Fixed Step Orders (FSO)
Team and Investor token sales
TL;DR We built out a new form of payment scheduling for the team and investors that is fully transparent to the community and duly incentivizes the team to build a quality product for the community. We believe that everyone should start with an equal playing field, so our Team and Investors (T&I) don't hold any tokens. This FSO structure takes the entire Team and Investor allocation of 25% (250m tokens) and sells them at 100 equal orders at pre-determined prices on the Serum Orderbook, from $.01 to $1.00 USDC. The team and investors only get a solid return if we create a successful product that the community values. Context Traditional Web3 investments in the sale of early tokens have been a one-sided mechanism for a while now. Typically, a Web3 company will raise funds through a Simple Agreement for Future Tokens (SAFT) and will sell tokens to investors before a liquidity event, such as an ICO or IDO. These tokens are sold at an agreed upon valuation and allows a project to raise funds without giving up equity in their company, thus retaining creative control over the project and company decisions. Where this mechanism becomes one-sided is in the structure of typical liquidity events and the vesting schedule attached to the SAFT. T&I tokens without a locked schedule can be dumped on the public at the first liquidity event and can shake the community's confidence. Additionally, if governance is a part of the utility of the token, T&I have a disproportionate say in the trajectory of the project. To mitigate heavy hands, many projects institute locked periods where no tokens, or a limited percentage of, can be sold at the first liquidity event. Many projects today implement a Cliff Vesting schedule where everything is locked until a certain date. This only prolongs the inevitable and does not solve for the transparency aspect; the community still does not know when the team or investors will sell. Pump and dump is a heavily referred-to term for good reason. Even with the former mechanisms in place and with the best intentions, it's not possible to create a trustless and transparent structure without innovating in this department.
Serum Splitter Mechanism Repo: github.com/mccjul/lada-splitter Solana Riptide: solana.com/riptide/serum-splitter All 250 million tokens for T&I have been split into 100, equal limit orders or 2.5m tokens. These orders are programatically placed onto the Serum Orderbook via our novel Splitter. Conceptualized by our team and executed with our partners at Ludex, the Serum Splitter is a smart-contract written into the blockchain that places the 100 orders and subsequently features a crank function. This crank is like a lever for a slot machine that would have multiple payees, only that the outcome of the sum of money is predetermined for each payee. For example: If the first 2.5m LADA sale executes at $.01 USDC, the total sale is $25,000 USDC. We can then pull the crank and the proportional funds are sent to our investors' wallet addresses, and the rest is sent to our team wallet, where we split it ourselves. Why? We got into blockchain because of its permissionless transparency. We believe that decentralization is an attainable goal, and the overarching ideals that guide us are those of honesty, transparency, and autonomy. People should be have the ability to make a risk assessment based on clearly defined parameters, not through trusting a person or a process. "People make mistakes, and that's part of being human." While this statement is all too true, it is often used to obfuscate responsibility and misdirect. If we are so prone to mistakes, then why not make more things permissionless, transparent, and historically verifiable? This is what prompted us to rethink the current structure of funding incentives in the web3 space. Everyone deserves to know how much power and authority a group has over a project if they are even considering using the product, let alone investing in it via its token or NFTs. We are advocates of an open-source world full of composability. Innovation finds itself at the crossroads of necessity and future-oriented thinking.
Simple infographic explaining Fixed Step Orders, including a graph to visually demonstrate the selling points of Team and Investor Tokens