As India celebrates its 75th Independence Day on August 15th, we are excited to announce phase 1 of the Pana token launch. For those who are new to Pana DAO, we are a new protocol that provides democratized parametric insurance with the goal of serving the underserved in the real world. We are unique by offering something to crypto-natives and the rest of the world simultaneously. Please have a look at our previous medium articles to understand our protocol and how our tokenomics works.
We have been listening to the community and looked at token launches that have happened over the past 12 months to determine what would be the best approach for launching our tokens. We built experimental models around an IDO NFT launch, followed by Copper and other ad-hoc solutions. These required us to launch a pre-sell token as a security or sell to a limited number of holders, which was not in the best interest of the community and our goal. After much deliberation, we finalized our token launch inspired by the Giddy multi-phase token launch — a development team we hold in high regard.
Our token launch will be spread over three phases:
Phase 1 — Token launch — Streaming
On August 15th we will launch phase 1 of the token launch which will be free streaming of the Pana token. During this phase, there will be multiple staking pools available. Stakers can stake their tokens and Pana rewards will be streamed to the stakers at a fixed rate per second. The rate of streaming will be set by governance for each of the staking pools and the rate may vary depending upon the staking pool. The Pana rewards can be harvested by the stakers at any point in time.
Pana token price during launch will be set at a base price of 1 cent with a daily streaming limit of 50,000 tokens for the first month followed by the same rate daily tokens starting from the second month, though we may revisit this as we progress. This daily rate will be used to set rewards which are to be streamed every second.
The staking pools that will be available during the launch are as follows
The objective of Phase 1 is to distribute as many Pana tokens as possible to as wide an audience as possible with the aim of encouraging everyone to participate in Phase 2 bonding. We believe the mechanics of bonding are straightforward. But for people new to the tokenomics, our multi-phase launch is intended to ease everyone into bonding while providing open access to anyone who wants to participate — the Pana token is streamed freely in the early phases.
Phase 2 — Streaming & Bonding
During phase 2 of the token launch, streaming and bonding will be enabled together. Bonding will enable bonders to use USDC/Pana LP tokens to bond and receive Karsha. Karsha as explained in our documentation is the governance token of the Pana protocol. During this phase, bonders will receive Karsha and stakers will receive Pana through the streaming functionality. To incentivise people to switch to bonding, the rewards rates for bonding will be higher than streaming reward rates.
As mentioned earlier, the rationale of running both streaming and bonding in parallel is to help stakers become familiar with bonding as this is a critical mechanic that will be necessary during the Assurance NFT parametric insurance launch. This transition period will also help the protocol grow its liquidity pool in preparation for the bonding-only phase which will add loss ratio pegging. The start of Phase 2 will be decided at a later date depending upon the progress of Phase 1.
Phase 3 — Bonding
Phase 3 will involve only bonding using USDC/Pana LP tokens. Bonders will receive rewards as Karsha tokens and the addition of loss ratio pegging will ensure there is a healthy supply ratio that will reduce high slippage events during redemption or purchase events. There will be a separate medium article on how the loss ratio pegging feature works and also the mechanics behind it. This new feature is implemented to protect the community from slippages that might occur when there are large Karsha/Pana redemptions (i.e. parametric events).
The notion of a phased launch is to make the tokens available to as many people as possible and also reduce the possibility of whales accumulating a disproportionate number of assets that will distress the protocol at a later date. Since Pana is provided freely, it makes adoption easy and reduces risks to the protocol in the future. Lastly, since Pana is streamed free of cost it enables the token to reach the larger community and builds protocol liquidity by placing it into everyone’s hands from the first day.
Join us in celebrating the launch of democratized insurance!