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:
Initial Distribution - a diversified airdrop and a treasury token swap
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:
- 10%: Across community Discord members with “Co-founder” or “Early Recruit”
- 10%: Across community Discord members with “DAO Contributor” or “Senior DAO Contributor”
- 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.
- 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.
- 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:
- Stake Across LP shares from bridge pools - WETH and USDC pools will be the first Across pools to be incentivized
- Stake $ACX LP shares from a designated $ACX/ETH pool
- 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.
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:
- Copper: 40% referral fee.
- Bronze: 50% referral fee. Copper referrers progress to Bronze after 3 referrals or > $50k in bridge volume
- Silver: 60% referral fee. Bronze referrers progress to Silver after 5 referrals or > $100k in bridge volume
- Gold: 70% referral fee. Silver referrers progress to Gold after 10 referrals or > $250k in bridge volume.
- 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.
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.