60% of Opium tokens will be allocated to active users, gradually unlocked according to the specified active usage criteria, and distributed to active community members retrospectively.
Original title: ” New DeFi gameplay丨The most effective governance model? An article to understand the token economics of the on-chain derivatives protocol Opium “
Written by: Opium
Compilation: Kyle
OPIUM is a governance token that can be obtained by actively participating in the Opium protocol ecosystem.
Opium governance
The Opium team believes that decentralized governance supervised by an active stakeholder community can provide the most sustainable and fragile support foundation for open financial infrastructure (decentralized financial DeFi). Standing on the shoulders of earlier pioneers and innovators, the Opium team has learned a new method and model for managing financial agreements and gradually decentralizing control.
We propose a governance model using OPIUM, and describe the model and concepts of the governance token economics below.
OPIUM governance token
The Opium agreement requires active and decentralized governance of certain parameters, and the agreement is developed to benefit the community. In turn, this will promote the creation of relevant decentralized derivative contracts with sufficient liquidity, which will eventually attract more users to use the Opium ecosystem.
This governance model is based on the Decentralized Autonomous Organization (DAO). OPIUM token holders will interact with the DAO by making recommendations and voting on governance proposals, which will affect the behavior of the Opium protocol and its stakeholders.
One of the key parameters that OPIUM token holders will control is the distribution of OPIUM governance tokens from the active user fund. A certain amount of OPIUM will be unlocked every week to be distributed among active protocol users and benefit from the Opium ecosystem.
This is the most effective way to hand over the agreement to the community and the best people in the community. The liquidity mining program aims to incentivize bottleneck processes in the ecosystem to stimulate weak links (existing in every ecosystem).
Active users will inspire these weaknesses (for example, if everyone holds a short position, then active users of liquid mining will hold a long position, thereby eliminating the weakness and doing hard work). Therefore, those who work hard will have more OPIUM tokens, which will have a greater impact on protocol management.
This mechanism is similar to the concept of “liquid mining”, but can provide greater flexibility through active user definition. The following example behaviors can be achieved through this mechanism:
- Provide order book liquidity for the derivatives market
- Write CDS and options
- Increase the total value locked in the Opium agreement
- Design relevant (high demand) financial derivatives on Opium
- Incentivize liquidity providers to participate in third-party fund pools/projects useful to the Opium ecosystem (for example, derivatives as collateral, with OPIUM’s Balancer fund pool)
OPIUM token holders will vote on proposals to determine liquidity mining logic and governance token distribution. Token holders can not only change the parameters, but can also change the entire agreement, because OPIUM tokens can give active users full control of the agreement.
Opium’s governance model will initially be limited to proposing and voting on the following changes and actions:
- Change DAO parameters within its authority,
- Perform actions on its behalf,
- Allocate active user funds, and
- Change the Opium protocol code base.
The governance of any new parameters caused by the upgrade of the Opium protocol code base will also be controlled by Opium DAO.
How will OPIUM be distributed
OPIUM’s casting supply is 100,000,000. The distribution of this supply is expected to be as follows:
60%: active users
As mentioned in the previous chapter, this funding will be used to allocate governance to active users of the protocol to benefit the Opium ecosystem. The definition of active users will be determined periodically by governance. More tokens can be allocated for specific operations, such as providing liquidity on specified instruments or deadlines, establishing actively used instruments or other basic activities. The tokens in this fund will be gradually unlocked according to the specified active usage criteria and distributed to active community members retrospectively.
16%: investors and advisors
The fund will be used to compensate early investors and advisers for their contributions to Opium’s success to date. These tokens will continue to be released for the next two years.
14%: Opium team
The funds will be used to fund the expenses of the founding team behind the Opium agreement, as well as to provide funds for the future development of key employees and teams. Part of these tokens will be awarded to existing members of the Opium team and will be released continuously for the next four years. The Opium team is a fast-growing distributed community of creators, including developers, mathematicians, traders and consultants dedicated to further developing and growing the Opium ecosystem.
10%: governance reserve
The funds will be used for external programs and partnerships, which will help the Opium ecosystem to further develop and prosper. By managing proposals and voting, OPIUM token holders have full control over the use of the funds.
Important information disclosure: OPIUM tokens are not financial instruments or securities. They are just a tool that will help us and the community build the foundation of a derivatives trading ecosystem, which will be permissionless and decentralized.
Source link: medium.com
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