Enconomics

ENCOINS
3 min readSep 18, 2023

A new proposal has been approved by Encoins DAO with 100% of the votes in favor. It includes changes in DAO treasury allocation and Protocol fee distribution in ADA. Prior to our imminent launch on mainnet we wanted to make public this incentive scheme to validate the encoins subledger.

Encoins Treasury breakdown and funds allocation

$ENCS has a fixed supply of 15 million tokens with six decimal digit precision. The entire supply is already in circulation. In the beginning, 9,902,455 were distributed between project supporters as ISPO rewards, 2 million were given to the original development team, and 2,967,545 were sent to the treasury (Handle $encs_treasury). 130,000 were given away during our decentralized minting and distribution event as incentives for people running distributor app nodes.

These have been the expenses that the DAO has approved so far:

Original amount: 2,967,545

Minswap Liquidity: — 50,000

Minswap Farming: — 50,000

VyFi Proposal: -100.000

Audit with Anastasia Labs: — 250,000 (locked in a two years vesting contract)

Team — 1,000,000 (40 months vesting multisign wallet)

The Current Treasury Balance is 1,517,545 $ENCS and 12,185,739,522 LP Tokens.

Treasury management and governance

Taking up what was stated in our medium article published in early February and considering the valuable feedback of our community to increase our liquidity, the following has been modified to the treasury allocation:

  • 250,000 $ENCS for future audits of Encoins (V2) and others (same total amount regarding the first proposal, as we already spent 250,000 in Anastasia Labs)
  • 250,000 $ENCS for the “bug bounty program” (50% reduction)
  • Decrease $ENCS allocated to the Team from 25,000 per epoch (1.5M total) to 25,000 per month (1M total). Transfer tokens to a multi-signature team wallet, which will start being used once the protocol is live on the mainnet.
  • 650,000 $ENCS will be available to incentivize liquidity provision. This will be voted on by another specific proposal.
  • 367,545 $ENCS as an additional treasury reserve.

Sustainable project development

This is a mechanism by which the protocol, once in Mainnet and with genuine activity and TVL, ensures the proper functioning and financing in the long term for all parties involved. We proposed the following distribution, reducing the ADA fees collected by the team from 33% of the total protocol fees to 0%. Thus, the distribution of the fees will be as follows:

  • 80% to relayers
  • 20% to the DAO treasury reserve
  • That $ADA that goes to the DAO could be used in any way, through DAO voting, of course. While on the initial document, the team received 33% of the total protocol fees, we propose a different solution based on the possibilities Encoins TVL has: to direct the staking rewards on the $ADA in the protocol to the team’s multi-signature wallet to be used as additional incentives for the team.

Conclusion

Thanks to all our community who have joined us in this incredible journey. Together we will make Encoins the Cardano privacy standard.

For more information on ENCOINS:

Website | Twitter | Discord | Github

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