Across Token Launch Proposal v2

This is a revised proposal that builds on the initial Across token launch proposal with added community feedback and implementation details.

The launch of an Across token will grow and unite the Across community, incentivize liquidity providers, increase awareness of Across, and further the mission of being the fastest and cheapest L2 bridge. This proposal outlines a token launch plan and can be largely divided into two parts:

  1. Initial Distribution - a diversified airdrop and a treasury token swap

  2. Reward Locking Incentive Program - a novel rewards program to incentivize actions that support the Across protocol

Part 1 - Initial Distribution

1,000,000,000 Across tokens ($ACX) will be minted. 700,000,000 $ACX will remain in the Across Dao Treasury and a portion will be reserved for incentive rewards. 300,000,000 $ACX will be the initial supply and distributed in the following way:

$ACX Airdrop - 100,000,000 $ACX in total will be rewarded to the following groups:

  1. 10%: Across community Discord members with “Co-founder” or “Early Recruit”
  2. 10%: Across community Discord members with “DAO Contributor” or “Senior DAO Contributor”
  3. 20%: Tokens will be reserved as an additional bonus for significant early contributors to the Across community which may include DAO contributors, Senior DAO contributors and the Developer Support Team. After token launch, the community will have the opportunity to submit proposals as to how this should be allocated and $ACX holders will vote via snapshot.
  4. 10%: Early Across protocol users who bridged assets before March 11, 2022. These tokens will be allocated to wallets pro-rata by the volume of transfer completed. The numbers will be adjusted to filter out small transfers that are likely from airdrop farmers.
  5. 50%: Liquidity providers who pool ETH, USDC, WBTC, and DAI into the Across protocol before the token launch. The amount of rewards to LPs are pro-rated by size and a fixed amount of tokens will be emitted at each block since the inception of the protocol.

*Weights and exact details are all subject to change and dependent on the data collected ahead of token launch.

Token Swap for $UMA - 100,000,000 $ACX will be swapped with the Risk Labs Treasury for $5,000,000 worth of $UMA. This achieves two goals - it gives the Across community ownership and governance power in UMA which is critical to the security of the bridge, and it also provides voting rewards as a source of income to the Across DAO treasury. Risk Labs launched Across and will continue to support the protocol and community for the foreseeable future. Providing $ACX to Risk Labs will further incentivize the Risk Labs team. Risk Labs may consider using these tokens to build and expand a dedicated development team, to help provide liquidity in $ACX, and participate in governance. Regardless of use, these tokens will only be used to the benefit of the protocol.

Strategic Partners and Relayer Capital - 100,000,000 $ACX will be transferred to Risk Labs Treasury to raise funds and secure loans from key players in the DeFi industry. Competitors in the bridge space are partnering with large institutions and obtaining substantial resources to propel their growth. Risk Labs can use these tokens to help Across protocol do the same. A key resource constraint is the relayer network where a significant amount of capital is provided by Risk Labs’ treasury. Partnering with large and well capitalized crypto players can help alleviate this bottleneck and accelerate growth. To achieve this goal, Risk Labs may use these $ACX tokens for a success token fund raise, for collateral when borrowing via range tokens, and for rewards to facilitate the decentralization of the relayer network.

Part 2 - Across Reward Locking Incentive Program

A significant portion of the 700,000,000 $ACX in reserve will be emitted through this incentive program and community members can earn $ACX by doing any of the following actions:

  1. Stake Across LP shares from bridge pools - WETH and USDC pools will be the first Across pools to be incentivized
  2. Stake $ACX LP shares from a designated $ACX/ETH pool
  3. Refer users through the Across Referral Program

Liquidity Providers - Reward locking is an enhanced version of traditional liquidity mining that discourages farm and dump activity while rewarding loyal contributors to the protocol. Liquidity providers (LPs) have an individualized rate at which they earn rewards. The longer a LP keeps accumulated rewards unclaimed (and unsold) the faster the LP earns additional rewards.

Each incentivized liquidity pool will have a base rate of emission and each LP will have a unique multiplier for each of these pools. The LP will earn a pro-rata share of the base rate emission multiplied by the LP’s unique multiplier. A LP’s multiplier starts at 1 on day zero and can grow linearly to a maximum of 3 when rewards are left unclaimed for 100 days. The table below illustrates this simple progression. As an example, a LP that has held rewards unclaimed for 60 days will have a 2.2 multiplier. Once a LP claims ANY rewards the multiplier immediately resets to 1 and the LP would need to earn that multiplier again.

