L2 GOVERNANCE TOKEN
$L2 is the Gluon Network Governance token.
Gluon is a high speed Layer 2 solution designed to power fast transaction apps such as Decentralized Spot and Derivatives Trading.
LEV Token Migration to L2
EXECUTIVE SUMMARY / TLDR
- Clarity over tokenomics & supply — both now and estimated in 12 months.
- Announcement of key initiatives to bootstrap growth (liquidity rewards, ecosystem incentives).
- Progress towards further decentralization. Co-creating an environment for success.
While we were building out our core Gluon Layer 2 high-speed solution and the leverj.io platform which takes full advantage of Gluon’s functionality, we have observed significant changes in the crypto market. We always intended to update our tokenomics to sync with maturing macro-trends and have been discussing many innovative concepts with our community and partners. It’s become clear that burning supply has only limited and momentary benefits.
One of the many great articles covering the subject is this one from PlaceHolder VC, title “Stop burning tokens, Buy Back and make instead”
GOAL
Implement the best ideas that have longevity and create an environment which activates a wide range of market participants. Doing any one thing such as airdrops or yield farming has a shelf-life.
Our plan is to create a gravity well, which draws a wide array of interest and participation to ensure a bright future.
NEW TOKENOMICS
Tokenomics released October 2020
| Percent | # of LEV | Holder | ||
| Control of Keys with Leverj: | ||||
| 20.41% | 204,116,643 | Treasury – Staking | Not in circulation – Staking only. | |
| 21.33% | 213,250,000 | Team | Not in circulation – Staking only. | |
| 0.60% | 6,000,000 | Treasury – Opex | Not in circulation – Issued over time. | |
| 6.00% | 60,000,000 | Go To Market / Marketing | Not in circulation – Issued over time. | |
| 6.00% | 60,000,000 | Liquidity Rewards & Market Makers | 50m over 12 months (traders), 10m over 3 years (MM’s) | |
| 3.50% | 35,000,000 | Ecosystem Fund, Grants / Bounties, Validator Nodes, Insurance | Issued over time. Approval via DAO. | |
| 12.33% | 123,324,275 | Locked Treasury | Not in circulation for another 7 years. | |
| Free Float Circulating Supply: | ||||
| 29.83% | 298,309,082 | Public Wallets | Current circulating supply | |
| Total | 100.00% | 1,000,000,000 | ||
SO, LET’S BREAK THIS DOWN
Total vs Circulating supply.
Since the Token Generation Event in mid 2017, there have been 298.3M L2 tokens in free-float supply.
This represents 29.83% of total supply today.
We intend on increasing circulating supply from 29.83% to an estimated 41.23% by Oct 2021.
The reason for this increase is to activate all the exciting initiatives, including 50m tokens to reward traders on Leverj as incentive to move their trading over from other platforms.
LET’S BREAK THIS DOWN FURTHER BY INITIATIVE:
WHAT
Our core tokenomics is based on distributing maker/taker fees from Leverj to those staking L2 tokens, and this is not going to change. However, the mechanics to distribute the fees in ETH/DAI are being rebuilt to work natively as asset transfers on Gluon. Gasless transfers on the Gluon sidechain make it possible to distribute even small amounts to Stakers on an ongoing basis so you can watch the fee revenues accumulate.
WHY
Staking to receive a portion of the fee revenues is the most transparent and fair mechanism. Alternatives that buy-back and burn tokens are opaque and difficult to measure. We want users to see directly the portion of fees that they will receive through staking, especially those that are actively trading on Leverj and wish to stake L2 as a way to offset their own fees.
Our goal is to turn Gluon/Leverj into a DAO — the value created from activity such as trading fees and programmatic royalties of using Gluon to power third party Dapps, all goes to Staked token holders.
Fees distributed in ETH, DAI or USDT
Fast Gasless transfers on Gluon
WHAT – Two parts
- Takers/new users — We are proposing a new reward mechanism to attract liquidity and bootstrap trading volumes. Similar to Liquidity Mining, there will be a weekly distribution of L2 tokens based on volume traded. This is intended to be highly attractive to bootstrap trading volumes for the first few months of derivatives trading then become net-positive quickly over time. This means the amount of L2 earned in the initial period, will likely well exceed the value of trading fees paid by those traders.
- Makers/Institutional Market Makers — A portion of this pool will be paid to market makers over a 3 year period to bring base liquidity to key trading pairs.
WHY
Attracting liquidity and trade volume is essential. As you are aware, the DeFi landscape is now highly competitive. So we wanted to implement an additional mechanism for users to earn rewards for supporting the ecosystem. This has proven to be a successful model that incentivizes usage and long term growth.
To assist in attracting traders, we also had to secure a full product pipeline. Thankfully our partnership with BNC allows for full access to their 12–15 indices. For example they have just launched a DeFi index.
Think DeFi is all noise? Short it to zero with up to 100x leverage. We even secured a global name to market make this index and many other upcoming products.
