BGIP-4: New Proposal for $BOOZE Airdrop Mechanism & Vesting

BGIP
1

Authors

goodgangmaster

Abstract

This proposal aims to revise the current $BOOZE token airdrop mechanism and vesting options to better align with long-term value creation and stability within the ecosystem. The existing airdrop model presents issues, including insufficient incentives for long-term holding, risks of market instability due to token concentration among a few holders, and premature full dilution within four months. To address these, I propose new airdrop and vesting mechanisms designed to encourage sustained participation, stabilize token distribution, and prolong the gradual release of tokens to optimize benefits for the community and the project. The proposed changes introduce staggered vesting options with bonus incentives for longer commitment, providing a more structured and strategic token distribution model.

Motivation

The current token airdrop mechanism and vesting options are unlikely to serve as an effective tool for the token’s value appreciation for the following reasons:

  1. Lack of Vesting Incentives: The vesting periods are too short, making it likely that everyone will choose the maximum vesting option, resulting in a lack of genuine incentives for long-term holders.
  2. Market Stability Issues Due to Token Concentration: As the project started with NFTs rather than a DAO, sufficient consideration was not given to a tokenomics structure that would support effective DAO operations. This has led to an over-concentration of tokens in the hands of a small group, creating the risk of a market collapse if even one or two of them decide to exit immediately after TGE (Token Generation Event). The current mechanism does not have sufficient safeguards to prevent such a scenario.
  3. Premature Full Dilution: When considering the fully diluted value (FDV) of tokens outside community-controlled supplies (Treasury, liquidity pool), the current structure results in maximum dilution within just four months. Many advantages can be leveraged by operating with a smaller circulating supply and market cap immediately after TGE, but a four-month timeline is too short to fully exploit these benefits.

Specifications

Airdrop Mechanism

  • A snapshot of eligible NFT holders will be taken after the token launch scheduled for the end of October 2024. The snapshot date will be communicated to the community after it is taken to prevent abuse of the airdrop mechanism.
  • Airdrop allocation amounts will be calculated based on NFT rarity (Human 1 : Mutant 8.8 : Genesis 44.1).
  • Airdrop allocation numbers will be distributed based on the chosen vesting option, with the entire vesting amount linearly distributed weekly over the selected period.
  • Eligible addresses can choose a vesting option for the remaining amount.
  • Airdrop-related operations will be managed by Planetarium Labs.

Vesting

  • Initial Distribution:
    • Genesis: 5%
    • Mutant: 1%
    • Human: 0%
  • Vesting Options for Remaining Amounts:
    • Zero Vesting: At TGE, the initial distribution is combined to make a total of 40% of the total allocation.
    • 1-Year Vesting: Combined with the initial distribution to provide 80% of the total allocation. The remaining amount after the initial distribution will be linearly distributed weekly over one year.
    • 2-Year Vesting with 1-Year Bonus Cliff: Provides 100% of the total allocation. The remaining amount after the initial distribution will be linearly distributed weekly over two years. After one year, 50% of the tokens burned through zero vesting and 1-year vesting options will be redistributed to those who chose the 2-year vesting option as an additional bonus.
  • The penalty amount will be distributed based on the allocated amounts of each NFT (not address).
  • The remaining 50% of the penalty amount will be returned to the DAO treasury for future community growth.
  • The start of the vesting process for each NFT must be manually initiated through a “Vesting Execution.” This serves as a penalty for inactive holders who stop participating after purchasing the NFT.

Vesting Choices Example

Below is an example to illustrate the proposed vesting structure:

NFT Holder NFTs (Type and Quantity) Initial Allocation Initial Distribution (%) Vesting Option Remaining Allocation Remaining Allocation After Burning Bonus Allocation (After 1 Year) Total Received Amount At TGE After 1 Year After 2 Years
Eve Genesis (1), Mutant (1), Human (1) 458,150 19,491 2-Year 438,660 438,660 1,216,285 1,654,944 19,491 238,820 1,654,944
Peter Genesis (1), Mutant (1), Human (1) 458,150 19,491 1-Year 438,660 350,928 0 350,928 19,491 370,418 350,928
Ethan Genesis (1), Mutant (1), Human (1) 458,150 19,491 Zero Vesting 438,660 175,464 0 175,464 175,464 194,954 175,464
Bob Genesis (1), Mutant (1) 449,650 19,491 1-Year 430,160 344,128 0 344,128 19,491 363,618 344,128
Charlie Genesis (3), Mutant (2), Human (30) 1,529,150 57,724 Zero Vesting 1,471,427 588,571 0 588,571 588,571 646,294 588,571
Dave Genesis (5), Mutant (1) 1,949,050 94,461 Zero Vesting 1,854,590 741,836 0 741,836 741,836 836,296 741,836
  • This table demonstrates how the different vesting options affect the total received amount, including potential bonuses from tokens burned through other vesting choices.
  • human = 8500, mutant = 74800, genesis=374850 (apply 1: 8.8 : 44.1)
2 Likes
2

