Dear LuaSwap Community,
As initially stated in the launch announcement, an additional 10% of all LUA distributions (equal to approximately 9.09% of the total LUA supply) have been set aside for the LUA Treasury. We proposed and got approved on February 1st, 2021, for a budget of 20 million LUA from the LUA Treasury to cover continued operation through October 2022.
After thorough calculations and budgeting, however, it appears that 20 million LUA or 4% of the LUA total supply are far from enough to cover all the costs for technical development, farming reward incentives for LuaSwap deployments on other blockchains, listing, market making, and funding grants, events, and other community-focused efforts, etc.
It should also be noted that the core team did not raise any funds and was not allocated any tokens. All work has been done voluntarily, and any spending on development and maintenance of the LuaSwap operation so far has been sourced from TomoChain Lab’s own fund. No LUA token has been moved from the Treasury since the budget approval.
Taking the aforementioned into account, we would like to propose a reallocation and budget of the LUA supply as follows:
(1). Approx. 9.09% of the total LUA supply will be used to fund protocol improvement and development initiatives.
The tokens in (1) are the total Treasury Fund, which receives 1 LUA every block (Apart from the amount farmed in the first 8 weeks of hyperinflation, 25 percent of which was released immediately, while the 75 percent remaining has a one-year vesting period, starting Jan 21, 2021).
(2). Approx. 31.92% of the total LUA supply will be allocated to multiple purposes, including but not limited to
- farming incentives on other chains,
- market liquidity provisions, listing.
- community and ecosystem development activities, including airdrops, bounty campaigns, among other promotional and community building campaigns;
The tokens in (2) are earned through setting up a unique pool in the Ethereum version. This pool will be rewarded 60% of the total reward, equal to 6 LUA for every block.
All the tokens mentioned in (1) and (2) are under the management of the core team, following the emission schedule of the protocol over the course of nearly 11 years (until the total supply reaches the hard cap of 500 million LUA). This schedule was designed to ensure the multi-year development of the protocol.
We strongly believe that this budget approach will benefit the protocol in the long term and look forward to your favorable consideration of our proposal.
LuaSwap core team.