Current MCB issuance summary
Upon Jan 12th, 2021, 2,016,096 MCB has been issued, among which:
- 1 million MCB belongs to the team and investors:
- Dev Team: 510K
- Angel investor: 170K
- Private token sale: 320K, Price 2.5USD/MCB
- 996,955 MCB belongs to Liquidity providers
- 19,141 MCB belongs to community contributors
- The already issued MCB will keep circulating, but the total amount will reduce from 100 million to 10 million.
- MCDEX DAO will be responsible for the specific usage of the newly issued MCB (refer to Mai 3 Protocol)
- The speed of issuance will be under following restrictions:
a) It is plausible to issue 1 MCB for 1 USD captured by the MCDEX DAO vault
b) At least 0.2 MCB can be issued by one Ethereum block (approximately 1300MCB/day)
- For every new issuance, 25% of it belongs to the team, and 75% is for community incentive.
Highlights of the new tokenomics
As stated in the Mai3 protocol: MCB is the governance token of MCDEX DAO. MCDEX DAO continuously captures value in the MCDEX ecosystem, and MCB holders can participate in the governance of DAO vault. In MCDEX V3, MCDEX DAO will charge 0.015% of the trading volume as vault fee, and this would be the major source of the value captured by the MCDEX DAO vault.
The new tokenomics tries to balance between “to issue more MCB as incentive” and “to protect existing holders“. On one hand, we need to issue more MCB as community incentive, especially liquidity incentive. We profoundly understand that liquidity is essential for MCDEX, and liquidity mining is the best way to obtain liquidity at an early stage and to bootstrap the platform. On the other hand, to issue more MCB will dilute the share of current MCB holders, especially when MCB is not yet good at value capture at the early stage.
The new MCB tokenomics tries to approach the abovementioned concerns:
- Reduce the total supply from 100 million to ten million. The action of issuing more MCB to incentivize liquidity should only take place during the early stage to bootstrap the platform. As the platform itself enters a virtuous cycle/positive feedback loop, MCDEX DAO will continue to capture value. At this point the value captured by DAO is a sufficient income for liquidity incentive and other community incentive. Taking into account that 2,016,096 MCB has already been issued, and an additional 7,983,904 can be issued in the new tokenomics. Among them, 75% (5,987,928 MCB) can be used for early-stage incentive, which should be large enough for bootstrap. On the other hand, to reduce the total supply will lower the diluting effect for current MCB holders, protecting their profit.
- In the new tokenomics, the issuance speed of MCB is correlated to the accumulated value captured by DAO. So as to say, 1 MCB can be issued for every 1 USD captured. There are two advantages of this method: To prevent a hyper issuance speed when the value capturing ability of DAO is relatively weak. As DAO captures more value, new MCB will be gradually issued. Furthermore, when the value capture ability of MCB improves, the issuance speed could potentially be increased for ecosystem incentive. Since the value capture ability of MCB is strong enough at this point, to increase the issuance speed to a certain extent will no longer have a huge impact on the token price, protecting holder’s profit.
- The minimum speed is 0.2 MCB per block (approximately 1300 per day). When the value capture ability of MCB is not strong enough, 1300 per day fulfills the need for the basic liquidity incentive. If we hypothesize that the annual cost of liquidity is 10%, the token price of MCB is $3, and 75% of the newly issued MCB is used for liquidity mining, then the available liquidity would be approximately $10M. In the AMM design of Mai3, $10M is a great start. Moreover, this speed corresponds to a 22% annual inflation rate, and this rate decreases gradually. This is an inflation rate at average level, which should be acceptable for MCB holders.
- The developers will obtain 25% of the newly issued MCB. While covering the fundamental rights of the developers is protected, this share serves as an incentive for developers to maintain and develop the MCDEX ecosystem. In additional, since MCDEX DAO has complete managing authority over MCB, MCDEX DAO is able to cancel this share through on-chain governance if the developers are incapable of maintaining and developing the MCDEX ecosystem in the future.
Execution of the Proposal
Once this proposal has been approved, the team will execute the following operations:
- Burn all MCB held by MCDEX Foundation (24,990,859 MCB)
- Burn all MCB locked in the team vesting smart contract (24,000,000 MCB)
- Deploy MCDEX DAO smart contract and transfer the MCB’s admin privileges to MCDEX DAO.
- The MCDEX DAO smart contract will limit the issuance speed and amount of MCB based on the new tokenomics. In addition, every new issuance requires on-chain governance by MCDEX DAO.
Due to the fact that this proposal involves significant changes to the MCB tokenomics, we would like it to be fully discussed by the community members to reach maximum consensus. Therefore, the discussion of this proposal will last around 2 weeks, and the voting quorum is 1 million MCB (about 50% of the current supply).
Holders who have MCB, MCB/ETH LP Token or MCB/USDC LP Token please vote on Proposal 19: MCB New Tokenomics
Voting time: Jan. 22th 12:00 UTC ~ Jan. 29th 12:00 UTC