Vectornomics — a Breakdown of our Token Distribution
Tokenomics are among the most important aspects of any project. We’ve spent a lot of time thinking about our tokenomics and are excited to share them with you. In this article, we will provide an intro to the VTX token, as well as a detailed breakdown of how VTX tokens will be distributed.
The VTX Token
VTX is the Vector Governance token. The primary utility of VTX comes in four forms:
- VTX stakers receive a portion of Vector’s protocol fees (~29% of all fees)
- Users can “lock” their VTX for 16 weeks. By locking VTX, users get:
- Higher share of protocol fees
- Gauge voting rights for Platypus, based on Vector’s accumulated vePTP balance
3. VTX tokenholders can supply VTX-AVAX LP on Trader Joe to receive incentivized emissions
4. Vector will soon establish decentralized governance, where VTX emission weighting and bonus emissions will be determined by the community
There will be a maximum token supply of 100M VTX tokens. The breakdown of these tokens and their vesting schedules are listed in the graphic below. We have also provided a detailed description of each allocation in this article.
The liquidity mining program accounts for 55% of VTX token supply and is made up of three components:
1. xPTP staking
- PTP conversion is the most important feature of the Vector protocol for generating long-term value for VTX. Thus, it is important for us to allocate a substantial portion of our emissions to xPTP stakers.
2. Stablecoin staking
- In the long-run, it is important for Vector to attract as much stablecoin TVL as possible. As our stablecoin TVL increases, the amount of fees generated by Vector will increase as well, generating value for xPTP stakers and VTX stakers.
3. LP staking
- To further enhance Vector’s success, we will need to have liquid capital markets in which users can enter and exit positions with ease. This goes for both our PTP-xPTP and VTX-AVAX liquidity pools which we will host on Trader Joe.
The distribution of these emissions will follow a logarithmic function, where the emission rate is higher early on and slows down over time. Incentivizing high yields for our earliest users ensures that Vector builds a solid base of PTP at the onset, which will increase the amount of vePTP we can earn in the long-run. This will result in long-term sustainable value and rewards for users into perpetuity. Full details of the release schedule will be available in our Gitbook documents.
Since our primary source of emissions will follow a fixed distribution schedule, we decided to allocate 15% of token supply to bonus emissions. These emissions will be used on an as-needed basis. If we see that our current emission rate is not high enough to be competitive with other protocols or the broader market, we will tap into our bonus emission supply to further incentivize rewards. These rewards can go towards xPTP stakers, stablecoin stakers, and LP stakers.
We’ve allocated 8% of our VTX token supply for the Vector team and its future employees. These tokens will have a 3 month cliff and then vest linearly over the following 18 months.
Vector is built by the core team from Magnet — a DAO which is focused on building innovative projects on Avalanche. Since Vector would not exist without Magnet, we decided to split our team tokens in half. Instead of the team getting 16% (a standard team allocation), the team is getting 8% and Magnet is getting 8%. These tokens will follow the same vesting schedule as the team and advisors — 3 month cliff and then vested linearly over the following 18 months. Once vesting begins (3 months after TGE), MAG token holders will begin to receive their allocation by staking MAG on the Magnet protocol. The longer you stake MAG, the more veMAG you will accrue, meaning you will receive a higher allocation of the VTX distribution.
This means that Vector team tokens are going to be distributed to a network of thousands of people who are passionate about DeFi on Avalanche, instead of purely to a small team of devs. These are not excess tokens that are being issued — they are coming out of the team allocation. As far as we know, Magnet is the first DAO to ever build new protocols where the DAO token holders benefit.
Magnet is a revolution in DeFi, allowing anyone to get exposure to and to take part in developing new protocols. We are heads down, focused on building innovative projects that will have a lasting impact on the Avalanche ecosystem. Feel free to join us for the ride. #MagnifyDeFi
We’ve allocated 1.5% of our VTX token supply for our advisors. These tokens will have a 3 month cliff and then vest linearly over the following 18 months.
Vector is extremely excited to be using Rocket Joe in order to bootstrap liquidity for our governance token, VTX. By utilizing Rocket Joe, we will generate initial liquidity for VTX in the form of VTX-AVAX LP. Vector will own 50% of all liquidity raised during the Rocket Joe launch, meaning that we won’t have to incentivize as much liquidity in the long-run. Protocol-owned liquidity is an extremely important aspect of any project. We will be allocating 4.5% of our token supply for the Rocket Joe launch.
These rewards will be broken down as follows:
- 4.0% of tokens for the launch
- 0.5% bonus tokens for participants
- This means participants will receive a 12.5% bonus on their contributions
The launch will start on 2/24/22 at 6pm UTC and deposits will end on 2/26/22 at 6pm UTC. Users will be able to withdraw until 2/27/22 at 6pm UTC.
The LP tokens that users receive from the launch will be locked for 3 days. Once the tokens are unlocked, a Trader Joe Double Rewards Farm will begin, where users can earn both JOE and VTX tokens from staking their LP tokens on Trader Joe.
Please see our Rocket Joe launch article for more details: https://vectorfinance.medium.com/preparing-for-liftoff-with-rocket-joe-653b114ec642
5.0% of our token supply will be allocated to our community treasury. This treasury will be used for various purposes such as bug bounties, partnerships, marketing, and community engagement. 10% of treasury tokens will be available for usage at TGE (but will not be in circulation during the Rocket Joe launch) and then the remainder will vest linearly for a year.
The vePTP Airdrop
We will be airdropping 3.0% of our token supply to vePTP holders based on vePTP balances as of February 20th at 5pm UTC. 10% of the airdrop will be available at TGE (but not in circulation during the Rocket Joe launch) and then the remainder will unlock at certain dates:
- TGE: 10%
- 3 months: 10%
- 6 months: 20%
- 9 months: 30%
- 12 months: 30% + bonus tokens
- Total: 100%
If a user claims their VTX before the 12 months are over, they will forfeit the amount that is still locked. This forfeited amount will go to a “bonus” pool which will be distributed pro rata to holders who have yet to claim at the 12 month mark.
Get ready for our Rocket Joe launch starting on February 24th! Make sure you are staking JOE to accumulate rJOE. The more rJOE you have, the more AVAX you will be able to contribute.
After that, get your PTP and stablecoins ready for our protocol launch on February 27th.
Keep an eye out for our website release, full audit report, and Gitbook documentation, all coming to you ASAP.
Needless to say, we’ve got an exciting week ahead of us!
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