ShineDAO Tokenomics 2.0

ShineDAO is on a mission to create a self-govern tokenized community of early adopters funding and supporting the most promising Web3 and DeFi innovators.

The Tokenomics 2.0 was designed to encode incentivized relationships we’ve been exploring and align interests between projects, supporters, and contributors while sustainably growing the treasury and SHN token price.

TL;DR

Supporters buy and stake SHN to get access to the SEED deals and veSHN weighted distribution of fees from SEED, treasury yield, and vested project tokens from SWAP. veSHN is also a nontransferable governance token. Supporters will be approving projects for SEED or SWAP, controlling distribution parameters and assets in treasury.

Project

The projects can choose between SEED and SWAP (or a combination of both).

SEED

SEED allows Web3 and DeFi projects to request funding support for their projects from ShineDAO supporters. Tokens are being distributed to supporters over a vesting period, to align incentives long-term. Besides capital, projects can expect feedback, advice, and ideas from their supporters.

SWAP

SWAP allows Web3 and DeFi projects to get execution support from the talent & advisor pool. To incentivize individuals in the pool, they can request a swap for their project tokens with SHN. To ensure long-term alignment, project tokens will be vested to the veSHN holders and expand the DAO treasury.

Supporters

Supporters are buying SHN tokens and staking them with a time lock to get veSHN (see veSHN section).

Monetary benefits

veSHN gives the Supporters the following monetary benefits:

  1. Fees from SEED

  2. Vested project tokens from SWAP

  3. Treasury yield

APR Calculations (model)

To play around with numbers, please access the calculator here and duplicate the page.

Governance

Additionally to the monetary benefits, supporters are given governance rights, controlling:

  1. Accepting projects for SEED

  2. Accepting projects for SWAP

  3. Distribution parameters

  4. Assets in treasury

Contributors

Anyone can become a contributor by completing the onboarding and start contributing to open quests and bounties. We’ve been working with the https://daoexchange.app/ team to offer quests directly in Discord and visualize them in a dashboard. ShineDAO guild will be creating quests for ShineDAO initiatives, while project founders will be in charge of creating their own quests for their own projects.

Talent & Advisor pool

To ensure high quality, every individual in the talent pool will be screened. They either need to present extraordinary achievements from the past positions or prove themselves by contributing to ShineDAO on a trial.

veSHN

The longer supporters lock $SHN, the more $veSHN they receive. We can also get an additional $veSHN by locking more $SHN or extending the lock period (min. 7 days & max. 4 years). $veSHN decays slowly over the locking period, eventually reaching 1-1 with locked $SHN. Supporters are incentivized to stake $SHN for a longer period, to get deal access at discount (up to 75% with a 4-year lock), higher governance power & revenue.


1 $SHN + 4-year lock = 4 $veSHN, decaying to 1 $SHN

This mechanic is pioneered by Curve with their veCRV and is known as the best practice for vested skin in the game. You can find more about veSHN in this discussion: veSHN.

Buyback Mechanism

The goal of buybacks is to use fundraising fees and treasury yield to reflect the performance of the community and directly reward its token holders. This is not only creating enough buy pressure to offset potential contributors’ selloffs but also creating a strong incentive to rather hold and stake SHN to get veSHN and its additional benefits. The % of fundraising fees and treasury yield being used for buybacks will be governed by veSHN holders.

Treasury

Treasury is generating returns by having its assets fully deployed and utilized through yield farming. SHN in treasury will grow in value due to buy pressure from the buyback mechanism, the inflow of new supporters looking to get into SEED, or supporters looking to benefit from SWAP. 50% of tokens in SWAP will be vested to the treasury directly. veSHN holders have governance over all assets in treasury.

1 Like

I like this proposal and especially enjoy the attempt to internalize our learnings to further develop the models we have. Huge thanks to everyone involved!

I have a question regarding the SWAP function. If a project wants our support to perform a certain task, then they will send THEIR token to our SWAP contract (50% to veSHN hodlers and 50% to Treasury) and we will then use SHINE tokens to incentivise our contributors to do the task for the project. Have I understood it correctly?

1 Like

Exactly. The assumptions taken into account:

  • Contributors are more willing to contribute if the reward they are receiving has liquidity on the market (and a lot of projects in our deal flow don’t have liquidity or a token).
  • Supporters would be more willing to stake SHN, if they can keep receiving all the future tokens from SWAP projects.

Important note: veSHN holders approve SWAP only if they believe (speculate) that the future value of the token will be higher than the SHN value required for contributors.