Alpaca Finance is a fair launch project with no pre-sale, no investor, and no pre-mine. Similar to many fair launch projects, we will reward various participants that help bootstrap our ecosystem. This will be the only way to earn ALPACA tokens.
We will soon launch a governance vault that will allow community members to stake their ALPACA tokens; stakers will receive xALPACA where 1 xALPACA = 1 vote, allowing them to decide on key governance decisions.
We will let the community decide how they want the economic incentives to be captured by the ALPACA token ; For example, it could be similar to Sushiswap where x% of fees generated go to perform token buyback and burn. In fact, upon launch of leveraged yield farming, there will already be several mechanisms in place making ALPACA deflationary in nature.
Deflationary mechanisms for ALPACA:
Every time our liquidation bot liquidates a leveraged position, it receives 5% of the position's value as a fee. 100% of those fees will go towards buybacks and burns of the ALPACA token.
When a borrower takes out a loan of tokens in order to engage in leveraged farming, they pay a fee to the lender in interest. 10% of that interest will go towards the protocol fee, of which half(5%) will be used on buybacks and burns of the ALPACA token.
Why have we chosen to go with token burn instead of direct fee distribution? Because burn is also a method of fee distribution, only it's more efficient at increasing token price. Burn directly lowers available supply which increases the value of the remaining tokens. Instead of giving out protocol earnings as yields that users can, and often do, dump on the market, through burn, these earnings embed into the token price itself, which discourages selling because users would have to sell part of their principal. This is a more effective way of both rewarding long-term holders, and creating them.
ALPACA tokens will be a fundamental part of future initiatives providing protocol utility. In particular, we're planning an NFT integration that will require ALPACA tokens to participate, and will offer benefits relating to various aspects of leveraged yield farming such as higher available leverage level, higher lending rates for lenders, lower lending rates for borrowers, and more.
87% of our total supply will be distributed to the users of the protocol--a genuine fair launch, with less than 9% of the tokens vesting to the team over a two-year period. Over these two years, ALPACA will be released with a decaying emissions schedule. In total, there will be 188 million ALPACA. To incentivize early adopters, there was a bonus rewards period for the first two weeks.
Below is our planned block reward schedule. Based on it, the circulating supply profile of ALPACA can be plotted. Please note that although it is also monthly like the Stronk schedule, the below schedule advances periods at the beginning of the month, whereas the Stronk schedule does so in the middle of the month.
Please note that the inflation rate drops off dramatically after the initial periods. In fact, the inflation rate will fall under 5% after July 2021.
8.7% of the distributed tokens will go towards funding development and expanding the team, and will be subject to the same two-year vesting as the tokens from the Fair Launch Distribution.
There is an allocation of 8 million tokens reserved for future strategic expenses. These include listing fees, audits, third-party services, liquidity for partnerships, etc. 250,000 of these tokens were used to seed PancakeSwap's ALPACA-wBNB pool. To avoid dilution to token holders, we've also implemented a restriction. No more than 200,000 tokens (~2.5% of the 8 million) can be withdrawn each month, with the only exception being if there is prior approval from a community vote.
ALPACA token address: 0x8f0528ce5ef7b51152a59745befdd91d97091d2f