[DISCUSSION] Should unsold RAD be distributed amongst LBP contributors?

On February 25th, ~3.75% of the Radicle token supply available for interested parties within the Radicle community. It used Balancer a decentralized exchange and leverages a mechanism called Liquidity Bootstrapping.

Over 1800 new token holders participated in the event, claiming over 50% of the RAD tokens put on Balancer at the beginning of the event. This event raised ~$25M in the Radicle Treasury, a smart contract controlled fully and transparently by Radicle token holders.

The proposal is to distribute all or part the remaining ~49% of tokens to the people who contributed to the LBP in proportion to their contribution or simply an equal share of 1/1800.

Early supporters of Radicle were able to become part of the community by buying the Rad token for $1.5 USD. LBP supporters paid between $10 and $30. LBP contributors support the project just as much as the early backers who were allowed to join in for just $1.5 and should be rewarded for it with a share of the unsold tokens. There are already more than enough tokens available in the treasury to be used for other purposes.

Edit: Edited title as requested

104 Likes

this is a great initiative, I am ready to vote with my tokens for this proposal :seedling:

43 Likes

Distribute remaining tokens in proportion of contribution looking fare. LBP supporters paid much more than private round and it will be fare to share remaining tokens with them as they showed big support paying a lot higher price. Up for it. And it will definitely put a community oriented tag to a project.
Also as a proof of long term supporters I am totally fine to put a vesting on a remaining part.

21 Likes

Great idea, total support

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I would support the proposal of distribution of unsold tokens to the LBP participants instead of moving back to treasury. LBP community paid a premium price to be Radicle supporters and this unsold token distribution will make them a loyal community!

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Absolutely amazing idea I definitely would vote for that!

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But I also think that part of the tokens should be distributed as locked with long vesting schedule, no need to unlock all 49%.

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@kit Could you explain how you expect the distribution to help the project?

Specifically, this distribution would likely lower the token price considerably, introducing volatility and not providing much value overall.

Do you think the community so far produced value comparable to the ~50% tokens at current valuation?

Finally, could you explain why you think the current community distribution would be more beneficial than slower release over longer time? (Which doesn’t crash the price)

4 Likes

I hold tokens.So it should be airdropped proportionally to people who bought tokens in LBP/ open market.Willing to vote with all my RAD tokens.Its also repaying trust to people who believed in project and put money where the mouth is rather than giving it away for free to people who plagiarise nodes/contests.

7 Likes

Greaaaaat Idea!!!
Matches perfectly with my thoughts!!!

3 Likes

that’s a nice touch. Good idea!

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This distribution would help the project by putting more votes into the hands of individual community members. Putting it straight back into the treasury essentially puts it under the control of the early backers as they still have most of the votes.

4% was offered in the LBP and I assume the number wasn’t arbitrary. If 2% belongs back in the treasury, then presumably 2% would have been offered in the first place. 4% seems to represent the correct amount of tokens to be liquid and in the hands of LBP contributors so that’s how it should be.

Regarding the token price, that’s speculative and also besides the point. Token price has no bearing on community based governance and again, will still remain far higher than what private supporters were able to purchase for anyway. I see a lower price as a good thing not a bad thing at this stage because it’s more democratic. Flow (Dapper Labs) allowed their community to purchase tokens at the exact same terms as the private buyers, and look at it’s price chart. You don’t know how the community will react - this proposal being successful will flag the project as one which values it’s community, something that we have seen is very important and beneficial to price growth in other community-governed platforms.

Overall I don’t have a strong preference for whether they’re distributed over time or immediately. Someone else in the thread suggested to do it with a vesting period, which is reasonable and addresses your volatility concerns. I do think they should go to LBP contributors and not back into the treasury for the reasons stated above, and based on the responses so do others.

20 Likes

Interesting idea. I have a few comments and questions.

