Graviton treasury farming is the basis that the project’s sustainability rests upon. In this article, we reveal a renewed, advanced approach to the treasury configuration which reflects our up-to-date understanding of what lies at the core of our community’s expectations and needs.
Graviton governance and the way it is set up is going to have a major influence on the system during the entire lifetime of its evolution. Achieving sustainable growth that would place Graviton among the market leaders is a key priority for the initiators of the project. Launching a project with a flexible and robust strategy is crucial, as any kind of governance design that is too rigid or imbalanced at the start of the project may harm the whole system both in the short and long term.
Building a successful DeFi project requires a lot of right decisions. The incentivization system needs to be designed in a way that would make the community willing to be active contributors, while also filtering out malicious or apathetic actors.
In Graviton, for instance, users are encouraged for proactive work like creating liquidity pools and helping expand the ecosystem.
In addition, enough market making resources are needed to ensure liquidity growth.
It is also practically impossible to avoid marketing activities in this highly competitive industry, and highly skilled developers, researchers, and creators need to be motivated enough to dedicate their time to building the product, which makes it evident that sufficient funding is essential for success.
The funding mechanics should remain sustainable in the long term, supporting not only the team of contributors, but the entire community around the project. We envision several sources of funding and ways of managing it.
The concept of treasury farming inspired by DAOs is a self-managing approach to bootstrapping initial liquidity, which ensures an even value distribution to all its participants. This approach seems optimal for maintaining an inflow of resources that can be regularly converted into liquidity for the token.
Since Graviton is aiming to connect ecosystems together and bring in multiple large market players, there is a need for a mechanism that would allow us to involve them without diluting the shares of the community.
At the same time, the approach to funding must be balanced to demotivate any short-term dumping strategies and equalize the influence of the “big players” with the broader community. This is the main reason we are designating a separate allocation for strategic partners, ecosystems, and funds, to achieve flexibility in project funding, in provision of liquidity, as well as an increased utility and investment attractiveness of the GTON token. Now, alongside a 10% allocation to early birds, 20% of the allocation is assigned to strategic deals with ecosystem-level actors. This separation prevents large deposits from our strategic partners from diluting the shares of EB participants, which will result in a fairer and more even community-driven launch.
Analyzing potential ways of forming the treasury, a hybrid approach with initial community farming and a separate allocation for Strategic Partners and Investors, which include ecosystem-level actors, VC funds, and AMMs, was identified to be the most promising means of funding.
Below is the design for the governance roles:
The EB share remains undiluted by regular backers, and with a new option for the strategic investors to have a separate fixed share, there is more opportunity for the core community to be first in line to secure a part of the planned emission. Graviton adheres to a fair initial token distribution through the Treasury Farming mechanics. The project has been launched with a deposit-only phase, meaning that there will be no difference in share distribution whether a user’s deposit occurs at the beginning of the period or at the end, since farming itself is going to start at a later date.
Liquidity provision is at the core of Graviton and reflects its primary goal of incentivizing users to provide liquidity to wrapped tokens.
In the token wrapping process, assets from origin chains locked in bridges are sent to yield farming in various protocols and АММs, such as Curve, SushiSwap, PancakeSwap and others. Liquidity providers will receive LP tokens that will be automatically included in their portfolios and could be sent to Graviton farming. Liquidity providers’ income in GTON will depend on the amount of earned LP tokens, as well as the asset, the pool, the exchange and the blockchain in which the exchange operates. Proceeds from this type of yield farming constitute a major source of rewards.
Providing strategic DeFi partners, funds and ecosystems with a share which does not dilute others will allow for preserving the community’s impact and at the same time making consistent investment offers. All negotiations with such large-scale actors will be conducted transparently by the core contributors and multisig providers.
Although no deals have been made yet and none are planned until the end of EB, we have made plans to negotiate deals with representatives of large blockchains & ecosystems such as Fantom, Waves, Binance Chain, Huobi Chain etc, and their respective funds. Other potential collaborators are top-tier VC funds that could provide liquidity across the entire range of Graviton integrations, including LP for the assets of those projects from their portfolios that aim to branch out into cross-chain DeFi and can facilitate this process via Graviton incentive programs.
The operational and development issues, especially at the early stage, have to be addressed decisively and quickly. To tackle these issues, allocation for operational and development needs is proposed. This category of farming shares will be managed by the core development team.
Below are the most likely potential expenditures that go under the Operations allocation share:
1. Liquidity on AMMs.
LPs will be encouraged to provide inter-chain liquidity for GTON, however for initial liquidity boost of GTON on AMMs, Treasury funds will be allocated, as described below.
2. Buybacks & Burn events
The proceeds from different kinds of farming could be used to buy back GTON in the market to redistribute among existing GTON holders.
3. GitCoin Grants for Devs
GitCoin is a platform that allows for finding and employing open-source teams to facilitate the development of blockchain projects. At later stages of expansion, Graviton can solicit services of GitCoin developers to accelerate product development.
4. Marketing Events: hackathons, meetUps, ambassadors’ reimbursement.
A key function of Treasury farming is to build an integral foundation for a sustainable financial architecture of Graviton in the future. Subsequently, an economic incentive system will form, incorporating new mechanics of farming, governance, and fee-based reward distribution.
The success and attractiveness of GTON is reliant on its initial liquidity, which will be formed from EB treasury funds. Stablecoins that are currently being locked in the treasury can be considered as collateral (backing) for GTON, which can be periodically released to redeem the token and add liquidity into AMM services (e.g. Uniswap).