An update to ROUTE tokenomics: Extending vesting timeframe by 4x across key categories
We are pleased to announce that we have introduced significant updates to the $ROUTE tokenomics. These upgrades are part of our plan to prepare for the next leg of Router Protocol’s growth cycle after the upcoming launch of the Router mainnet(Jan 27th). This is an essential step that gives Router much needed runway as it executes on its roadmap, including Router v2. Router v2 architecture and development are already underway and more details shall be released after the mainnet launch of Router v1.
We devised our token distribution to be as fair as possible for all of the system’s stakeholders without sacrificing the resources and the flexibility we needed. Additionally, the old tokenomics were designed in Dec 2020, which is ancient history in DeFi terms. We believe that the updated tokenomics better reflects current realities, and aligns closer to Router’s long term vision and strategy.
We are thankful to everyone in the broad Router community in this journey so far, and hope we will continue to have your support in the critical months ahead. We are especially thankful to our early investors and advisors, for aligning with us on this critical step of extending the token vesting by a significant amount of time.
What’s new with $ROUTE
There will be no changes to the total supply of $ROUTE, nor the overall allocation to each tokenomics category. However, we have introduced elongated vestings across most categories.
The only category whose vesting schedule remained the same was the private sales — the sales were part of the fundraising process for Router Protocol and most of the token distribution across the category is already concluded.
The biggest change in the vesting schedule was made to the allocation made to the Router team. The team is in it for the long haul and have agreed to significantly increase their vesting period. Originally, 10% of the supply allocated to the team was supposed to be unlocked 9 months following the $ROUTE TGE. The rest of the supply would have been released monthly for a period of 12 months.
As of 2022, 10% will be unlocked 9 months following the TGE, and the remaining allocation will be distributed monthly over the following 48 months. The entire vesting period has been increased to nearly five years from TGE, as compared to the original 21 months from TGE. This represents a 4x increase in the vesting period for the 90% of team tokens and ensures that team incentives are aligned for the long term.
Ensuring a fair and stable reward distribution for those staking in the Router ecosystem is a top priority. The reward pool, holding 17.22% of the total supply, was supposed to have only 0.92% of the tokens unlocked on day 0, with the rest distributed according to reward programs for the following 12 months.
The reward pool supply remained the same, but the reward pool vesting schedule increased threefold. This means that $ROUTE tokens allocated to the reward pool will be distributed over a period of three years. Router Protocol will now have a long-term reward pool that will be able to incentivize users to engage with the protocol long after its mainnet goes live.
Originally, 8% of the supply allocated to the ecosystem fund was supposed to be unlocked on day zero. Following the initial distribution, 7% of the tokens were to be unlocked after three months, after which they would have seen 5% unlocked every month for 17 months.
The updated tokenomics changes this significantly. Instead of 17 months, 85% of the allocation that remains after the third month will be distributed over the following 60 months.
We understand the value of monetary incentives and want to ensure projects and developers looking to build on Router will be incentivized to do so in the coming years.
As part of Router’s strategic growth round, a small portion of the foundation was allocated to leading Tier-1 investors. A majority of the foundation will remain in cold storage for future strategic raises and purposes.
With the new vesting there is an 18-month cliff in the vesting of foundation block from TGE and the remaining tokens will be distributed over the next 39 months or beyond as per the fundraise or other strategic requirements.
Partners and Advisors
Router’s partners and advisors have been a tremendous source of strength and support, and they have agreed to a long-term vesting schedule like that of the team to ensure the long-term success of the project.
From the Partnership & Advisors fund — 10% was unlocked on TGE, and then 10% each after two quarters. Remaining 70% of the tokens will be distributed over the next 4 years.
Liquidity Provision Fund
Our goal with the liquidity fund was to create a pool to support various necessary market making and listing related activities. To a large extent, this has achieved it;s purpose. Additionally, we have a couple of the larger listings yet to happen in the pipeline, Therefore the liquidity provision fund vesting terms will continue to be as it is currently.
The fund received 1.75% of $ROUTE’s total supply, with 22.86% of the 80,000 tokens unlocked on day 0. The remaining 270,000 tokens will be unlocked quarterly for the next 12 months.
Tokens allocated to a consortium of early investors were not subject to any changes in this update. The bulk of the distribution associated with this round is already done.
Investors in both of Router’s private rounds were not subject to any vesting changes. Entire distribution of both the private rounds has already concluded.
About Router Protocol
Router Protocol is building a suite of cross-chain liquidity infra primitives that aims to seamlessly provide bridging infrastructure between current and emerging Layer 1 and Layer 2 blockchain solutions.
Telegram announcements: https://t.me/router_ann