Vesting Schedule Proposal

Good day Sigmadex enthusiasts :slight_smile:

We are here today to put forward some efficiency changes to the originally proposed Sigmadex vesting schedules. As you may know, the market dynamics have changed drastically over the last 6 months and traditional distribution methods which 99% of projects still use today are basic financial models (cliff, arbitrary, etc) which perform poorly in today’s matured market.

We understand the market is different and requires us to adapt.

Since we are getting close to our claim drop and launch event, we need to discuss the modification of the vesting schedules for longevity, fairness and a growth driven future.

The proposed changes are uploaded to the docs server at the link below:

I am hoping to achieve the following with this post:

  1. Highlight the proposed fundamental changes
  2. Provide adequate reasoning behind the modifications
  3. Create a discussion around the prospective changes
  4. Address any concerns with the proposed changes

Why this is important:

We are seeing more and more projects under-perform and continue in a downward spiral after their launch events by inheriting outdated or arbitrary token models.

Most Notable Changes to the Vesting Schedule:

  1. Distribution is decentralized through a smart contract architecture (source will be public on GitHub)
    • No relying on central parties for distribution
  2. Vesting is modeled mathematically against a non linear curve:
A\left(\left(1-y_{0}\right)\cdot\left(1-i^{\left(-x\right)}\right)\cdot\left(\frac{1}{1-i^{-t}}\right)+y_{0}\right)
  1. Initial circulating supply will be approximately $500,000
    • Allows appreciation for new capital contributors
  2. Liquidity will be injected at Pre-Public pricing structure
    • Fundamentally fair for all rounds
  3. DAO controlled unlock schedule for partnerships and bounties
    • Enables community to become aware of partnerships, collaborations and incentives
  4. Tokens unlock daily via timestamp method
    • Prevents uncontrollable downward pressure from traditional cliff models

Note: Valuation metrics have remained the same

Differentiating Factors

  • Fairness and longevity are at the front lines of these modifications
  • No counterparty risk (Smart Contract based)
  • Non arbitrary metrics

Please let us know your thoughts and opinions. :nerd_face:

10 Likes

As an early investor I applaud these efforts although I have never seen a model like this (which isnt entirely a bad thing)

2 Likes

I’m quite happy with this - seems well thought out - Thought I would join the forum to follow more developments - I think this will help the token value raise exponentially over time

That’s how I am understanding it also

Smart contract vault is a good way to distribute tokens. Has anyone confirmed if it will be daily

cliff model is for plebs - I think this will be the new standard

1 Like

Leave the crazy talk for telegram, the forum is for technical discussions only.

Very interesting model, I’m curious to see how it pans out as a lot of my previous investments in GameFi projects have not done so well with legacy models.

4 Likes

Projects usually attract 3 types of investors; the quick return, the long term and the (what I call) the half/half. Vesting schedules that are complicated and drawn out have an impact on those who wish a quick return, which ultimately, effects the total investment pool. The schedule suggested here would go someway in eleviating thst concern.

5 Likes

I am all in for this adjustment guys. It fundamentally makes sense. I do think that there are some pros and cons but overall this is healthy for the SDEX community.

2 Likes

Looks like the vesting periods are very similar, slightly extended on seed round but made up for by having tokens unlocked daily.

My initial thoughts:

I quite like this model as from first glance the token price can’t be obliderated day one or even a month later, also starting it at the last sale price means new money that comes in won’t have an unfair position buying pre-sale bags day 1.

I wouldn’t be surprised if price action is healthy using this pragmatic method. Evenly spread volume is much better than cliffs especially in crypto where liquidity is never consistent.

+1 to try this method out from my books :+1:

2 Likes

Thank you for starting this discussion @peter

As a long term focused project we have definitely outgrown traditional means - while legacy methods have served it’s initial purpose, it is much too broad and needs more structure. I believe this one off approach will perform well from a rudimentary standpoint.

Here is a question and potential add-on I have come up with after seeing the proposal:

  1. Exponential unlock eventually surpassing linear range
    Eventually the unlock schedule (or curve in this sense) opens up very heavily at some point down the line and surpasses linear ranges which in theory can be devastating for price.
  2. Adding a reward at the end of the vesting period
    I believe adding a reward claimable at the end of the vesting period should be minted if withdraw was never called. This incentive could go along way depending on what is at the end of the curve.

LMK thoughts on the above. Also I respect the creativity from the team, we definitely need more of this.

5 Likes

Sorry about that. This new vesting schedule looks to be one of a kind, I did get quite excited seeing the vault system and how the first year looks to be very slow unlock

Blockquote 1. Adding a reward at the end of the vesting period
I believe adding a reward claimable at the end of the vesting period should be minted if withdraw was never called. This incentive could go along way depending on what is at the end of the curve.

That actually sounds like a great idea. Incentivizes holding, the only thing that it would prevent would be the generation of transactions and activity.

3 Likes

Has anyone else tried a model like this? I believe they are mostly linear. Sigmadex seems to want to align theirselves as a first to market protocol. Very interesting take on the crypto and more specifically DEX world. Gone are the days of an easy swap protocol, we have gamification, staking, farming, NFTs and more.

2 Likes

It looks like the Pre Public tokens unlock faster and have a shorter vesting schedule. Even at a higher valuation I see limitless upside.

I’d rather jump off a cliff than invest in another cliff centric vesting schedule.
Sometimes you have to blaze your own path - I really like this and would like to learn more about how you came up with it team.

1 Like

I like this approach. I selfishly would like to see some kind of rewards for keeping the tokens in the vault and even at the end date the tokens be automatically added to liquidity or to a staking pool to continue compounding. A lot of people have had their money in for a long time and this would be a way to pay them back in a way that benefits the project.

1 Like

The last 4 projects I was involved in took a beating after the initial launch. The first month looked promising however after the whales got done with dumping their tokens there was barely any buy action for me. It’s refreshing to see something that helps move away from the early dumping and hopefully keeps the project afloat for years to come. I would love to be involved in some liquidity pools and farms for some NFTs too. Seems you can have your hand in to a couple different pots and experiment with what works best for you

1 Like

From a second glance:

I believe early investors continue to be protected under this framework through price/hype appreciation.

Principally though, this sort of vesting mechanism, with additional game theoretical incentives based on holding until the period completes entirely makes a lot of sense to me, more so now than when originally introduced yesterday. After digesting it the past 24 hours I am actually excited to see this play out.

Notably, Sigmadex clearly has far greater protections for the minority and newcomers than any other protocol I can think of. Especially with this system in place.

4 Likes