Days Held Multiplier
0 1.0
25 1.5
50 2.0
75 2.5
100 3.0

The initial reward locking program will be expected to operate for 6 months and will be reviewed at that point in time for any changes. The program will start with the following base emission rate:

~100,000 $ACX per day for Across ETH LP shares
~100,000 $ACX per day for Across USDC LP shares
~20,000 $ACX per day for designated $ACX/$ETH LP shares

This equates to roughly 4MM to 10MM $ACX depending on the behavior of LPs. $ACX holders can propose and vote to add new assets or change these parameters at any time.

Across Referral Program - The referral program will convert the Across community into a sales force. To participate in the referral program, Across supporters can enter their wallet address to generate a unique referral link. A user who clicks that link and completes a bridge transfer on Across will attribute $ACX rewards to the referrer. Supporters are encouraged to share their link with friends and promote Across on social media, such as Twitter. This can also be used in integrations with other projects. A bridge aggregator or a DEX can create a referral link to connect Across to their dApp. Once that link is clicked and a bridge transfer is completed, rewards will be allocated to that project. All future transfers completed by that wallet will continue to attribute rewards to the referrer unless the user of the wallet clicks a different referral link or the referrer claims their rewards.

Similar to reward locking for LPs, referrers can increase the rate they earn referral fees by keeping their rewards unclaimed and reaching a specific number of referrals or securing an amount of volume. The referral fee is a percentage of the bridge LP fee awarded to the referrers in $ACX. If rewards are not claimed and a certain number of referrals or volume is done then the referral fee goes up. There are five tiers of referrers:

  1. Copper: 40% referral fee.
  2. Bronze: 50% referral fee. Copper referrers progress to Bronze after 3 referrals or > $50k in bridge volume
  3. Silver: 60% referral fee. Bronze referrers progress to Silver after 5 referrals or > $100k in bridge volume
  4. Gold: 70% referral fee. Silver referrers progress to Gold after 10 referrals or > $250k in bridge volume.
  5. Platinum: 80% referral fee. Gold referrers progress to Platinum after 20 referrals or > $500k in bridge volume.

Referral rewards are attributed weekly and referrers can only increase a tier per week. Once a referrer claims rewards, the referrer’s tier immediately resets back to Copper and all referral links are broken. This means referrers will need to get users to click on their referral link again to continue earning referral fees, and the referrers will need to regain their tier which will take a minimum of 5 weeks to reach Platinum.

Reward Locking = Gamification of DeFi

The benefits of Reward Locking are clear. Keeping rewards locked discourages farm and dump activity, but more importantly it makes the LP and referrer more engaged with the protocol. If you are encouraged to have a stake in the protocol you will naturally want to know more about it and you are incentivized to join the community and further its mission.

Given the various unique multipliers you can earn for each liquidity pool and the different tiers you can acquire as a referrer, each wallet that contributes to the protocol will develop a personalized identity. Similar to a character in a role playing game, the various stats can be translated into experience points that could allow the wallet to level up and obtain status in the protocol.

Reward locking can be gamified further with a well thought out user interface and user experience to make it appear like an actual game. It can be built similar to a RPG where users can earn special NFTs or items for reaching certain milestones. Community members could build this and/or an actual game that uses these stats and do battles with one another. As well, a leader board can recognize the accomplishments of all committed Across users. This would all work to make the user very reluctant to claim their rewards and fall in status.

Staked $ACX - As the protocol matures, the community can consider a staking mechanism for $ACX which could grant further governance rights and also share in Across protocol revenue. Governance can dictate where incentive rewards will be directed in order to determine which tokens and which L2 should get more liquidity. This vote lock like mechanism can add further value to $ACX and the Across protocol.

Conclusion

In addition to building community and incentivizing project goals, the Across token launch aims to create value and meaning to owning $ACX. The objective is to have $ACX token holders interact with the protocol through their token as soon as it is launched. In fact, by outlining what actions will be rewarded ahead of the airdrop, the protocol is encouraging Across LP activity now. The Across Reward Locking Incentive Program will engage community members and use $ACX as a currency to gamify and incentivize contributions to the protocol. The $ACX token will represent real ownership of the Across protocol in terms of economics and governance.

Feedback on this proposal is very much welcome. Mechanics and numbers can and should all be discussed so that the community is comfortable ahead of this token launch.

34 Likes

Proposal seems fair and rewarding to community builders and aims to bring more users to the protocol after the token launch. Support it.

