RAD Token Updates: The Great Burn
Harvest $Monet at Cardania
June 13, 2022
Cardania Dynamic NFTs
January 31, 2023
Announcing some RAD token related updates!
It's been some months since we launched RAD and implemented the extremely awesome Living Lands distribution mechanic. Since then we've also launched RAD mining via SUMN pool delegation, RAD minting of NFTs, and distributed RAD to multiple partners to incentivize their utility. Despite many projects claiming to offer "utility" for their tokens, to date we are still one of the only projects on Cardano which allows you to mint with the project's token! We've had some time to look at data and consider some system level adjustments. The following are notes and updates to RAD's model which we're calling the"The Great Burn" update.
RAD Supply is obviously too large - We knew this getting started, but underestimated it by likely several orders of magnitude. This has had some negative market effects - Less adoption, low TVL, less overall interest, and generally lame market performance. It's nice to plan for a 30 year distribution period, but the reality is that the current market doesn't actually care about that, and the token needs to be somewhat competitive and desirable in the more near term if its going to be competitive in the long-term.
The good news is that adjusting outstanding supply downward is a somewhat simple task - Deflation of supply, or "Burning" tokens on Cardano can be accomplished on a locked Policy via sending them to a "Burn" wallet, locked with a Plutus smart contract. There are two pillars of the Burn update:
1) We are immediately "burning" 45B RAD tokens (50% of total supply) via wallet smart contract. As of 8/28/2022 this transaction has been completed and 45B has been officially moved into the burn wallet here. Please be extra cautious if you try to send anything to this wallet as it is impossible to take something out once its been put in.
This initial burn is a gigantic "thank you" gift to our early adopters - You now own significantly more of the total RAD Supply. This supply reduction is also not the last reduction we intend to do - The simple goal is to approach a zone of supply which is more competitive with the market.
2) Starting shortly, the treasury will automatically deflate (burn) an adjustable amount of RAD , based on the amount of RAD harvested the epoch prior. This adjustable automated deflation will help reduce supply in an organic way that simultaneously incentivizes delegation to SUMN, increases the value of our RAD producers (like Terraforms), and rewards token holders with ongoing value.
So how could this all shake out? We've modeled out a couple examples below:
If SUMN pledge MAXIMALLY SATURATES (unlikely) @ ~70M ADA, with 1M RAD "mined" per block of ADA, and a production average of 60 blocks/epoch (x 73 epochs/yr) = Approximately 4.38B RAD may be harvested via SUMN each year (with an equivalent amount burned).
4.38B x 2 = 8.76B
45B RAD/(8.76B) = ~5.13 years of both distribution and deflation
4.38B x 5.13 years = 24.15B total burned via Deflation
Total Supply = (45B - 24.15B) = 20.85B Total Supply at the end of 5.13 years (given maximal SUMN saturation)
But the example above is for maximal SUMN saturation. At CURRENT SUMN delegation, an aggressive deflation mechanism (10x multiplier) still leaves a much longer time horizon for full distribution:
SUMN @ ~5M ADA, with 1M RAD "mined" per block of ADA, and a production average of ~5 blocks/epoch (x 73 epochs/yr) = Approximately 365M RAD harvested via SUMN each year
365M x 10 = 3.65B [ + 365M ] = 4.015B/yr outflow
45B RAD/(4.01B) = ~11.22 years of both distribution and deflation
4,562,500,000 distributed = 40.5 Total Supply after 12.5 years Total Supply = (45B - 24.15B) = 20.85B Total Supply at the end of 5.13 years (given CURRENT SUMN saturation)
Do note that these are just examples of how this automation might play out and these do not take into account outflows from gaming and other distribution mechanisms. Regardless, it highlights how this mechanism can be a useful tool in our toolbox for controlling supply.
Other RAD Notes:
- Between 400-500 delegators harvest RAD each epoch. That is however, only 1/4 of all current SUMN delegators! Make sure you are harvesting your RAD each epoch at ll.cardania.com
- Delegation RAD mining had the second order effect of making Terraform RAD harvesting look rather paltry by comparison. So we updated Terraform production by 4x (effective Epoch 359). This is meant as a relative increase in production to bring parity between the two harvesting methods.
Churn: Churn is a concurrent process of providing "sinks" in the form of mints, in-game purchases, etc. for RAD. Reducing Total Supply is great as a mechanism for rewarding current holders, but Churn is what reduces "circulating" supply - The more we develop, the more "stuff" you can use RAD for, the more Churn helps reduce the circulating supply. So, make sure you take advantage of our RAD mintable Album, and other future RAD mints!
In order to facilitate a generally less inflationary environment for our circulating supply, we will also look at a tightening of overall distribution of RAD Mining and Terraforms supply beginning in December. We'll post more details on that as we get closer to the date. Thank you and stay RAD!
