens of most team members have not yet been unlocked. .

15,719,595 DDX from the Genesis supply will be unlocked linearly for one year and allocated to investors.

The 260,000 DDX in the Genesis Supply is unlocked linearly over two years to advisors.

What is linear unlocking?

Investors will get 8.33% of their total quota immediately after the "governance cliff" according to the 1-year linear unlocking schedule, and then get another 8.33% every month until they get full amount.

Advisors follow a 2-year linear unlock schedule to get 4.17% of their total quota immediately after the "governance cliff", and another 4.17% every month until they get all amount.

Until the DDX governance cliff is reached, all tokens on a linear unlocking schedule are non-transferable.

Liquidity mining supply distribution and release

will be sent to the liquidity mining pool Release 50 million DDX.

As part of the insurance mining plan, the 2,500,000 DDX in the liquidity mining pool will be released linearly within one year (1.189117199391172 DDX per block, totaling 2,102,400 blocks).

47,500,000 DDX will be minted through a liquidity mining program that includes transaction mining over ten years.

These are the initial parameters. The velocity of the liquidity mining supply, the duration and selection of the liquidity mining program are all parameters that can be changed through DerivaDAO governance.

Insurance Fund

DerivaDAO does not only manage the supply of DDX tokens. DerivaDAO is also responsible for managing all parameters of the exchange: listing products, determining the capital amount of the insurance fund, setting transaction fees. A unique feature of DerivaDEX is that the trading protocol will establish and maintain a healthy insurance fund. Unlike centralized exchanges, this DAO-managed fund will have transparent parameters set through governance.

The size and implementation management of this fund is the responsibility of DerivaDAO participants. This resource will initially be initiated by an insurance mining program and then grow organically through transaction fees and liquidations. The types of collateral accepted by the insurance fund and the balance between the various collateral types are governed by DerivaDAO.