I don’t think the comparison of early supporters buying pre-market for $1.5 should be made here. The risk was much higher a few months/years ago and there was the possibility of never launching a token. In the LBP participants decided to buy at a price they felt comfortable with while the token came to market. Its two separate risk profiles.

Whats the rationale of distributing equally 1/1800? What about the factors purchase price and amount?

Anyone who bought at the LBP has been logged on-chain as an LBP participant. In the journey of Radicle this is an important event. I could imagine a scenario where these participants are rewarded in the future. But does holding a token for a few days qualify for that? Lets discuss.

I think it would be much more interesting to consider something in the future with peers that:

a. still hold the token
b. actively participate and vote
c. use the currency to donate, register
d. run a seed node

My preference would be to couple the distribution of such large amount to added value over time.

4 Likes

While you’re correct that the risk profile was different for the $1.5 buyers, I do find it hard to empathise completely with this argument because the fact is the rest of the community didn’t have the opportunity to take on that risk even if we wanted to. I think it is somewhat reductive too - they those early backers will still get rewarded for taking on that extra risk, because distributing the rest of the tokens in the way proposed will still not take the price anywhere near $1.5.

The 1/1800 was an option in a list of suggestions, provided for simplicity. Distributing it proportionally to the amount contributed (or even amount received) works too.

Holding a token for a few days is not something worth rewarding but I haven’t suggested that this is a reward, just a better way of managing the funds than throwing them back into the treasury as opposed to into the hands of the community members who have clearly flagged their support for the project. The “reward”, if it was one, would not be for holding for a few days but for taking on the risk and for showing support despite the fact that we all knew we were purchasing at a much higher price than other people had in the past.

I can see why you would want the distribution to be related to some longer term commitments such as those listed, but I imagine it would in practice just result in kicking the can down the road, putting the tokens into the treasury and promising to use them to reward LBP contributors some time in the future but not actually getting around to it, which makes the proposal pointless.

11 Likes

In another thread, it was suggested to burn them. Why would that be better/worse?

Also, if they aren’t burned or returned to the treasury and distributed as you suggest, how are they distributed? That really needs to be fleshed out and is likely much more complex to do than “burn or return”. For instance, someone made $250k USDC in the first 5 minutes of the pool with some blockchain wizardry. Should they get rewarded for that? The whole proposal really need to answer where it would really go.

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Buyers from LBP bought at an average price of 10 times higher. This proposal is a reward accordingly.

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Could you expand on this? What’s the supporting info for “more than enough”?

If you worry about future distribution, keep in mind that the returned tokens fund usage can still be voted on with proposals. There’s nothing stopping future transfers to community which are not relying on a specific amount unused in this fundraising.

Is there some data backing this or is it an assumption?

Overall I’d hate to see this as an opportunistic “the 2% is leftover, so do something else with it”. The rules of LBP were clear and there were no comments about reusing leftover funds at the time that I could see at the time. There’s still a long road ahead and many community projects possible where they can be used as a reward for involvement.

3 Likes

I support this idea. The main purpose of LBP event is to:

  1. A public offering.
  2. Price discovery for Rad.

Distributing the rest 49% among the LBP contributors makes perfect sense for the above two reasons. The price a relative number. It is how much people willing to pay for that amount of assets (Rad tokens). The result says everything.

10 Likes

I don’t think this should be done. The proposal isn’t clear and will take a hundred posts to hammer out who will get what. It will be a bunch of bike shedding. Those that got the token, got it on their own terms. I don’t think distributing the tokens this early will do much to benefit the goal of p2p git.

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I had 3 unsuccessful attempts to buy and it was quite expensive gas, I also bought on LBP 4 times successfully in order to smooth out the average entry price in total I made 7-8 transactions with an average gas price of 150 gwei
if the community put this initiative up for voting, I would definitely vote Yes, and I will take this additional allotment as compensation for my gas costs
meanwhile, as a supporter of the long term project, I am not at all against receiving these additional tokens with a vesting period :seedling:

20 Likes