4 Likes

In general, I think the proposal is great.

Except the part about the airdrop.

Why limit it to users who bridged assets before March 11, 2022? And why do it pro-rata? (I understand: To avoid/prevent airdrop hunters. But I think this is a mistake)

It will cut out a quite lot of people who have smaller budgets. They would be thrilled to get an airdrop and talk positive about Across.

One of the main goal - if not the most important goal- of an airdrop is: Bring awareness to the protocol. We won’t get much awareness to the protocol by doing it like that.

We can learn something from the Optimism airdrop. Especially:

  1. Push the snapshot date to a date which is further in the future (Suggestion: Remove this part from the proposal at all where we talk about the snapshot date and take a snapshot at the end of May 2022)
  2. Plan in a 2nd and possibly 3rd airdrop (1st = 50,000,000 $ACX, 2nd = 25,000,000 $ACX and 3rd = 25,000,000 $ACX)

I suggest we do that.

16 Likes

Thanks for your work Kevin. I have two questions:

  • I understand the interest of incentivizing ETH, USDC, WBTC and DAI LPs, but are there plans to do the same with other LPs? This would increase the TVL. Badger, for example, has a higher pool utilization than ETH (30% vs. 24.8%).

  • Is there an anti-sybil mechanism to prevent playing the referral program or could someone use their referral link with multiple wallets to increase levels?

2 Likes

This new proposal looks great. There had been a significant amount of thought and discussion regarding incorporating an s-curve into the distribution of the LP rewards. Is that still being considered? The quote below makes it look like we are going straight by volume. That’s fine, but it would be helpful to explicitly state that since there has been a fair amount of discussion around that.

“The amount of rewards to LPs are pro-rated by size and a fixed amount of tokens will be emitted at each block since the inception of the protocol.”

4 Likes

There should be an option for users to add FURTHER non ACX tokens to their emissions and either increase their multiplier or not loose existing multiplier.

Achieves 2 things:
1- Incentivises deposits of additional “useful” capital
2- Reduces ACX dumping .

3 Likes

Would be interesting to know thoughts behind reduced incentives for the ACX/ETH pairing.
I would have thought that might need additional incentives? Asking for learning as I know you have a large amount of experience…

1 Like

Is there a “self referrer” option? - A user might not feel too confident promoting across, that might not be their thing, but if they have incentive to come back and keep “levelling up” - they will want to. Kind of like a cashback credit card…

My understanding is that there aren’t any mechanisms in place to prevent this type of action. However, the user would need to actually complete a transfer to gain the referral. There may be a weakness in this (hopefully Kevin can share more), but it seems like a net positive for Across to have more volume and a net negative to a user to break up their funds to transfer them.

4 Likes

@Kevin_UMA flagging you on this one

1 Like

10%: Early Across protocol users who bridged assets before March 11, 2022. These tokens will be allocated to wallets pro-rata by the volume of transfer completed. The numbers will be adjusted to filter out small transfers that are likely from airdrop farmers.

10% is already a small portion of the airdrop. I don’t think it’s a good idea to distribute airdrop according to volume. It will bring too many negative comments in social media. If we want to reward whales/big investors, we should come up with a new category that seperates them small investors.

9 Likes

In regards to having multiple airdrop:

(timestamp 15:20)

1 Like
  • What about the LPers who provide LP with $UMA?

Really nice looking proposal - I Lp’ed early because I believe in L2’s. I think early liquidity providers are a fundamental part of why Across is where it is, and the majority of that liquidity is not mercenary or looking to make a quick buck by dumping gov tokens.

1 Like

I agree with you. It can be given to anyone who has used the bridge to raise awareness. Other than that, the proposal is pretty fair.

I agree with you.Really nice looking proposal

In general, I think the proposal is great.

I agree with you on this

  • Another reason why I think we need to delay the snapshot to date in the future: The Arbitrum Odyssey is coming up. Regardless of whether we (Across) are chosen for the Odyssey or not. There will be a lot of bridging going on. I think it would be a big mistake to announce to the world “IF you wanna bridge with us. You can do it. But the snapshot has already being taken. So you won’t get an airdrop”. We need to involve those people. Otherwise Across will stand no chance against other bridges
4 Likes

This seems to cover all the bases. Is there a way we could acquire some protocol owned liquidity or have Risk Labs provide some liquidity for ACX/ETH, ACX/USDC, and ACX/UMA pairs. Perhaps with the strategic capital raise.

1 Like