$BLEND Tokenomics
Blend Protocol provides a user-friendly platform for simple access to advanced strategies in order to maximize your money’s potential. The upcoming $BLEND token plays a pivotal role in bootstrapping and facilitating the relationship among all stakeholders in our innovative on-chain ecosystem. As Blend Protocol gains popularity, the token’s value grows with increased liquidity, rewarding $BLEND stakers for their contribution to the ecosystem. Get ready to learn more about the potential of Blend Protocol.
1 staked $BLEND = a share of fees from all Blend strategies as a reward for securing the chain
Why a $BLEND Token?
The token plays a vital role in coordinating DeFi strategy innovation on a larger scale. When expanding the utility of the $BLEND token, we emphasized the need for it to be more than just a stakeable token. $BLEND establishes a sustainable cash flow for the community fund and empowers a democratic governance system, enabling community members, strategists, (infrastructure) runners, and builders to work together for better outcomes. So, through $BLEND, we drive deterministic value back to the ecosystem, rewarding all stakeholders for their work and aligning incentives for all contributors. Additionally, we’ll be applying to support the security of the (Kujira) ecosystem by having $BLEND as an Alliance asset.
Value Accrual
In the Tokenomics flowchart below, you can see how the token is leveraged in the Blend ecosystem. The strategies from the community, various protocols and core contributor generate fees that flow to the Blend Treasury, runners, strategists, and $BLEND stakers. These accrued fees are used in different ways, namely to fund builders to build new strategies, have runners maintain the infrastructure, reward strategists for their strategy design, and reward stakers for their non-passive work staking and voting in governance. This flow incentivizes and fosters the creation of new strategies, resulting in additional fee generation. A future feature of Blend Protocol is the implementation of $BLEND as an Alliance asset to help secure the blockchain and earn additional staking rewards.
Well performing strategies with good TVL → More fees → More funding for building additional strategies.
Benefits
- Staker: actively support the ecosystem through work to earn a portion of the protocol real yield & secure the chain through Alliance.
- Strategist: actively design, propose, and receive performance fees from their successful work creating and maintaining strategies.
- Runner: actively run a node for strategies to earn fees by maintaining infrastructure.
- Builder: actively build strategies using Treasury funding to earn $BLEND tokens
How Strategies Work
Our aim is to empower anyone to design and propose strategies for development. This grants users the ability to craft advanced and innovative yield strategies that were previously unheard of, or not feasible, due to a lack of development skills. Users can now leverage the capabilities of Blend Protocol to bring strategies to life!
At launch, we provide pre-configured strategies developed by the Core Contributors. As time progress we will open the process up to the wider community and introduce features for submitting strategy designs. In order to submit a proposed strategy, a deposit in $BLEND will be required to prevent the spamming of strategies. The strategist must include specific details on their implementation, which could be in the form of a Medium article or some other accessible documentation. Additionally, the strategist should outline how they would distribute the fees among themselves, the runners, $BLEND stakers, and the Blend Treasury. We introduce cycles of 6–8 weeks for strategies to be proposed, voted, built and deployed. In the final week, strategy details will be locked and moved to on-chain voting with the market deciding the best strategy to build next.
The required input currency for deposit in a strategy depends on its design. Some strategies may require stablecoins like $USK or $USDC, but others can support assets like $ATOM and $KUJI for deposit. The specific input currency depends on the unique characteristics of each strategy that gets created.
Voting Power Demand
Having previously founded protocols, the team is well-versed in the challenges of attracting sustainable Total Value Locked (TVL), users, and overall consistent product demand. Airdrops or hyper-inflationary rewards can often attract mercenary capital that leaves as soon as those incentives run out. Smarter teams will recognize the unique opportunity that Blend Protocol offers, where they can strategically utilize the protocol to bribe, reward, or acquire voting power to encourage strategies to be built on their protocols. This fosters a steady flow of TVL, more users, and increased liquidity overall for successful strategies. Blend Protocol will become a powerful tool for those protocols that can effectively leverage its potential. This demand opens the door to a bribe and veToken model, creating an additional need for the $BLEND token.
Whitelist Partnering Protocols
At launch, Blend Protocol will have Kujira dApps (ORCA, GHOST, FIN, BOW) whitelisted for building yield strategies. However, there are more blockchains and dApps that would allow for yield access to create strategies with. Those protocols that seek sustainable traction and TVL can apply for their protocol to be whitelisted, allowing strategies to be built on them.
The chart below illustrates how the ‘demand fly-wheel’ not only boosts TVL but also brings new users into the ecosystem. The cycle begins with Core Contributors building strategies, generating fees and rewards that attract new users and increases Total Value Locked (TVL). As the platform gains visibility, our open market for design and innovation grows, leading to the proposal of new strategies. $BLEND stakers then vote for these strategies, resulting in funding and development. These newly launched strategies attract new users, liquidity and generate new inflow of fees. This cycle repeats, creating a flywheel effect that drives increasing demand and growth.
$BLEND Tokenomics & Allocation
We’re excited to present the $BLEND tokenomics. We’re confident that this allocation ensures an equitable distribution among all future stakeholders while maintaining a harmonious ratio between investors, contributors and community. Simultaneously, it empowers Blend Protocol with ample resources to evolve into a leading-edge platform. This approach provides an equal opportunity for everyone to become part of our journey!
The total supply will consist of 100M $BLEND tokens, with a majority of 36.5% held in the Blend Treasury. This portion serves as a Reserve for future contributions, grants, and other essential purposes. Below, you will find the token allocation distribution along with their explanations.
Staking Incentives — 10%
To incentivize staking, we will allocate 10% of the total supply for rewards, at least initially, while maintaining sustainability with 1% available at TGE.
