Token vesting and distribution. Trends and ways forward

Transcript

hi everyone thanks for being here I'm Fabio I'm the founder of token Ops we are a One-Stop shop type of tool to manage token distributions and generate insights over their life cycle um so it's between something within Carta and Nancy and I'm sorry in in web 3. so the talk today is going to be centered around the key questions about pre-founders and investors everyone took investing which is you know we tried the right distribution terms what are the supply emission rates that new ecosystem should should build with the many unknowns on token distribution what are the impacts on price of the unlock schedules if there are any best practices and ways forward from from the

industry and if there is any tools available to manage all all of this so I'm going to start with with an overview on the research that has been conducted in the industry and on these I have a couple of watch outs and a few acknowledgments so first like this is mostly descriptive statistics so correlation and causation on two different things so no strong statements here is just an overview of what has happened in the space uh there is different research approaches and different data sets that you will see here and none of these is advice of any sort the shout out is to my friend ahim from Australia Ventures Robert and to six-man Ventures for tukala Mustafa for the research they

conducting the space so they analyze two different samples of of the three companies and they found out basically there's a very wide range of vesting terms which seem to be dependent on what are the what three sector the market conditions and the respective stakeholder is vesting from it so we see a very wide range from zero to nine years vesting with with a mean of one to two years in the in the sample from a dryer Ventures with a cliff that goes between 0 and 26 months with the six months Cliff average while six-man Ventures which which has analyzed companies like uni Swap and like the largest protocols currently in in the

space this year range between one and six years with a mean of 2.3 with um with the unlock size that goes between 0.2 and 25 percent per per step and I mean at 12 percent um why are we looking at all this because there is actually an impact on price so the supply release into an ecosystem um causes high volatility and and price pressure especially in the first part of the vesting life cycle which eases as the supply gets mostly invested so you can see from outrage Adventures actually in the moment of Eye Supply and low demand that's when the price drops and there is high volatility while what in

the other in the research you can see on the right you can see that when the tokens are mostly vested so when the 70 of the supply is vested actually the the tokens tend to perform much better so they have a 30 price increase which happens both in the moment of like bull market and Amber Market um then it is true that price decrease when when unlocks happen this is true for private unlock events so for for public unlocks since the token security supply unlocks due to public events is a small is below one percent there is actually no significant correlation between these

unlocks and the impact on price so we see basically price um declining 15 days before unlocking 15 days after with a much strong stronger correlation in the in the seven days window so pre and past seven days it's where you can see the most of the price impact which tends to be you know less relevant as we go to 15 days and and after because there's a lot of like Market stuff happening that just impact the price as well as the unlock um So based on what you've seen here there's a few best practices that could be extrapolated from these which is what six-span Venture is proposing while

outlier as uh so again shout out to ahim was here um is proposing a new way of doing investing which is adjusted for for kpis so again looking at the left hand side of the of the slide the there's a one percent unlock rule so the lower the unlock so the small amount of tokens you unlock um basically the less you're going to have an impact on price so if you could choose as a Founder rather trying to stream tokens by the second to to your besties rather than do yearly unlocks um rethink the way you put the cliff so if you put like a cliff after one year after two years where you have this big Supply releases that is going to impact

your price so think about again smooth releases start releasing since the beginning with uh with smooth curves and then try to get to a point where most of your supply is unlocked so you get into that 70 of your supply unlocked so that there is more liquidity in the market and you don't coach these price bumps or you could experiment around like a new way of doing this which is adjusting algorithmically your supply release based on a few kpis which could be price which could be adoption of your protocol this will cause Less Price volatility because you can for example reduce the supply when the price is high

sorry increase the supply when the price is high and reduce the supply when the price is is low this will create artificial moment of scarcity or abundance that will keep the price from from big bumps um and this is actually beneficial for both Founders and investors because investors could actually participate in in bringing the right upside to the token and the right stability um there's just one watch out here this has been you know a theoretical exercise done so it hasn't been put into practice yet so it needs a bit of Market testing so be careful with uh with using this um lastly I'll go through you know what

