TrustPad Tokenomics

Thesis: We believe the two main objectives when structuring a launchpad’s tokenomics should be centered around a dichotomy of BOTH exclusivity & accessibility. These two qualities are polar opposites, but can co-exist specifically under TrustPad’s unique ecosystem. Whoever gets a chance to participate in a TrustPad IDO should get a decent allocation, and expect above average returns.

Why exclusivity?

To make a long story short, in order for an investment or token price to appreciate, there must be more buyers than sellers. In the case for IDOs, there must be significantly less people who get a chance to invest @ IDO, than the # of people who buy it post-launch. We have seen many launchpads abandon exclusivity for the sake of “guaranteed allocations” for all tiers. In such a scenario, who exactly is supposed to buy the tokens post launch, if everyone gets in @ IDO? Any team greatly benefits from having access to capital (via high a token price), and we do not think this scenario should be compromised.

The tiers for TrustPad should follow a similar suit, with there being an element of exclusivity in order to get a chance to participate in IDO’s. However, price should not be the main limiting factor (more on this later).

Why accessibility?

It’s simple. Growing the community. We could create the tiers in such a way where only a handful of individuals (whales) get to buy up all the tiers/allocations for IDO’s, however for obvious reasons, this is not desirable. The goal should be to provide accessibility for the lower tiers as well, relatively speaking. By accessibility, we do not mean getting everyone and their village into the IDO, we mean providing an affordable price for a decent number of individuals to get a GREAT allocation (priority is given for allocation!).

The nuance..

Side note/secret: regardless of social media channel group sizes, every launchpad has a range of the # of IDO investors that exist in their community. From our research, this ranges from 500–3,000 investors (just look up total participants for each IDO on various launchpads).

How many investors should TrustPad have? It comes down to simple math…

Under such a scenario, TrustPad will be able to onboard roughly 1,530–1,550 investors for this IDO. We view this as a large #, but for the sake of community, perhaps it is worth it. We would STRONGLY recommend never crossing the 1,550+, as returns would be severely impacted. (*We can add many more new entrants via NPV-NFT allocations mentioned in a previous article*). Also, placing a very short-term vesting schedule for the higher tiers could be sensible as well (given outsized allocation they are receiving)

In terms of the tokenomics, such a system would require 8,540,000 $TPAD roughly, almost the entire circulating supply! This will cause the $TPAD price to go up significantly, as many tokens are held in private sale wallets (which will not be on exchanges). This is a desirable outcome.

Although the total number (1500) is quite a lot, 500 of the winners will be from the lottery. The exclusivity factor comes into play when it comes down to getting a chance to invest in the bronze-platinum allocations (the remaining 1000 slots).

We recommend implementing a staking window as depicted below..

Staking window- Exclusivity

There will be a staking window for each IDO, where participants stake on a FCFS basis. After each pool is closed (ie 625/625 for the Bronze), users will not be able to stake on the platform (for IDO’s). By capping the tiers/contributions, and making it FCFS staking, we can ensure our community investors get the opportunity to receive a great allocation. The worst thing to do is to not be transparent with investors, going with a “guaranteed allocation for all” model where investors end up surprised when their $10,000+ worth of launchpad tokens gets them a $17 allocation (this has happened many times in other launchpads).

We want to be transparent, and upfront. If you buy X amount of tokens and get into the staking window (FCFS), you will receive a significant allocation “Y”. This information should be displayed clearly on the staking webpage.

Additionally, any unfilled allocations from the various tiers will be up for sale on a FCFS basis, and a % of the tokens for sale will go to all holders via airdrop (staked or not).

We recommend a 7 day staking window (or however long the IDO process takes) for each IDO for the bronze & silver tiers. After the time period and IDO is up, users will have to unstake their tokens, and repeat the process for the next IDO (this is to give anyone who did not meet the FCFS deadline a chance to get in on the next IDO).

For our Gold and Platinum stakers, we can arrange a registration process, and allow a 30+ day staking window, so they are not impacted by the FCFS model as much.

Future Accessibility

We anticipate in the short term (until next major vesting unlock), the price will rise substantially. Once the major vesting unlocks occur, the price will predictably drop momentarily, allowing new entrants to buy $TPAD/get into tiered allocations. Additionally, as more tokens are unlocked and trading, we can create new higher and lower tiers.

Additionally, our “silver bullet” in promoting accessibility will be our NPV-NFT allocations. This product/strategy will enable accessibility while also ensuring token price appreciation, along with maintaining decent allocations. Without going too deep into the math, we can easily provide hundreds of individuals with opportunities to purchase the NFTs, and can receive great allocations (as mentioned in a previous article).

In conclusion, we highly recommend implementing a strategy similar to (if not the same) as the one mentioned above. The guarantee of size-able allocations for investors should always be the priority, and the FCFS staking is a strong candidate to achieve that end. It goes without saying, tokenomics for launchpads projects should always be adaptable to market conditions, and not set in stone. This is a unique and novel approach, thus will have its own challenges. However, if executed well, this strategy could set up TrustPad to be the premier launchpad amongst a vast sea of competitors.

-Abe, Associate — The NewField Fund

Disclaimer: Nothing written in this research article, or any article by The NewField Fund should be considered as financial, legal, or investment advice of any kind. Investing in crypto is highly risky, do your own research. #DYOR