- Staking plays a crucial role in the overall protocol, and those who participate will be duly rewarded.
- We are exploring the implementation of Protocol-Owned Liquidity (POL), which could be an additional form of yield for stakers.
Community Incentives — 12%
In a similar fashion to staking Incentives, we will offer additional rewards for Strategists, Builders, and Runners.
- The bootstrapping and innovation culture and economy around Blend Protocol will be structured to effectively incentivize revenue for the protocol and $BLEND Stakers.
Community Treasury/Grants — 36.5%
The primary reason for this fund is to ensure all winning strategies get built to a high standard and in a timely manner. It will be in charge of rewarding developers for building strategies and in return capture some % of strategy performance fees to ensure it’s economically incentivised to ensure the best builders are building the highest quality products.
This will be managed by a multisig and after governance is established, a DAO will take the role of managing this in parallel with core contributors to the project.
Marketing — 2.5%
The future size of our community footprint will be our greatest asset and a fixture in long-term growth and sustainability. The development of Kujira has shown the importance of a strong and supportive community.
We are proud to have received strong support from the strong Kujira Community and we will keep collaborating and growing with them. In order to attract liquidity, we will also target other Cosmos chains, Arbitrum, and DeFi in general.
A reasonable proportion of this allocation may be used for partnerships in order to gain exposure to different communities. These new communities will span the Cosmoverse and Arbitrum initially, with expansion to more chains imminent.
Development — 19%
These tokens will be allocated to funding future development as the protocol grows, covering various costs, including:
- Audit costs
- Core protocol/Strategy Development Costs
- Incentives for new team members
- Operating Expenses
- Infrastructure
- Dev effort for whitelisting new protocols
Core Team — 4.5%
The core team allocation is 4.5% of the total supply, corresponding to 4.5 million tokens. What is unique to this core team allocation is these tokens will be subject to conquering milestones for each member. For tokens where the milestone was not delivered on, they can either be reallocated to someone else who completes the milestone or be transferred back to the development fund.
An example of a milestone would be the successful delivery of the governance module for Blend. If a team member achieves an ambitious yet reasonable threshold here, they will be allocated a proportion or all of these tokens based on terms previously agreed upon by the core team.
Market Making — 1%
We allocate 1% of the tokens to enhance the trading experience for users interested in swapping (buying or selling) $BLEND. These could be provided as incentives on BOW (or as a tokenswap with MantaDAO) to ensure deep liquidity for future token trading.
Public Sale — 2%
For everyone who’s as excited as we are and looking to be part of our success, we’re organizing our public sale with 2% of the total supply. We recommend (new) users to prepare a Kujira address, with a wallet extension/app that supports the Kujira blockchain.
PILOT Launchpad
We’re using the PILOT launchpad for bringing the $BLEND token to the public. PILOT is an intuitive and innovative launchpad, built by Kujira & Fuzion. We recommend reading this article to get an understanding of how PILOT works. The public sale is planned for late September and the exact dates will follow. Stay tuned and keep up to date by following all of our social media channels!
To participate in the public sale, a Kujira address is required, and we recommend the use of the following wallet apps/extensions to participate: Sonar, Keplr, Leap, Station and XDEFI. If you have any questions, please ask in our Telegram and Discord channels.
Note: be careful, ignore DM’s from scammers, Admins never DM!
OG Pre-Sale — 0.5%
In the beginning of September, a pre-sale will be conducted in collaboration with Plasma Fuzion. The pre-sale token price will be lower than that of the public sale. The pre-sale will include a cliff and vesting period, designed to limit sell pressure on future public sale buyers.
This pre-sale is exclusively for those who have joined the Blend Protocol Discord server, obtained the OG Blender role, or submitted their Kujira address for whitelisting on a giveaway. Users with the OG Blender role have to share their Kujira address with our team via the #whitelist channel. This will grant them a whitelist spot for the pre-sale. To participate in the pre-sale, a Kujira address is required. We recommend to use Keplr Wallet (Leap should work too).
OTC Rounds — 5%
Recently, we’ve been keeping a close eye on MantaDAO. They’ve been utilizing a rather interesting method to secure capital — namely initiating over the counter (OTC) deals on Plasma Fuzion. We see these OTC deals as a collaborative way to raise funds in conjunction with the community, all with the aim of propelling Blend Protocol’s development. The beauty of OTC deals lies in their flexibility, for example, we could give a first option to our stakers. All OTC deals will be created in alignment with the growth of Blend Protocol. 10% of OTC allocated funds will be vested at the token generation event (TGE), meaning even if not used, it is available in case a beneficial OTC swap opportunity arises.
Private Seed — 7%
We are seeking private seed funding from venture capitalists (VCs) and angel investors to establish a sustainable runway for the development of Blend Protocol. We invite investors from diverse backgrounds who share our vision of providing simpler and more effective access to awesome yet efficient strategies.
Vesting & Cliffs
All tokens (except Market Making and Public Sale allocation) will be vested. There is a 2 months cliff and 4 months vesting for the OG pre-sale. Other tokens vest linearly over a period of 24–36 months to prevent supply shocks and maintain liquidity stability with some having cliffs. Please refer to the Tokenomics distribution table to understand both cliff and vesting schedules for each allocation.
Conclusion
Kujira was conceived to empower absolutely everyone to access the full potential of DeFi, with simplicity at its core. In the same spirit, we believe that robust tokenomics form the foundational pillars of a sustainably bootstrapped, community-driven, and widely embraced decentralized protocol.
We hope this article offers readers a glimpse into our plans and highlights the tremendous utility of the $BLEND token that lies ahead. Follow us on Twitter, and join our Telegram and Discord channel to connect with like-minded individuals.
Blend is where grassroots DeFi innovation comes to life!
The Blend Builders
