Líf Token Generation Event
We firmly believe that infrastructure projects, like Winding Tree, must be supported by the organizations and individuals that will use them. Therefore we will raise money via a token sale as opposed to funding from traditional investors.
Our TGE is the result of months of discussion between the team and advisors to find the ideal funding mechanism for fulfilling the criteria every token sale should:
- Have certainty of valuation
- Have certainty of participation
- Have a validation mechanism
- Be as decentralized as possible
- Be as efficient as possible
based on http://vitalik.ca/general/2017/06/09/sales.html
General Terms
The TGE will be organized by the Winding Tree Foundation (Switzerland) which aims to promote innovation in the travel industry by funding and promoting collaborative travel tech projects.
The Winding Tree Foundation will raise funding by issuing Líf tokens during the token generation event.
Winding Tree Foundation will transfer up to 50% of the funds to a DAO where the participants will be able to vote on updating smart contracts and other matters.
Quick Overview
- Start date: November 1, 2017
- Duration: 2 weeks, until November 15
- Token distribution: 75% public sale, 20% founders, advisors, employee pool, etc. 5% WT Foundation.
- Price: 10–9 LIF/ETH
- Number of tokens generated: decided by the market
- Token availability: Líf will be available to transfer right after the TGE ends.
- Maximum funds initially received by Foundation: $10M
- The excess of funds (>$10M) will be put into a Market Validation Mechanism (MVM) that will allow TGE participants to withdraw a part of their contribution any time by sending their lífs to the MVM
- MVM will be distributing its funds to the Foundation on a monthly basis, according to the schedule below
- Crypto-assets will be held in a multi signature wallet controlled by the foundation council
- A part of the received funds will be converted to other crypto-assets and fiat
Token Distribution
Decentralized projects require a fair token distribution model, our goal is to avoid the problem most projects have had in the past, i.e. the problem of centralization (“central banking problem” per Vitalik Buterin). Our solution to this problem is to not limit the amount of generated tokens (and therefore funds raised), but limit the amount of funding that the Foundation will receive after the sale to $10M (see the table below).
The foundation and founders will also receive a certain number of tokens that will represent to 25% of all issued tokens. For example if 75 lífs were generated, the foundation would issue 25 more lífs to distribute amongst the Winding Tree Foundation, founders, advisors and employees.
Distribution Timeline
- The Winding Tree Foundation will issue tokens to the presale participants and publish all transactions in a public document to ensure full transparency in the process.
- TGE begins, anyone can start buying tokens receiving them straight away, but they cant use it yet.
- TGE finishes, the crowdsale contract issues the 25% of tokens which will be distributed among founders, advisers and early employees. The token distribution at the end will look as follows:
12.8% of the tokens will be sent to a contract with a vested payment schedule of 4 years with a 1 year cliff, these tokens will be claimed by the founders.
5% of the tokens are sent to a contract with a vested payment schedule over the same duration as the MVM, that will start once the MVM finish, with no cliff. This tokens can be claimed by the foundation.
The remaining 7.2 % goes directly t the foundation wallet, these tokens will be used to pay advisors and future hires.
Market Validation Mechanism (MVM)
The MVM is designed to provide validation to the project. The MVM smart contract has a few simple rules:
- It is completely autonomous (no one can change it)
- It holds the ETH generated by the TGE, in excess of $10M
- It will be allocating a certain amount of funds to the foundation on a monthly basis
- It buys lífs back and burns them instantly
- The buy price change every month
- The buy price is calculated dividing the total supply of the token by the MVM balance.
The foundation will be constantly receiving funds from the MVM smart contract. If the Winding Tree marketplace is not successful, the token price will fall below the MVM price and everyone will be able to recover partially their contributions by sending Líf to the MVM, thus draining the smart contract.
The project success will be determined by the amount of tokens burned in the MVM, the less tokens burned the higher the success.
The lifespan of the MVM depends on the starting amount of funds in the contract. If the received more than $40M, it will have a 4-year lifespan, otherwise it will be a 2-year lifespan.
As you can see, the price function and the amount of funding that the foundation will be receiving every month have a direct relationship. Please also note that the shape of the price function is a negative exponential, i.e. we minimize the risk for contributors in the beginning of the project.
Winding Tree after the MVM
Once the MVM finishes, the foundation wont have any more income from it but the a vesting schedule for the initial 5% of tokens sold on the TGE will start, the duration of it will be the same as the MVM, the foundation will be receiving tokens every month, we will share how we planned to to use it on our next post, stay tunned.
