Introduction

It has been a long road as defining a new category is no simple feat - the GammaSwap Protocol has been live for almost a year and the team has been building heads down for 2+ years. The hackathon where GammaSwap Labs competed was in 2022 (see video here) and the first articles from the GammaSwap Labs team on CFMMs were posted here in 2021-2022. To date, GammaSwap has achieved an ATH of 6M+ in TVL and 100M+ in cumulative perp option volume.

In this blog post, we will cover GammaSwap tokenomics, token distribution and what is coming next for the GammaSwap protocol.

GS and esGS Tokenomics

The GammaSwap Tokenomics have been designed with game theory mechanics in mind to disincentivize mercenary capital and maximize the efficiency of emissions (EER).

How? GammaSwap offers rewards in both Escrowed GS (esGS), and Multiplier Points, inspired by GMX Tokenomics. esGS can be earned via liquidity mining or staking. MP points can also be earned via staking.

Here is the breakdown of the various rewards and the use cases for staking.

• GS Token: This is the governance token for GammaSwap. It can be staked to earn 30% of protocol revenue in ETH, esGS rewards and MP points.
• Escrowed GS (esGS): This is the escrowed form of GS. esGS is a non-transferable ERC-20 token. It is earned from staking and liquidity mining. esGS can be staked for more esGS, or vested over a 30 day period. To vest, the user must reserve the LP tokens or GS tokens that they used to earn the esGS.
• Multiplier Points: MP points are non-transferable ERC-20 tokens earned from staking. They reward stakers without inflation by increasing the APR on ETH rewards. There is an MP point cap of 100% and the MP Point APR is also 100%. If a user withdraws GS or esGS from the staking vault, the proportional amount of MP points are burned.

The escrowed tokenomics system increases the opportunity cost of dumping rewards, defers inflationary pressure and increases the stickiness of LP positions.

Tokenomics Modifications

GammaSwap received 300k $ARB rewards as part of the LTIPP program and distributed them as esARB with a 180 day vest. 

There were a few confounding factors, but the general consensus from the community was that the vest was too long.

Therefore, we have reduced the vest to 30 days for escrowed GS when it launches. Additionally, protocol revenue will also be distributed in ETH rather than ETH/USDC LP tokens.

Token Distribution

The total supply for GS tokens is 1.6B with the following breakdown of supply.

• Treasury (36%) - GS tokens reserved for the Treasury. The DAO can decide how to allocate this capital: liquidity mining incentives, partnerships, etc.
• Core Team (23%) - Allocation of the core team to align incentives with the protocol and promote long term building. There is no equity company, only the foundation.
• Investors (17%) - Private market investors from previous rounds.
• Liquidity Mining & Staking (15%) - The initial liquidity mining & staking allocation to be distributed in esGS. It will cover at least the first six months of incentives.
• LBP (5%) - The GS supplied in the Liquidity Bootstrapping Pool, which will help achieve price discovery and provide liquidity for the GS pool on GammaSwap. The LBP will be self hosted, not on Fjord.
• Airdrop (3%) - Airdrop to point holders in GS.
• Advisors (1%) - Allocation for current and future advisors to the protocol.

Vesting Schedule

There is a vesting schedule for the Core Team and Private Investors.

• Core Team: 12 month cliff, 24 months linear vesting after
• Private Investors: 12 month cliff, 18 months linear vesting after
• Advisors: 12 month cliff, 18 months linear vesting after

Looking Ahead

We are aiming to launch the LBP on August 30th. The airdrop will follow shortly after. 

Make sure to follow GammaSwap on X and join the Discord to stay up to date with all announcements!