ISS Token distribution
The majority (~66%; i.e. up to ~66m) of total supply (limited to 100m) of the ISSUAA Protocol Token is issued to the community/users of the platform, which add value to the platform (i.e. liquidity providers, ISSUAA DAO governance participants and voters, veISS holders). Especially in the early stage it is crucial to attract liquidity to the platform; therefore liquidity providers in the ISSUAA assets and ISS pools are rewarded with liquid ISS tokens. Also, tokens will be rewarded to users that lock their tokens for veISS tokens and to users that participate in ISSUAA DAO governance voting processes.
During the ISSUAA V1 phase, 35.5m IPT tokens (the predecessor of the ISS token) were issued to the early contributors (15m), angel contributors (~2m), users participating in the testing and bug bounty program (~2.5m) as well as liquidity providers (~16m). These tokens will be airdropped as ISS tokens with the start of ISSUAA V2.
Every week, a predefined percentage of 3% of the remaining active rewards pool will be available for rewards to liquidity providers, veISS holders and voters in the ISSUAA DAO governance voting process. The following chart shows the distribution over the first two years - assuming ideal conditions and that all tokens are claimed.
At the start of V2, the rewards pool consists of 50m ISS tokens. The percentage as well as the amount of ISS tokens, which are provided to the rewards pool, can later be changed by the DAO. This will likely be necessary when the ISSUAA protocol is later deployed on further chains, in order to make sure that rewards can also be paid on these additional chains.
The following chart shows the possible distribution over the first two years - assuming that all rewards are claimed and that all liquidity providers receive the maximum possible boost factor of 2.5x on their rewards:
The weekly reward amount is split into two parts:
The first part is reserved for the veISS holders. Their share of rewards is calculated by dividing the Total Supply of veISS tokens by the maximum possible amount, assuming that all outstanding ISS tokens would be locked for the full 4 years. This means that ISS holders, which keep their tokens locked for the full four years, will never be diluted.
Each account has the chance to generate voting points in every individual ISSUAA DAO voting process. Voting points will be granted to those votes that are on the majority side of the vote (for yes or no votings) or not more than 1% away from the voting result for votes that ask for a price of an underlying asset.
To make sure that rewards for veISS holders are also paid in weeks with no active votes, claiming the prior weeks rewards will automatically record voting reward points in line with the current veISS holding.
The second part is reserved for liquidity providers. Each pool will get an equal contribution each week, with the exception being the ISS pool, which receives a 5x contribution compared to the other pools.
Liquidity Providers can earn ISS rewards proportional to their share of LP provider tokens in the individual pools. However, the actual payout is depending on the amount of veISS tokens a user holds:
Let assume that a user owns 10% of the LP tokens in one of the asset pools. Assuming that this pool would be rewarded 100k ISS tokens in the current rewards round, the user would be entitled to claim up to 10k ISS tokens as rewards.
Out of these 10k ISS tokens, 40% or 4k are considered the base payout. To get the full pay out - i.e. a boost factor of 2.5x, the user would need to hold at least 10% of all veISS tokens. The formula for the boost factor is calculated as following:
The maximum possible boost factor is capped at 2.5x. Rewards, which are not available due to a suboptimal boost factor remain in the reward pool and will increase the rewards in the following periods.
5% of all ISS tokens have been minted for the ISSUAA DAO during the initial deployment and are controlled by the VoteMachine smart contract. VeISS holders having a veISS balance of 50,000 tokens or more can apply for a grant of max. 100,000 ISS to be granted to anybody who should be paid for services provided for the ISSUAA DAO which the community of veISS holders consider valuable for ISSUAA. VeISS Holders will then vote whether the grant will be provided or not.
At the start of V2, the Polygon multisig wallet, which is controlled by (x) community members, holds roughly 9.5m ISS tokens. These tokens are intended to be used for several purposes:
- Bug bounties
- Strategic partners and investors
- Liquidity provision to the ISS token
ISSUAA is generally open for strategic partnerships with any partner that adds significant value to the ISSUAA protocol. This could either be other protocols or investors. Any significant investment (above 1m ISS tokens or 100k USDC) should require an onchain voting process, which then becomes binding for the multi chain signers. Funds generated from the sale will be controlled by the treasury multisig wallet. These are used to finance expenses such as audit fees and marketing expenses as well as providing liquidity for the ISS LP pools.
The following graph shows the ISS token distribution as envisaged with the start of V2 of the ISSUAA protocol: