Liquidswap LSD token: Utility, Allocations & Airdrop

This post introduces the Liquidswap DAO (LSD) token, providing an overview of the governance token utility, initial allocations, and airdrop. Details regarding the token listing date, exchanges, and airdrop qualifications will be shared in separate posts prior to the token generation event.

TL;DR

- Liquidswap DAO (LSD) Token is coming soon.

- Total community allocation: 40% with community growth emissions

- 15% for airdrop and staking incentives

- Token can be staked in vote escrow (ve) for utility + rewards

Liquidswap DAO (LSD) Token Utility

Liquidswap, developed by Pontem, a product studio backed by Lightspeed, Faction, Pantera and various other well known VCs, is the #1 AMM on Aptos by trading volume and users. Liquidswap takes advantage of the unique Move language to provide best in class performance and speed for trading digital assets peer to peer.

As Aptos and the broader Move ecosystem continues to grow and acquire users, Liquidswap is positioned to be a key part of the emerging decentralized economy running on blockchains. As software eats the world of finance through the adoption of RWAs and crypto native assets, users, protocols and token issuers will need trustless infrastructure for end users to trade.

Over the last 2 years, Liquidswap has achieved:

• Over $1.3 billion in cumulative trading volume, making it the most used application on Aptos
• $60M all time high TVL, maintaining sufficient liquidity for achieving the best prices for on chain swaps and protocol liquidations
• 14 million total swaps across 1.1 million unique addresses

Since launch, Liquidswap has served as the backbone of decentralized financial infrastructure for Aptos. As the protocol reaches critical mass in adoption and continues to grow and expand, it is ready for further decentralization through the launch of the Liquidswap DAO and its corresponding governance token: LSD.

The LSD token enables community ownership of the Liquidswap protocol for continued growth and self sustainability.

LSD’s utility will be to govern:

• Protocol parameters
• Community treasury
• Future developments

veLSD

Staking through voting escrow (ve) is being considered for testing as an enshrined mechanism of the Liquidswap protocol. More details on the staking contracts will be shared in a separate post. This novel mechanism can drive community participation but given the untested nature and potential unprecedented attack vectors, it will be rolled out in phases that protect the overall integrity of the protocol including DAO governance.

The key components of Voting Escrow (VE) can include:

Token Locking:

• Users lock their tokens (e.g., CRV in Curve, VLO in Velodrome) for a predetermined period, typically ranging from weeks to several years.
• The longer the lock-up period, the more voting power and benefits the user receives.

Voting Power:

• Voting power is proportional to the amount and duration of tokens locked. For instance, locking tokens for four years might give maximum voting power, while locking for one year gives proportionally less.

Boosted Rewards:

• Boosted rewards incentivize locking tokens by offering boosted rewards to veToken holders. For example, liquidity providers on Curve can receive higher yields if they hold veCRV.

Fee Sharing:

• A portion of the protocol fees can be distributed to veToken holders. This creates a direct financial incentive for participants to lock their tokens and engage in governance.

LSD Allocations

42 million LSD will be minted at genesis and become accessible over 3 years. The DAO can also set emissions for economic growth. The initial allocations are as follows:

40% to community:

• 15% to airdrop + staking incentives; 5% of the total token supply with 69% liquid at the token generation event (TGE) and the rest vested linearly over 4 months released monthly. Another 10% will be available over time in staking rewards and future airdrops.
• 5% for initial retroactive airdrop.
• 2% for testing ve staking incentives.
• 8% DAO controlled for future airdrops and staking incentives.
• 16% to treasury vested over 36 months. This allocation will be used for ecosystem grants, strategic partnerships, governance initiatives and additional incentives and other programs.
• 8% for exchange liquidity. This allocation will be used for centralized and decentralized exchange listings. It will be managed with professional market makers for distribution.
• 1% for Initial Exchange Offering (IEO). 40% liquid at TGE, vested over 3 months.
• The LSD Initial Exchange Offering (IEO) will be set at a lower valuation than the last fundraise round in order to give the community a fair entry point compared to private investors.
• Any emissions set for the token will go in the treasury for distribution to the community.

25.25% to 2021 private investors. 21.49% to 2023 private investors:

• Private investors have a 1 year cliff with 2 years total vesting. This allocation recognizes the investors’ contribution over the last 3+ years through challenging market conditions and reflects their role as an integral part of the community and a key to the protocol’s long-term success.
• The founding team allocation will be 13.26%, with 1 year cliff with 3 years total vesting to ensure sufficient skin in the game for their continued contributions.

LSD Airdrop

Early adopters of the Liquidswap protocol will be airdropped tokens retroactively for being part of the community and using the product. A detailed breakdown of the airdrop model will be shared prior to the launch of the token.

*Note that the snapshot date has already passed, so no future activity will be taken into account for the first airdrop.

The following parameters will be taken into for the airdrop account:

Added Liquidity with respect for time

• Trading Volumes (*Not currently with respect to trading fees)
• Holding the community meme tokens $DooDoo and $RETURD
• Owning Pontem Community NFTs: Pontem Space Pirates, Dark Ages NFT, DooDoos OG NFT
• Activity from referrals

The parameters above are not final and may change before the final airdrop. Let us know what other parameters you’d like to be considered in the calculations.

Legal

THIS IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO PURCHASE ANY LSD, AND IS NOT AN OFFERING, ADVERTISEMENT, SOLICITATION, CONFIRMATION, STATEMENT OR ANY FINANCIAL PROMOTION THAT CAN BE CONSTRUED AS AN INVITATION OR INDUCEMENT TO ENGAGE IN ANY INVESTMENT ACTIVITY OR SIMILAR. YOU SHOULD NOT RELY ON THE CONTENT HEREIN FOR ADVICE OF ANY KIND, INCLUDING LEGAL, INVESTMENT, FINANCIAL, TAX, OR OTHER PROFESSIONAL ADVICE, AND SUCH CONTENT IS NOT A SUBSTITUTE FOR ADVICE FROM A QUALIFIED PROFESSIONAL.

THIS DOCUMENT CONTAINS HYPOTHETICAL, FORWARD-LOOKING, AND/OR PROJECTED FIGURES, WHICH ARE NOT GUARANTEED AND ARE SUBJECT TO CHANGE; ACTUAL NUMBERS MAY VARY. PONTEM AND ITS SUBSIDIARIES MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE COMPLETENESS, RELIABILITY, VALIDITY, OR ACCURACY OF THIS INFORMATION. THE CONTENT HEREIN IS NOT ERROR-FREE AND MAY CONTAIN INCORRECT INFORMATION. YOU AGREE AND ACKNOWLEDGE THAT ANY INFORMATION CONTAINED HEREIN IS SUBJECT TO CHANGE WITHOUT NOTICE. NO ADVICE OR INFORMATION, WHETHER ORAL OR WRITTEN, OBTAINED FROM PONTEM, WILL BE CONSTRUED TO CREATE ANY WARRANTY OR REPRESENTATION NOT EXPRESSLY MADE HEREIN.