Summary:
TribeOne will be adjusting $HAKA tokenomics and vesting schedules to fund new product developments which will add value to $HAKA over time in a sustainable manner. New developments include an NFT perpetual trading DEX, arranging partnerships with market makers to bootstrap open interest, and the launch of the TribeOne native stablecoin (hUSD). All of these initiatives aim to increase token value by increasing TribeOne usage, and fee revenue. We feel that adjusting the $HAKA tokenomics to fund new protocol developments is necessary to continue innovation and market share against our competition in the NFTfi space.
Background:
Perpetual NFT DEX (TribeOne v3):
The in-house built NFT perpetual futures DEX will be an oracle-based DEX that will allow speculators to go long or short floor prices of popular NFT collections with leverage. The DEX will be built on Arbitrum to take advantage of low gas fees and high chain security. A custom high latency pull based oracle will be used with smart floor prices to effectively price the NFT floor prices. The justification of reducing the vesting of $HAKA attributes to the operational costs required to create an infrastructure robust enough to handle liquidations and pricing in an efficient manner. Since no product similar to what we are building exists (we are quite aware of other NFT perp dexes, but none with the full feature set as that of our v3), the NFT Perp DEX has a great potential to be a first mover.
Market Making and Liquidity Bootstrapping:
All perpetual futures trading platforms require market makers to balance the books. For every perpetual future long, there must be a counterparty taking the other side of the trade. Since perpetual futures are priced upon an underlying asset, excessive traders going long requires market makers to buy the underlying asset on the spot market. Market makers usually make small profits but accumulate said profits through high volume of trades but in doing so, also take risk in holding the underlying asset which fluctuates in value.
A portion of the $HAKA tokenomic re-adjustment will be used to fund market maker operation to ensure there is enough liquidity for the market to move efficiently. Since this would be a perpetual futures DEX based on NFT floor prices, the risks on the underlying greatly exceed the risks of traditional perpetual futures on altcoins. NFTs are unique asset which all have their own pockets of liquidity. The defragmentation of liquidity is what makes the risk of holding the underlying asset high as market makers can be left with an asset with no liquidity.
Funding market making and liquidity bootstrapping initiatives will be a costly endeavor but critical in the success of the NFT perpetual swap DEX.
TribeOne Native Stablecoin (hUSD):
TribeOne will release an overcollateralized algo stablecoin for the v3 launch. The stablecoin could be minted by using a basket of tokens as collateral ($HAKA will be used initially). As we have seen with other protocols like FRAX, Synthetic, etc, protocol native stablecoins can improve protocol efficiency and generate increased utility and protocol’s own liquidity to drive fee revenues to its long term token holders. Our initial goal is to allow the utilization of hUSD to long/short NFT perpetuals as margin collateral. For example, to build a market of 50M (10X leverage, 5M of margin collateral is needed which at 400% means 20M worth of HAKA needs to be staked) - thus signifying the importance of increasing the rate of emissions in Tribeone tokenomics, to sustainably allow the creation of these perp markets.
Proposal:
Increase token emissions as per the below table to:
-
Fund development for NFT Perpetual DEX
-
Fund partnerships and agreements with market makers for bootstrapping liquidity
-
Fund development and bootstrapping liquidity for our algo stablecoin
-
Reduce token vesting for select groups
Impact of Proposal:
Tokenomics:
To fund the above initiatives, the following token distributions will be considered:
-
Advisors
-
Community incentives and rewards
-
operational expenses
-
marketing expenses
-
bad debt risk mitigation
-
treasury
All of the distributions listed will have a vesting schedule that is 12 months less than the current schedule. Please see the impact table below
Old Distribution Schedule:
| Token Distribution | Percentage of Supply | Monthly Distribution | Terms of Unlock |
|---|---|---|---|
| Community Incentives | 12.21% | 0.169% | 72 month vest |
| Operational Expenses | 11.5% | 0.1858% | 60 month vest, 6 month lockup |
| Legal | 4.25% | 0.0885% | 48 month vest, 1month lockup |
| Marketing Expenses | 19.64% | 0.327% | 60 month vest, 2 month lockup |
| Bad Debt risk mitigation | 10.62% | 0.1475% | 72 month vest, 3 month lockup |
| Treasury | 10.09% | 0.140% | 72 month vest |
New Distribution Schedule:
| Token Distribution | Percentage of Supply | Monthly Distribution | Terms of Unlock |
|---|---|---|---|
| Community Incentives | 12.21% | 0.2544% | 46 month vest |
| Operational Expenses | 11.5% | 0.2323% | 46 month vest, 6 month lockup |
| Legal | 4.25% | 0.1012% | 40 month vest, 1 month lockup |
| Marketing Expenses | 19.64% | 0.5456% | 34 month vest, 2 month lockup |
| Bad Debt risk mitigation | 10.62% | 0.2213% | 46 month vest, 3 month lockup |
| Treasury | 10.09% | 0.1682% | 58 month vest |
Conclusion and next steps:
After a few weeks of discussion on Forums, any improvements/adjustments will be considered. After the snapshot voting has passed, the proposal will transition to on-chain DAO voting system where $HAKA will be used to cast votes to finalize the TIP.
Mitigation for the above revisions
Legal In anticipation of dealing with further risk is management of legal framework with NFT perps|
Marketing Expense Increase budget to ensure onboarding of Top tier NFT influencers|
Bad Debt risk NFT perps will carry increased exposure to risk, additional capital to be deployed to mitigate
Community Incentives To drive traffic, onboarding of Perp traders would be incentivized to ensure more user participation
Operational Expenses The recruitment of additional deveOps to ensure smooth functionality of the NFT perp dApp