Should vesting be accelerated?

Nothing in this post or follow up discussions should be taken as financial advice or an endorsement of any token/asset.

Some of the DAO contributors were discussing tokenomics with a group of thought leaders and the idea of accelerating SAFT vesting (unlocking all investor’s tokens) came up. In theory, paper hands will sell while token price and liquidity is low (relative to historical data), leaving only the long term believers in the DAO. This could set the DAO up for long term success.

Original vesting breakdown can be found here. Simplified stats as of today (April 6, 2023)

Current circulating supply: 176,803,772
Investor SAFTs still vesting: 76,500,000
Circulating supply after acceleration: 253,303,772

Note: Current circulating supply is pulled from the API here and the logic behind calculations can be found here. The number will differ from original vesting breakdown due to DAO proposals that have passed for various items like liquidity mining. The logic is subject to change for improved accuracy as standard practices become more established.

Contributor, team, and advisor vesting should remain on the original 4 year schedule.

All Foundation SAFTs are on-chain within SPL Governance Voter Stake Registry plug-in and Realms. So accomplishing this task would take some development work and time. The goal of this post is to gather feedback (positive and negative) around this idea and determine if it’s worth putting into motion.

  • For: investor accelerated vesting
  • Against: investor accelerated vesting
0 voters

I think it’s a really interesting way to decrease token overhang from larger investors, while still keeping the team incentives aligned with the long term goals of the protocol.

Would be very interested to hear the PSY communities take on this as well as investors.

Seems interesting, I can see it going both ways. Are there any case studies of other DAOs doing the same to accelerate vesting and what were the impact of it?

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I think this idea is interesting. One side of me likes the idea of shaking out any weak hands and improving tokenomics but the other would like to hear how the DAO would combat a cascading effect if enough large holders were dump. Would be interesting to hear of any previous instances of accelerated vesting in the solana ecosystem and how the respective communities responded.

Hey - thanks for the feedback!

I completely agree with you. General feedback is that majority are for accelerated vesting, though we’re still gathering feedback from investors. Will update once we get their take on this.

Hi Validathor - thanks for your response!

I’m not aware of any specific case studies of DAOs accelerating SAFT vesting, but from a tokenomics perspective, it makes sense that the impact of it would be positive. Curious to know your thoughts on how it might play out.

Hi Dz94 - thanks for the feedback!

While a cascading effect is definitely a risk, one of the ways we would combat it is to involve the community in the education of this and explain the rationale behind the accelerated vesting, along with its risks and benefits.

This actually ties in with our rebrand from PsyOptions to PsyFi, as we’re committed to rebuilding open and transparent communication about our progress and goals.

Given the lack of opinions from large token holders, I’d say that this is a low conviction play with potential of heavy devwork required to unlock. I suggest that we KIV until sometime in the future when more conviction from token holders forms.

Disclaimer: Nothing in this post or subsequent discussions should be construed as financial advice, an offer for purchase or sale of any securities, or an endorsement of any token/digital asset. The PsyFi protocol is not available to U.S. persons or accessible from the United States or its territories.

Following the previous discussion regarding the acceleration of PSY Vesting for all existing PSY investors, we are reopening the topic to seek further community input. A summary update as of August 26, 2023, is as follows:

  • Current PSY Circulating Supply: 201,298,484
  • Tokens Still Vesting: 217,500,000
  • PSY Circulating Supply After Acceleration: 418,798,484

While the initial post garnered support from the forum participants, it did not receive significant backing - or opposition - from any major PSY holders, whose tokens would be unlocked under the prior proposal. Due to the engineering efforts required to unlock, the proposal was subsequently deferred.

The PsyFi DAO is reintroducing this proposal for community discussion as the first phase of a comprehensive overhaul of PSY’s tokenomics. Dubbed ‘PSY Reloaded’, this marks a reset of PSY’s tokenomics away from a pure governance token towards a value accretion model. The plan has three key parts that are intended to work in unison to create a PSY Reloaded flywheel that increases usage of PSYs products while benefiting token holders. The phases of PSY Reloaded and a high level summary is shared below:

Reloaded Phase I - PSY Accelerated Vesting

Reloaded Phase II - The launch of the PSY Staking program to provide PSY holders with rewards from protocol revenue while simultaneously giving them a say in governance.

Reloaded Phase III - The launch of DeMUX, an automated value capture tool that gives the community the ability to decide whether and how to transfer fees from PsyFi products into building protocol owned liquidity or other purposes that the community deems to be in PsyFi’s best interests.

Further details of each phase will be shared in subsequent posts and are not the main focus of this proposal.

The rationale for this investor unlock is outlined below for discussion:

  • Initiate the first step in PSY Reloaded token overhaul plan.
  • Immediate reduction of PSY token overhang by unlocking all PSY vesting, fostering a more organic community.
  • Provide an opportunity for those less committed to exit the PSY community immediately, ensuring only the most dedicated participants remain.

We think that the advantages of this approach far outweigh any potential drawbacks, laying the foundation for a robust and thriving PSY community—but we want to know what the PsyFi DAO thinks.

We are keen to receive feedback from the community, either through responses on this forum or a simple yes/no vote on the original poll above.

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I am once again supporting this proposal. I believe a reset is what’s needed to revitalize the PSY community and bring in new members.

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I am in favour of this proposal.

PSY Reloaded would revitalize it’s tokenomics once again, by allowing community holders to eventually own a greater share of the PSY token. Those divesting at this juncture would essentially be forfeiting value compared to IEO/Seed pricing.

The investors who choose to remain are inherently those with a robust belief in PSY’s future potential. This is healthy for the continued growth and decentralization of the PSY protocol.

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I am in favor of this proposal. It will help with the token overhang and bring liquidity to current investors if they wish to exercise it.

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Im in favor of the accelerating vesting. I look forward to the opportunities created by redistribution and revitalization of tokenomics

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Overhang from investor lockups can be a deterrent for new community members. I’m in favor of accelerated vesting as it can help shake out weak hands and leaves behind those that are committed.

Coupled with staking, this allows the early investors to signal whether they’re still committed long term by unlocking from accelerated vesting and locking into staking.

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very much in favor, would be great to see PSY being more than a governance token

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