07 Jan 2021

Sovryn is a protocol designed to grow, expand and adapt. This evolution will be directed by the process of Bitocracy - on chain governance by token holders.

The Sovryn Bitocracy provides incentives to coordinate a diverse set of stakeholders. It is designed to foster collaboration with a long-term focus on the future and mission of the platform. These stakeholders come in the form of a wide array of contributors who can participate permissionlessly. This includes early users, new users, funders, builders, content creators, and many others who have made contributions to the Sovryn DeFi platform.

The SOV token supply will be fully diluted over the next 7 years, with allocations set for all of these groups in their respective emission rates.

Total Supply: 100,000,000 SOV

Emission Period: 7 years

The 7-Year Plan for Full Dilution

The SOV supply will be fully unlocked over a 5-year period. However, it is anticipated that much of this supply will subsequently be locked in the Bitcocracy staking system. By the time of the token generation event (anticipated by February 2021), there should be 5,600,000 SOV unlocked. Then, on an ongoing basis, tokens will be emitted at the rate of between .5%-1.5% of the supply per month until month 6, when the team tokens will unlock after their vesting cliff. From here on, SOV will be unlocked (with the majority relocked to staking) at the rate of about 3% monthly for the next 18 months.

SOV Token Emission Schedule

Chart describing the release of SOV tokens over 15 years for tokenomics

It is possible that, should a loss event occur, the Bitocracy system may issue additional SOV to cover user losses. It is also possible that additional SOV may be minted for strategic purposes, such as M&A or system expansion. Minting of new SOV will require 80% or higher consensus and so is anticipated to be a rare event, or perhaps may never happen.

Use and Value Accrual of SOV

The SOV token exists to fulfil three roles:

  1. Bitocracy
  2. Risk Mitigation
  3. Fee Collection

Stakeholders are incentivized to participate in the above roles by channeling protocol revenues to SOV stakeholders.

Bitocracy

SOV staked in the Bitocracy system earns voting rights weighted by the length of staking time. Additionally, system revenues are distributed on an ongoing basis to those actively participating in governance, in relation to their voting weight.

This combination of voting power and revenue yield incentivizes long-term commitment and thinking. SOV stakeholders can choose the length of time in which they intend to stake their tokens (up to 36 months). They may also delegate their vote to other participants to incentivize experts to specialise in Sovryn Bitocracy.

Risk Mitigation

SOV provides risk coverage for the protocol by acting as a pool of staked value that can be burned, redistributed or inflated to prevent and offset losses that might occur. For example, staked SOV can be used to create trustless BTC multisig pools (eg. for use in the bridge), such that theft of funds is avoided. Additionally, stakeholders who have staked in the Bitocracy system are incentivised to place a continued emphasis and investment in protocol security, lest users lose funds and SOV value is transferred from stakers to users to offset those losses.

Fee Collection

The Sovryn DeFi platform is a revenue-generating business upheld by its governing SOV stakeholders. This includes fees from swapping, lending, borrowing, leveraging, and all future fees collected by new additional features introduced by Sovryn.

Initial Allocation

Founders Fund: 25,000,000 SOV, three-year vesting with a 6 month cliff

The founding builders of Sovryn are a diverse group from across the world. They are united by a belief in a world where financial sovereignty is a programmable human right. The most successful innovative enterprises are built by founding teams that are committed to the long-term. The team of contributors is heavily invested in the success of Sovryn and the token vesting periods reflect this long-term vision.

Early Funders: 14,520,400 SOV, 10-24 month vesting

The early funders of Sovryn believe in the future success of Sovryn as a revenue-generating business as well as in the effectiveness of Sovryn’s Bitocracy, which supports the decentralized business model. These early funders have acquired a long-term stake in SOV with a view to participation in the Bitocracy.

Genesis Sale 1,800,000 SOV, 10 months vesting

The Genesis Sale will be a whitelisted sale for the early users of Sovryn. This will be for those who tested the software, reported feedback, and followed the initiative at an early stage. The Genesis Sale participants are broken up into three groups of priority and max allocation of SOV tokens:

Community Tier: 0.03 BTC

Hero Tier: 0.1 BTC

Superhero Tier: 2 BTC

Development Fund: 10,000,000 SOV

The development pool will serve as a treasury for development-related grants and bounties for the construction of new features and rewarding new contributing builders. This will support on-going security and maintenance, as well as R&D.

Ecosystem Fund: 5,000,000 SOV

These tokens have been dedicated towards ecosystem initiatives, including ecosystem-oriented bounty programs to engage the community, or to execute partnerships with other DeFi on Bitcoin organizations. With new product releases comes the need for incentivizing the onboarding of new users to Sovryn.

Adoption Fund: 38,679,600 SOV

The heart of Sovryn is in the users who employ the product for the utilization of their funds. SOV will be distributed to users and contributors of the system via rebates, referral fees and liquidity mining. Tokens distributed via liquidity mining will be the incentivization vehicle for bringing new users and funds to Sovryn across multiple DeFi ecosystems. With the release of new products, the adoption can be used to reward the first users and testers to ensure their optimization and success.

Programmatic Sale: 5,000,000 SOV

To further distribute SOV tokens and enfranchise interested users, a programmatic sale will be held by the protocol. This will provide opportunity for users to procure SOV tokens and participate as Sovryn voters & stakeholders.

Keep on the lookout for the upcoming Genesis Sale for Sovryn users, and the Public Sale, following shortly after.

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