HOW
We are proposing 50m tokens issued over a 12 month curve which rewards executed taker orders each Friday. Full description of this exciting initiative will be posted closer to liquidity rewards going live. Again, expect it to be generous for early adopters in the first few weeks/months — this is designed to bootstrap adoption.We are proposing 10m tokens for institutional market makers, paid over 3 years. We can top this up from the treasury and some key partners expressed interest to chip in and grow this MM incentive pool if it’s required.
WHEN
You guessed it — Soon™… But hey! We’ve clearly delivered everything we said we would for 3 years now. This is priority and a matter of thorough testing. It is also important to get the Token Migration and Staking out of the way.
60m L2 for Rewards. No supply inflation
No cap on Trade Volume. Limited time only
WHAT
We will be allocating 35M tokens for Ecosystem Growth, Bounties, Grants and Node Validators. We are also encouraging our partners to participate in matching funding to support the development of an ecosystem of apps powered by Gluon.
This will include:
- Development grants (who wants an AMM? Prediction Markets? Instant and gas-free ERC20 transfers/payments?),
- Validator operators, and
- An ecosystem fund to provide robust due diligence so the projects getting funded have a strong likelihood of success.
WHY
We keep hearing all the ways that projects could integrate Gluon to scale DeFi and provide a much faster/more responsive user experience. The competition between various Layer2 protocols will ultimately come down to the solution that addresses the actual needs of developers and has the broadest adoption. We are prepared to back that up with funding where it makes sense to do so.
HOW
We are proposing that a professional VC does commercial and technical due diligence on startups and companies which wish to develop on Gluon and the token community has full access to the due diligence materials and votes on which projects get funded. This is very similar to NEM Ventures (XEM), Cardano Ventures (ADA) or xSpring (XRP) using the treasury/reserve tokens to invest into their respective ecosystems — except we are proposing that our growing community has the final vote for which projects are funded. This is inline with further decentralizing our project and turning the token into a governance token over time.
WHEN
We have actually secured some incredible partners to help with these operations. Obviously we need to get token migration, staking and liquidity rewards in place but we feel it is realistic to make a start well before the end of this year on a few initial bounties and grants. And rest assured that there will be smart treasury management and likely KPI’s and vesting periods involved, to minimize supply pressure.
35m L2 for Ecosystem Growth
Scaling DeFi Apps
WHAT
Leverj has developed a governance framework that allows voting on proposals to migrate to newer App Logic smart contracts without undermining the balances of users that have committed assets. We will be using this for upgrading Leverj contracts from Q4 2020.
WHY
Distribution to users of Gluon can achieve a much broader and fairer governance to ensure the future stability of the protocol while avoiding centralization risks. By continuing to grow the percentage of tokens circulating among users of Leverj/Gluon we expect to see the decentralization improve over time.
WHEN
This increase in supply will be gradual. For example liquidity rewards will be paid to traders on a weekly basis. The Node Validator rewards monthly. Ecosystem grants and investments, we will likely have a bi-monthly batch that is voted on by token holders and so forth.
HOW
Part of the ‘how’ is a reconfirmation that because our intention has always been to migrate into a DAO, our company equity is actually worthless. This is the reason the founders/company own so many tokens. They are not for sale. They are so we can have revenues and pay for operations. We expect staking to be *the* key revenue driver for us and therefore will stake our tokens. The aim is to have the community own over 50% of the supply eventually (around 18–24 months from now).
We explored a wide range of concepts and the best way to surmise is to state that super-affiliates are a multi-billion dollar industry and they are used to life-time cash rewards. Instead of adding friction by offering payments in our native governance token, we are modeling out a % of staked revenues to go into an affiliate payout pool. Network / Affiliate marketing should be a powerful force if deployed correctly and we expect to have something in place by the time the token migration and staking has been activated.
We are setting aside a small amount of tokens to cover the costs of insuring the leverj.io platform against catastrophic technical failure. While our platform’s smart contracts have received several rigorous audits by 3rd parties, we have listened further to the community and agree insurance against unlikely technical failure will further protect the project.
ESTIMATED SUPPLY AFTER 12 MONTHS
This is an **ESTIMATE** of how the circulating supply may look like by Oct 2021:
| Percent | # of LEV | Holder | ||
| Control of Keys with Leverj: | ||||
| 20.41% | 204,116,643 | Treasury – Staking | Not in circulation – Staking only. | |
| 21.33% | 213,250,000 | Team | Not in circulation – Staking only. | |
| 0.20% | 2,000,000 | Treasury – Opex | Estimate remaining pool size. | |
| 1.50% | 15,000,000 | Go To Market / Marketing | Estimate remaining pool size. | |
| 0.67% | 6,666,000 | Liquidity Rewards & Market Makers | 66% of the MM part ;eft (2 more years of use) | |
| 2.33% | 23,331,000 | Ecosystem Fund, Grants / Bounties, Validator Nodes, Insurance | 66% of the MM part ;eft (2 more years of use) | |
| 12.33% | 123,324,275 | Locked Treasury | Not in circulation for another 7 years. | |
| Free Float Circulating Supply: | ||||
| 41.23% | 412,312,082 | Public Wallets | Current circulating supply | |
| Total | 100.00% | 1,000,000,000 | ||