It's been some months since we launched RAD and implemented the extremely awesome Living Lands distribution mechanic. Since then we've also launched RAD mining via SUMN pool delegation, RAD minting of NFTs, and distributed RAD to multiple partners to incentivize their utility. Despite many projects claiming to offer "utility" for their tokens, to date we are still one of the only projects on Cardano which allows you to mint with the project's token! We've had some time to look at data and consider some system level adjustments. The following are notes and updates to RAD's model which we're calling the"The Great Burn" update.
RAD Supply is obviously too large - We knew this getting started, but underestimated it by likely several orders of magnitude. This has had some negative market effects - Less adoption, low TVL, less overall interest, and generally lame market performance. It's nice to plan for a 30 year distribution period, but the reality is that the current market doesn't actually care about that, and the token needs to be somewhat competitive and desirable in the more near term if its going to be competitive in the long-term.
The good news is that adjusting outstanding supply downward is a somewhat simple task - Deflation of supply, or "Burning" tokens on Cardano can be accomplished on a locked Policy via sending them to a "Burn" wallet, locked with a Plutus smart contract. There are two pillars of the Burn update:
1) We are immediately "burning" 45B RAD tokens (50% of total supply) via wallet smart contract. As of 8/28/2022 this transaction has been completed and 45B has been officially moved into the burn wallet here. Please be extra cautious if you try to send anything to this wallet as it is impossible to take something out once its been put in.
This initial burn is a gigantic "thank you" gift to our early adopters - You now own significantly more of the total RAD Supply. This supply reduction is also not the last reduction we intend to do - The simple goal is to approach a zone of supply which is more competitive with the market.
2) Starting shortly, the treasury will automatically deflate (burn) an adjustable amount of RAD , based on the amount of RAD harvested the epoch prior. This adjustable automated deflation will help reduce supply in an organic way that simultaneously incentivizes delegation to SUMN, increases the value of our RAD producers (like Terraforms), and rewards token holders with ongoing value.
So how could this all shake out? We've modeled out a couple examples below:
If SUMN pledge MAXIMALLY SATURATES (unlikely) @ ~70M ADA, with 1M RAD "mined" per block of ADA, and a production average of 60 blocks/epoch (x 73 epochs/yr) = Approximately 4.38B RAD may be harvested via SUMN each year (with an equivalent amount burned).
4.38B x 2 = 8.76B
45B RAD/(8.76B) = ~5.13 years of both distribution and deflation
4.38B x 5.13 years = 24.15B total burned via Deflation
Total Supply = (45B - 24.15B) = 20.85B Total Supply at the end of 5.13 years (given maximal SUMN saturation)
But the example above is for maximal SUMN saturation. At CURRENT SUMN delegation, an aggressive deflation mechanism (10x multiplier) still leaves a much longer time horizon for full distribution:
SUMN @ ~5M ADA, with 1M RAD "mined" per block of ADA, and a production average of ~5 blocks/epoch (x 73 epochs/yr) = Approximately 365M RAD harvested via SUMN each year
365M x 10 = 3.65B [ + 365M ] = 4.015B/yr outflow
45B RAD/(4.01B) = ~11.22 years of both distribution and deflation
4,562,500,000 distributed = 40.5 Total Supply after 12.5 years Total Supply = (45B - 24.15B) = 20.85B Total Supply at the end of 5.13 years (given CURRENT SUMN saturation)
Do note that these are just examples of how this automation might play out and these do not take into account outflows from gaming and other distribution mechanisms. Regardless, it highlights how this mechanism can be a useful tool in our toolbox for controlling supply.
Other RAD Notes:
- Between 400-500 delegators harvest RAD each epoch. That is however, only 1/4 of all current SUMN delegators! Make sure you are harvesting your RAD each epoch at ll.cardania.com
- Delegation RAD mining had the second order effect of making Terraform RAD harvesting look rather paltry by comparison. So we updated Terraform production by 4x (effective Epoch 359). This is meant as a relative increase in production to bring parity between the two harvesting methods.
Churn: Churn is a concurrent process of providing "sinks" in the form of mints, in-game purchases, etc. for RAD. Reducing Total Supply is great as a mechanism for rewarding current holders, but Churn is what reduces "circulating" supply - The more we develop, the more "stuff" you can use RAD for, the more Churn helps reduce the circulating supply. So, make sure you take advantage of our RAD mintable Album, and other future RAD mints!
In order to facilitate a generally less inflationary environment for our circulating supply, we will also look at a tightening of overall distribution of RAD Mining and Terraforms supply beginning in December. We'll post more details on that as we get closer to the date. Thank you and stay RAD!
50% of the 90B RAD Token Supply has been sent to a smart contract burn wallet, as of this transmission. 45B is the current Total Supply.
Supply reductions are meant to ensure RAD is competitive in the market. Automated deflation is also slated to be deployed shortly.
