KIP-13: KWENTA Launch Distribution

Author Andrew Trudel Approved 2022-02-17

Summary

This proposal outlines a model in which the KWENTA token will be distributed to the community once launched.

Abstract

5% of KWENTA will be distributed to eligible Synth traders who have traded between Jan 1st 2020 - Feb 1st 2022 and 30% of KWENTA will be distributed to SNX stakers active during Sept 1st 2021 - Feb 1st 2022. The remainder of the KWENTA will be sent to the treasury and distributed according to the model proposed in KIP-4.

Motivation

To distribute tokens to community members that are likely to facilitate governance and leverage the token to create a sustainable system for growth.

Specification

The distribution will follow this model:

Synth traders* active within the range of Jan 1st 2020 to February 1st 2022 are eligible for 5% of the initial KWENTA supply. The minimum trade requirements are at least 5 trades and $1000 in cumulative volume on L1; or at least 10 trades and$5000 in cumulative volume on L2. These values were selected to filter sybils and provide highly active traders with a meaningful stake in KWENTA. The tokens will be distributed evenly across these members and will go into a one-year vesting contract which can be vested at any time, however, an attached fee which will begin at 80% and deplete linearly to 0% after one year will be executed when vested which burns the percentage of tokens exposed to the remaining fee, enabling short term holders to exit while decreasing the total supply.

*Note that shorting is not explicitly included in this distribution, however, to close a short with the Synthetix system, a wallet would have needed to make a Synth exchange which would be accounted for in the above distribution model.

SNX Stakers 30%

SNX stakers, on both L1 or L2, active within the range of September 1st 2021 to February 1st 2022 are eligible to receive an allotment of 30% of the initial KWENTA supply. Of which will be distributed based on these users' proportion of debt as of the snapshot on February 1st 2022 (similar to the Aelin distribution) with a floor of 5 KWENTA per each staker. Activity was determined by stakers who had at least 1 fee claim* during this time period. Dust debt ownership percentages (below 1E-7% ownership) were culled from the distribution (approximate value of SNX staked below ~\$100 at the time of writing) to reduce sybiling. All KWENTA received by stakers will go into a one-year vesting contract which can be vested at any time, however, an attached fee which will begin at 80% and deplete linearly to 0% after one year will be executed when vested which burns the percentage of tokens exposed to the remaining fee, enabling short term holders to exit while decreasing the total supply.

*Note L2 stakers with only fee claims prior to the Optimism Mainnet Regenesis on November 11th 2021 were excluded from the distribution due to incomplete fee claim data. However, those with SNX staked "pre-regenesis" and continued to claim weekly rewards "post-regenesis" are eligible for this distribution.

In the event that a Synthetix community member beleives they were incorrectly excluded from the distribution, there will be an application form open for 1 month where disputes can be submitted.

Copyright and related rights waived via CC0.