Glad to see the proposal! Preventing free-riders is a great idea.

Let me ask a few questions.

1) Calculation

As far as I understood the mechanism is like below:

  • Zero Vesting: Gets 40% at TGE (TGE: the event where BOOZE gets distributed for the first time)
  • 1y Vesting: Gets 80% in total with 1y vesting
  • 2y Vesting & 1y Bonus Cliff: Gets 100%+bonus in total with 2y vesting, 1y bonus cliff

But there’s a bit of mismatch here, like After 1 year is greater than After 2 years, and Remaining Allocation After Burning + Initial Allocation is greater than 40% or 80% for Zero Vesting or 1y Vesting.

Seems you have calculated Remaining Allocation After Burning with (Initial Allocation - Initial Distribution)*(1 - burn_ratio), which makes the total amount greater than 40% or 80%. Is this intended?

2) Initial circulating tokens

In the proposed mechanism, users who chose Zero Vesting would have most of the circulating tokens at TGE.

  • At the time of TGE,
    • Zero Vesting: Receives 40% of the allocation
    • 1y or 2y Vesting: Receives ~5% of the allocation (if they only have Genesis)

Zero Vesting is the least community-aligned option, which may lead to claim and dump by them. And users who chose a longer vesting with long-term vision may feel that they couldn’t even have the opportunity if the token price goes down, as they have a small amount of the tokens around TGE. This is why we proposed a larger initial distribution amount equally for all vesting options in BGIP-3.

But we know that our proposal might not be the best one, and love to discuss it with others! What do you think on this one?

3

Thanks for the great feedback.

1) Calculation Correction:

You’re absolutely right, there was a miscalculation in the vesting example. I was indeed calculating the “Remaining Allocation After Burning” incorrectly by applying the formula as you mentioned: (Initial Allocation - Initial Distribution) * (1 - burn_ratio). I’ll correct this to ensure that the total amount is in line with the intended percentages of 40% for Zero Vesting, 80% for 1-Year Vesting, and 100% for 2-Year Vesting. (I’ll make the changes when I have time.)

2) Initial Circulating Tokens and Community Alignment:

You make a valid point about Zero Vesting holders having a significant amount of tokens at TGE and potentially claiming and dumping, which could undermine the confidence of long-term investors who opt for longer vesting periods.

However, it’s essential to remember that the primary goal of vesting is to limit the initial circulating supply and avoid market oversaturation. If the maximum vesting option spans only 4 month (or if all vesting options have similar initial distributions), we risk flooding the market with the entire token supply after just four months, which could have a worse impact. That’s why extending the maximum vesting period beyond two years and making that option the most attractive is critical to curbing token circulation early on.

The fact that those who choose the Zero Vesting option will receive a significant portion upfront is intentional because their immediate contribution (through burning tokens) allows the system to reward long-term vesting users with higher bonuses. The Zero Vesting option should cater to those looking for short-term benefits, while the longer-term options need to be attractive enough to retain tokens in the ecosystem for longer durations.

Ultimately, each vesting option should be appealing for different reasons, ensuring that each group—short-term, mid-term, and long-term holders—plays a role in stabilizing the token’s value and distribution over time.

1 Like
4

Great point! Basically I think it’s good to have a longer vesting like 2 years. What I wanted to mention was that 40% vs 5% of the initial circulating supply would be a radically skewed one. But I understand and agree with your design purpose in some ways. Thanks for the detailed explanation!

It would be great to hear what other community members think about this proposal.

5

Thanks for the proposal!

It appears that implementing this would require smart contract development work, and it would need to have a engineering team for that work. Please provide clarification on this aspect.