Oraichain Tokenomics V3, 73% token burn 🔥 and key updates
Oraichain burns 73% of its total supply and updates the tokenomics to ensure sustainable long term growth.
Dear community,
Oraichain has a long term strategy and a clear vision which stands as the pillars to build a solid foundation with stepping stones towards future growth. The AI, Blockchain and DeFi industries are at an early stage and expected to grow exponentially in the coming years. We are proud to have long standing strategic partners such as Rikkeisoft and KardiaChain which is a platform in creating even more network effects to further solidify further partnerships and ecosystem growth in the coming years.
Oraichain’s sustainable growth and overall health has been of paramount importance to us as we move into the next phase of our growth period. The cornerstone of our business is to apply real world AI solutions to some of the key areas with blockchain, with areas of opportunity to make a difference in Healthcare, Automotive, Financial Services, Retail, Technology, Manufacturing and Logistics.
In a short space of time, we have raised funds through equity investment thanks to our strategic partnership with Rikkeisoft and cancelled our private sale and public sales. In light of the current short term growth, we have thoroughly analyzed Oraichain’s previous tokenomics (v2) and re-designed our new tokenomics where we have applied key changes to ensure a sustainable growth in the long term.
Oraichain Tokenomics V3:
The following are the main changes applied to the new tokenomics V3:
1. 73% token burn:
63 million ORAI tokens are being burned (roughly 73% of the current total supply). The new total supply after the burn will be 23,037,721 ORAI tokens. The token burn event will take place before 25th December 2020.
2. Oraichain new token allocation:
The ecosystem will remain with the largest allocation, which is one third of the total supply and will be the main source entering the circulating supply in the future. The tokens from the Ecosystem will be used to fuel growth in our products and services. This will occur by incentivising Oraichain node validators, AI test case providers or boosting platform adoption on the Oraichain AI Marketplace, yAI.finance and future products.
The foundation will support the company’s operations, future partnerships and other corporate business requirements. The marketing allocation will help expand Oraichain’s awareness, help position our products and services, and boost customer acquisition.
3. Circulating supply
We have re-designed the new tokenomics that highlight a strong commitment and focus for the long term. The token release schedule has been extended until 2027, stretching out from 5 to 7 years compared to our previous tokenomics (v2). The release curve has also been flattened to avoid supply shocks.
To provide further transparency on the short and mid term outlook, we will highlight the next 3 years (2021, 2022 and 2023) as an example. We have made sure the circulating supply grows gradually ensuring there are no supply shocks. This will mean an approximate 10% of the total supply is planned to be in circulation by November 2021, 20% by November 2022 and 30% by September 2023 as you can see in the following graph:
The principles driving the tokenomics update
- Long term vision and sustainability: It’s imperative Oraichain continues its journey as the world’s first AI-powered oracle and its business model remains sustainably over time.
- Fairness: We value our seed and early investors and want to protect their interests. We have taken all the critical points during our assessment from both the community and our advisory board.
- Attractiveness for investment: New investment will be needed as we develop our ecosystem, therefore we wanted to create a scenario to further benefit all stakeholders of ORAI, both current and in the future. This includes retail, future funding and onboarding strategic partners or equity investments.
- Avoid supply shocks: We understood that the short-term health of the project and the value of ORAI tokens was being diluted by the weekly emission of ORAI vault rewards. The rewards were an attractive incentive to drive awareness to Oraichain and also demonstrate yAI.Finance capability using our AI technology. However, in the short-term this created supply shocks that were not sustainable for the long term, which underpins the revision of our tokenomics.
- AI industry growth correlation: The artificial intelligence industry is expected to grow at a compound annual growth rate (CAGR) of 42.2% from 2020 to 2027, with software and services representing the majority of the market according to a report from Grand View Research. Oraichain aims to develop products and services that unlock the full potential of AI and Blockchain and, as we look towards disrupting both industries in the future, we applied a degree of correlation to the AI industry market growth in the Oraichain tokenomics.
What is coming next?
1. ORAI Vault locked rewards discontinuation: At present the ORAI vault on yai.finance, has an allocation of 2000 daily ORAI tokens. The locked rewards portion (75% of the total) will be discontinued and only the unlocked portion will remain. This will effectively reduce the total ORAI rewards to 500 daily. This update will take effect on December 25th 2020.
2. LME reward changes: As we previously announced, we are also proposing the following changes for all participants in our LME event that took place in October:
- Option 1: Both unlocked and locked rewards will continue to be distributed until February 28th 2021 with a new APY of one fourth of the existing one (your current APY*0.25). Locked LME rewards will start releasing gradually starting on March 1st 2021. This change will take effect starting on January 1st 2021.
- Option 2: Unlocked rewards will continue to be released until February 28th 2021 and we will halve the APY (your current APY*0.5). The locked rewards portion will be discontinued. Locked LME rewards will start releasing gradually starting on February 1st 2021. This change will take effect starting on January 1st 2021.
We will implement an on-chain voting system in the coming days for all LME participants currently part of the locked liquidity. They will be able to choose the option that will be applied. The high rewarding APY (as high as 11,261%) on the LME has been one of the reasons for the short term supply shocks we have seen. Whilst we understand the terms of the program were agreed, we are obliged to make this change to secure the long term health of the project and all its investors. As a showcase of appreciation, the LME participants will receive an additional and exclusive surprise that will be revealed early next year.
3. The Yield farming program will be launched before the end of 2020 to incentivise liquidity providers. It will use the ORAI/ETH pair. More details will follow in the coming days.
4. Rewards claiming system: We will implement a new claiming system for all ORAI rewards. This will include both the locked and unlocked rewards currently being distributed from the ORAI Vault and LME program.
This means ALL rewards will need to be claimed and rewards will not be airdropped. The claiming portal will be updated once a day.
For example: an investor has accrued 180 locked rewards in total. Assuming we set a locking period of 180 days, they will be able to claim 1 ORAI token per day. Any unclaimed rewards will accrue to be claimed the following day in the next cycle.
In addition, a nice surprise for our long-term investors: the rewards claiming system will take effect starting January 1st 2021 and will apply to ALL the locked and unlocked rewards accrued until that date. This will mean the distribution phase for all currently locked rewards will start one month early, instead of February 2021. The distribution period for locked rewards will be from January 1st to July 31th 2021.
We are very excited to share these updates which we believe pose a fundamental change that will have a long term positive impact for the continued growth of Oraichain. As always, we want to thank our community for their support. Please stay updated through our Telegram Announcements channel, Twitter and Medium.
About Oraichain
Oraichain is a data oracle platform that aggregates and connects Artificial Intelligence APIs to smart contracts and regular applications. Oraichain is the world’s first AI-powered Oracle, it aims to revolutionize the AI, DeFi and Blockchain industries.
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