Founders can do at the moment in order to to manage this or like Supply release so we see the organizations and investors have three main problems so they basically lack the adopt tools to to manage the token by cycle so you need to set up your own um investing smart contracts or do the releases manually which is actually not scalable so you need to spend time and money into setting up these contracts you need to have the security all it's done for those in order to be secure and then you basically lack visibility on what is happening to to your Tech investing so all these exercises that you've seen in the previous slide are

exposed so they're based on historical data so we want to be able to predict this and observe this before it happens so what we're trying to do with tokenopsis create this type of software where you can control the entire distribution of tokens manage the accounting and compliance part which is becoming more and more relevant as Regulators are cracking down on the industry and you can generate all these insights in a predictive way we'll also open API soon so that we can integrate with the other platforms that are being used in the industry to do investor relations and accounting so just a quick um work through

with our tool you can integrate an investing contract any token streaming protocol we started with uh with super fluid at the moment and you can see all the stakeholders when they are unlocking their schedules and who is vested with claim their tokens and from there you can track all the wallet and see what the users what what your vestees are doing with your token so if they actually become users if they're mistaking it or if they are immediately selling them so you can track also the outflow of those this again enables both Founders and investors to to act on on these distributions we have a single interface to like create this contract so that CFOs and non-technical people can do it on their

own and an employee is an investor can can claim their tokens from from a single interface so you're able to track an entire portfolio of of invested tokens um very seamlessly um of course we're not the only ones there's like a bunch of tools that are being created in the industry in order to manage token life cycles so we have from the ptge tools like Carta pulley that will help you understand what you have assigned in terms of like soft and off-chain to to investors and communities then there are tools like liquefy vtvl the create the smart contracts and then you have you know analytics data tools

like necessary like nansen where you can see what is happening on chain and all the custodians and wallets and treasury managers um to help you you know block this token and detain this token and we're trying to be this layer of aggregation um that can sit on top and in between all these tools to just become a multi-chain single source of Truth and um and compost ability with with the ecosystem of of softwares that have been developed in the space um we're working again already with with the best organizations in the in the space among these there's one inch cow request a Marvel and um

so you can if you come and work with us you'll also have access to to a great collection of partners that can help with with Market making and the accounting side of things I'll stop so I can take I can take questions okay so many projects um maybe need to launch on multiple networks and if you want to release a token vested schedule multiple networks it creates a conundrum in terms of how do you where is the source how do you do it on multiple networks so that

you keep your supply your stay in control of your supply do you trust Bridges Etc is there a strategy or some thinking that you have around that very good question so what we are trying to build is a tool that is inner empty multi-chain so they will be able will enable you to control everything that is happening on different chains so yes you can reach your tokens and from that you'll be able to monitor how your token is doing on different chains having said that I don't think there is enough literature yet and enough knowledge to have a like a safe way to say like oh like do it this way or do it

the other way and as ensure success I think even the whole concept of multi-chain is is what a lot of teams are trying to solve right now so yeah yeah right now we're just live on uh on EVMS but over time we work also on on making it available across hey thanks for that um so at the end you said you also have Partnerships with market makers I wonder if you're seeing any growth and understanding in um you know market makers brief to facilitate a longer term Financial strategy for these projects using their tokens because a lot of

market makers come in and they think it's a conventional Market making gig just you know maximize profits off the spread whereas actually the needs are slightly different if you're using Market making as an accessory to capitalize on your tokens to meet longer term funding goals yeah have you seen any growth and capacity and understanding and honest actors in the space who are able to provide that that more financially oriented service yeah I think there's a lot of market makers that in very good faith that even approach projects saying that projects need more than one market maker exactly to ensure you know more stability more liquidity

and you know and avoid price bumps and long-term incentives so we like to work with the kind of people that you know are very open and transparent about about working in this way which is why everybody selected with the partners we work with having said this you know it's it's a bear Market a lot of people are trying to survive so there can be there can be surprises there so I think our advice is always trying to know who you're working with and uh yeah and actually it's have a bit of redundancy of supplier so if you have multiple market makers you you ensure you know that you have support at any point just real quick my name is Carl I'm a

head of research at six-man Ventures Fabio great job walking through the research and pointing out the different uh insights let's say from both teams so I just want to say hi if anyone has questions on the initial research that was discussed and a great job walking through it thank you card yeah maybe just to follow up directly because I would be super interested in the parametrization of the of the recommendation model So based on which um based on which kpis and the trade-offs between different goals which should then be willing to recommend different strategies of vesting strategies to the investors um you're referring to the avv model

yeah so ahim do you want to take this question maybe as you basically that is asking if we have recommendations on which kind of parameters to select in order to to correctly implement adoption adjustment investing yeah the study basically runs an example on on pricing so you can adjust your supply based on the price performance so when the price is high you you increase the supply when the price is low you decrease the supply so that you can keep the token fluctuating between like some price controls but I don't know him if you also experimented around um just speak to me after the session

and then we can discuss it because yeah it's thank you very much unfortunately we are over the time so thank you and next speaker please [Applause] you have to speak right after yes he's the speaker I would like you to set up everything foreign [Applause]