This blog explores the intricacies of Klayr’s tokenomics. We’ll dive into the mechanisms driving the increase in total supply and provide a comprehensive understanding of the distribution of added tokens. We’ll also explain the dynamics shaping the Klayr ecosystem, providing valuable insights for enthusiasts and stakeholders alike.
Expanding the ecosystem: the strategic addition of 30M tokens
In our most recent blog update, we announced the decision to increase our total token supply. This choice, among numerous possible paths, is primarily aimed at immediately bolstering our team’s capabilities and driving the platform’s growth from its inception. We see this action as essential for improving liquidity through market making, maintaining our listing on key exchanges, supporting market activities, and offering greater incentives to our community and team members alike. Here’s a breakdown of how and why we’re implementing this addition.
The distribution plan
The additional 30 million tokens each serve a specific purpose within the Klayr ecosystem. They will be allocated as follows:
- Exchanges (6.67%): 2 million tokens allocated to establish and enhance our presence on exchanges, thereby increasing liquidity and accessibility for our users.
- Market Making (16.67%): 5 million tokens dedicated to maintaining liquidity and stabilizing price volatility on exchanges. This ensures a healthy trading environment for our community.
- Bug Bounties (3.33%): 1 million tokens solely for rewarding community members who identify and report bugs within our system. This initiative is crucial for ensuring the security and reliability of our platform, fostering a culture of proactive risk identification and mitigation within our community.
- Ecosystem Growth Fund (31.7%): 9.5 million tokens with a vesting period of 36 months and a quarterly distribution for fueling the expansion and vitality of our ecosystem. We will invest in promising projects, provide liquidity, give out grants & community bounties, and stake on reputable validators to support this goal.
- Airdrop (10%): 3 million tokens dedicated to an airdrop incentivizing token holders to hold onto their KLY tokens for an extended period of time.
- Team (10%): 3 million tokens with a vesting period of 60 months and a quarterly distribution to foster loyalty within the Klayr team, attract top-tier talent, and incentivize exceptional performance. These tokens will be strategically allocated to the existing team members and future talent over the forthcoming years.
- Shareholders (6.67%): 2 million tokens with a vesting period of 36 months, a 24 months cliff, and quarterly distribution, to provide shareholders with a direct stake in the project’s success and encourage their ongoing support and engagement.
- Strategic investors & advisors (15%): 4.5 million tokens to recognize significant contributions and secure continued involvement in guiding the project’s growth, aligning interests with the long-term success of the venture, and bringing in liquidity into the company, enhancing its financial flexibility. A vesting schedule will be implemented on an individual level.
Why we are adding to the supply
The decision to increase the token supply by 30 million, representing a 19% increase from the current supply, was not made lightly. It stems from a thorough analysis of our ecosystem’s needs and a forward-looking strategy aimed at long-term success. This addition is pivotal for several reasons:
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- Supporting growth: As we continue Lisk’s Layer 1 technology, additional resources are needed to scale operations, enter new markets, and innovate. The increased token supply provides the financial flexibility to pursue these avenues aggressively.
- Enhancing liquidity: A more considerable portion of tokens in circulation allows for smoother trades and less price volatility, benefiting both our users and the platform.
- Incentivizing participation: By allocating tokens for bounties, grants, and incentives, we’re investing in our community and team, acknowledging their vital role in our ecosystem’s success.
- Sustaining development: The allocated tokens for treasury and market making are essential for sustaining ongoing development, operational costs, and ensuring the platform’s long-term viability.
- Staking opportunities: The tokens in the Ecosystem Growth Fund and the Operations category will be eligible for staking from the Token Generation Event (TGE) onwards, regardless of the vesting. This ensures that the Klayr team can support contributing validators while generating income for the project. The staking rewards will be utilized for operational costs, bounties, and grants.
Moving forward
With a new total supply of approximately 183M tokens, we’re paving the way for a healthier, more lively ecosystem. This increase is key to giving the Layer 1 the boost it needs to reach our mission of enabling 1 million individuals to profit from next-generation solutions facilitated by our toolkit for digital ownership by 2030. We’re eager to build this future alongside our community and are confident that together, we will make great strides.