Governance, Utility, and the PAD Token
So, you have your tokens, what next?
For most crypto communities, acquiring the token is nearly always signals the end of the honeymoon and the beginning of picking up dirty underwear, toilet seat left up, toothpaste lid missing, and waking up shivering in the middle of the night because the other side was hogging it.
Sooner or later, something’s got to give.
The Morning After
After the sensual delight of the night, fueled by some of the finest FOMO known to man and pillow talks about celestial real estate, comes the harsh light of morning and the question of how this token wound up in your wallet. In retrospect, maybe it was due to the lighting. However, this could all have been avoided if they had gotten to know each other first.
With $PAD token, our design philosophy is based on creating cyclic mechanisms for token utility rather than slapping a title on it and calling it a day. Broadly speaking, token holders will be able to:
- Earn Protocol Fees
Stake: To participate in the Token Distribution Event (TDE) for any project launching on NearPad, users have to stake $PAD tokens in any of the five pools to be eligible. The first time users stake their token into any pool, the token will be locked for 21 days before the user can unstake the asset. However, every time they participate in a TDE, their lockup is extended by a week.
In our roadmap article, we proposed a three-tier staking model with a base minimum of 1000 $PAD tokens staked and a maximum of 10,000 $PAD. However, in light of the recent feedback we’ve received from the community backed by our own research and modelling, we have decided to revise the model into a five-tier system as follows:
- The entry-tier is pegged to 1,000 $PAD with a multiplier of 1
- The second tier starts t 5,000 $PAD with a multiplier of 1.375
- The third tier starts at 25,000 $PAD with a 1.75 multiplier
- The fourth tier has a 75,000$PAD requirement and a 2.125 multiplier
- The final tier is capped at 150,000 $PAD and possess a 2.5 multiplier
As previously stated, the DAO will be able to change this model or propose entirely new models through the governance module.
Governing the Protocol: While governance has been one of the emergent narratives for DeFi, most implementation remains perfunctory when it comes to community participation, relegating them to pushing buttons that rarely have any impact at the protocol level. Of course, when you’re dealing with immutable data, you have to measure risk differently — there’s no CTRL + Z button anywhere. That being said, we believe the crypto community has matured to a stage where there is merit in the wisdom of the crowd. This belief is further bolstered by how the community has contributed to shaping Yearn and Sushiswap’s ecosystem.
Governance will not be limited to protocol changes only. NearPad community will also play an active role in the pitching, screening, and voting of projects simply by staking their tokens to their preferred projects. Rather than depending on the good ol’ boys’ network, developers will be able to pitch their projects forward for launchpad reviewing by staking $PAD tokens to project proposals for the community to vote on.
Projects looking to pitch to the community are required to minimally provide information so the core team and the community can do proper due diligence. We will be publishing an initial proposal to get started with and will tailor this based on community feedback.
The $PAD tokens are capturing value based on the following mechanics:
- Launchpad: The launchpad will have a 0,5% fee collected in stable coins. This will be converted to $PAD and burned;
- Yield Aggregator (soon): The second product which will be developed is a yield aggregator for farmers, a bit similar to the concept of Autofarm on BSC. The protocol will charge a certain fee (to be decided by governance) for the increased yields. This fee will be used to buyback $PAD and burn;
- DEX Aggregator (soon): A fee will be charged based on swaps made. This fee will be used to buyback $PAD tokens and burn them;
- Future products: The $PAD token will be integrated in any future product and will bring value to the protocol (treasury or burn mechanic).
$PAD’s supply is capped at 150,000,000 tokens distributed as follows:
The utilization of the treasury funds will be influenced by the community through the DAO.
And now that you’ve gotten to know your token better, what’s next?
Tune in next week