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The Zircon Gamma Token (ZRG) was fairly launched on September 15, 2022 with an initial reserve of a total 5% to the team, and the rest destined to the community.
Currently, the Zircon Protocol earns through swap fees and the Pylon entry/exit fees (about 60% of the total is taken as revenue, while the remainder is used for the Stable IL compensation).
We aim to implement an automatic buyback smart contract that will use platform proceeds to purchase ZRG on the open market. Until August 2024, when the distribution phase for ZRG is finished, the tokens shall be distributed equally between the Zircon DAO treasury and Zircon Labs.
After August 2024, all rewards should go toward burning ZRG, and everyone will be able to benefit from the reduction in supply.
The role of ZRG is that of an incentive aligner between users and maintainers of the platform.
We believe that current models often fail to bring the two parties in full alignment. Simple "farm token" models incentivize extractive behavior from users (e.g. mercenary farming).
Staking-based or pure buyback and burn models will often extract value from users and gradually lead to monopolizing behavior from the DAO (as wealth gets concentrated and maintainers no longer use the protocol).
Hence, the ZRG model follows two principles:
- Actions that can aggressively extract value from the protocol will be gated behind ZRG staking requirements (ensuring that negative actions also damage the user)
- Users should always be able to acquire tokens without purchasing them from existing holders (or, at the very least, hoarding should be disincentivized)
The practical implementation of these principles is still WIP, but should be gradually introduced throughout 2023.
The Max Supply for ZRG is 1,000,000,000 ZRG (1 billion)
The distribution is:
- 50 million ZRG (5%) as initial Zircon Labs bootstrap (half available at TGE, rest vested over 9 months)
- 600 million ZRG (60%) as liquidity mining distribution
- 64,146,364 ZRG (6.4%) as initial airdrop supply
- 285,853,636 ZRG (28.5%) as supply devoted to the DAO
The liquidity mining distribution formula follows a Bitcoin-like model, with regular “halvings”.
The exact formula for the liquidity mining circulating supply is:
Min(maxLiquidityMining, baseMonthlyAmount * monthsCount * (strength/(1+floor((monthsCount)/halving))))
- maxLiquidityMining is the max emission, 600 million ZRG
- baseMonthlyAmount is defined by the distribution length (24 months) and equals 25,000,000
- monthsCount is the number of months from launch, starting from 1.
- Strength is an arbitrary parameter, equal to 3
- Halving is the frequency of halvings, also set to 3.
In practice, the first three months would have 75 million ZRG minted, the three months after 37.5 million and so on. According to this schedule, there should be a maximum of 300 million ZRG minted for liquidity mining rewards as of early February 2022.
The formula should be treated as a maximum, not necessarily as the exact amount to be minted every month.