Achieving ecosystem alignment: WOO token supply updates
Through industry-leading transparency and treasury management, WOO has proactively locked the majority of its remaining ecosystem tokens behind event-based metrics to promote a transition towards decentralized governance and better align the interests of all ecosystem stakeholders.
Summary:
- Establishing token ownership and budgeting across ecosystem entities
- Addressing surplus ecosystem tokens through an innovative locking mechanism
- Quarterly reporting of token expenses going forward
- Taking another step towards decentralized governance for WOO
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Back in late 2020, the WOO token had its token generation event (TGE) through a series of launchpads. Since then, the majority of the circulating supply has been entered through a variety of uses including growth campaigns, partnerships, staking and DMM programs, and private investor sales. Additionally, 772m tokens, accounting for roughly 26% of the total supply, have been burned and permanently removed from supply.
As of Q3, 2024, the circulating supply was 1.9b out of a total supply of 2.2b, leaving a circulating supply to fully diluted valuation (FDV) ratio of 89%. With the majority of early private investors and team vesting set to expire in Q4 2024, the WOO token ecosystem will be strongly positioned with a high circulation-to-FDV ratio and low future token emissions. This article outlines the steps taken to proactively work towards further ecosystem alignment.
Becoming an application-focused ecosystem
WOO began as an institutional liquidity provider, mainly servicing Tier 2 centralized exchanges and brokers. Presently, the flagship centralized exchange, WOO X, and an all-in-one DeFi platform, WOOFi, form the backbone of WOO’s app ecosystem. Additionally, the WOO Innovation Hub has been actively vetting early-stage builders in efforts to find more applications that attract new users and drive utility to the WOO token.
Together, this growing suite of applications forms the new future of a budding ecosystem that surrounds the WOO token. We are excited to share a series of theses outlining our bold new vision for the WOO ecosystem soon. In essence, we believe the era of the "fat protocol" is coming to an end, and that consumer-facing crypto applications will increasingly capture more attention and value within the space. Our ultimate goal is for the WOO ecosystem to become the leading application layer that onboards the next wave of users to crypto by simplifying and demystifying the entire experience.
We aim to make crypto accessible to everyone by abstracting away its complexities, seamlessly integrating CeFi and DeFi, curating the best opportunities, and delivering a next-generation user experience powered by AI. With the right tokenomics and value capture mechanisms, WOO is positioned to become a one-of-a-kind application token in the space.
Distribution of remaining locked tokens
Approximately 20% of the supply remains under ecosystem control. These tokens will be separated into new addresses, to incentivize future growth:
- Ecosystem: 75m WOO to be used for ecosystem-wide campaigns, developer grants, innovation hub initiatives, and partnerships that add utility to WOO
- WOO X: 65m WOO to give the flagship centralized exchange growth and liquidity incentives
- WOOFi: 45m WOO for user growth campaigns benefiting the Swap, Earn, Stake, and Pro applications
- WOO company treasury: 180m for future acquisitions, investors, hiring, and strategic partnerships
Going forward, these tokens will be classified in circulation as there won’t be any vesting schedule applied to them, and future usage from each address will be summarized in subsequent quarterly reports.
Since WOO was originally incubated by liquidity provider Kronos Research, they were entitled to a portion of the allocation of team tokens. Accordingly, their remaining allocation (81m) will be transferred to a new multi-sig wallet, which is partially controlled by WOO management to ensure there are robust controls around the future use of these tokens.
Dealing with the surplus
The WOO ecosystem has long-term plans to scale into an industry-leading crypto app ecosystem but acknowledges that to effectively use these tokens, it must create outcomes that are mutually beneficial for both ecosystem projects and the broader community of WOO token holders.
To achieve this, the team has opted to lock the surplus WOO tokens in a smart contract that is event-based rather than subject to vesting over time. For simplicity, the team has proposed using four tranches of unlocks tied to the WOO token’s FDV, which is summarized in the table below. While FDV is far from an ideal north star metric, after many initial discussions with stakeholders it was determined to be the least gamable and most correlated metric with the success of our ecosystem. Any unlocked tranche will be owned by a new WOO ecosystem decentralized governance that will be established in the upcoming future.
Caption: The locked surplus token will be safeguarded in a multisig for the time being, and the custody will be transitioned to a smart contract that is controlled by the decentralized governance in the future.
Should the WOO token fail to reach these FDV levels, the tokens are effectively locked and remain outside of the circulating supply. In this end-state, token holders will no longer have to worry about uncertainties associated with this token overhang.
By contrast, should the token FDV reach these lofty targets, WOO Ecosystem’s decentralized governance would have a large war chest to facilitate the next wave of growth, incubating new applications and acquiring additional users.
During the next chapter, we aim to work further towards achieving decentralized governance where the team is another engaged stakeholder of the community, rather than steering the direction of the ecosystem. To this end, we will engage a larger and more diverse group of stakeholders to further improve our event-based vesting. For example, the community may opt to move towards other metrics like volume market share or share of WOO circulating supply that is staked. Regardless, the direction towards more decentralized governance is the clear path forward.
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The content above is neither a recommendation for investment and trading strategies nor does it constitute an investment offer, solicitation, or recommendation of any product or service. The content is for informational sharing purposes only. Anyone who makes or changes the investment decision based on the content shall undertake the result or loss by himself/herself.
The development, KPI, and FDV of WOO token mentioned in the above content is based on market analysis at the time of writing and should not be interpreted as guaranteed outcomes. Market conditions can fluctuate widely and unpredictably due to numerous factors such as regulatory changes, market demand, and global economic developments.
This transformation is not an indication of guaranteed success or profitability for either WOO token, WOOFi, WOO X or any of its business partners.
Cryptocurrencies involve significant risk and are NOT suitable for the majority of investors. The value of digital currencies can be extremely volatile, and you should carefully consider your investment objectives, level of experience, and risk appetite before participating in any staking or investment activities.
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