$OPTIM Token Migration
Overview
As Optim nears its 3-year anniversary, we stand at a transformative juncture in our journey. Having navigated the challenges of a historic bear market, we’ve emerged stronger than ever, with OADA — our first OToken — rising rapidly to approach top 5 TVL status on Cardano.
With the imminent launch of OUSD, lend/borrow modules for OTokens, and other exciting innovations slated for early 2025, we’ve reached a pivotal moment in our protocol’s evolution.
To scale further, drive innovation, and cement our position at the top of Cardano DeFi, we’re introducing comprehensive changes to the OPTIM token. These updates will realign incentives and unleash the next phase of our protocol’s growth.
A few important points that provide more context and insight into changes are as follows:
- Optim has never had to rely heavily on emissions to support protocol adoption and growth.
- Opportunities for more advanced staking and utility necessitate programmable tokens.
- Realignment of incentives for public holders that advance the sustainability of both governance and general protocol health force the deprecation of a failed VC vesting model.
New Tokenomics
The new token will have a 75% supply reduction, scaling down from 100M Tokens to 25M.
All circulating “Public Tokens” will be converted on a 1:1 basis with no change. Every 1 outstanding $OPTIM token will be converted to 1 $O token for individuals.
These are tokens held by all wallets of the token-holding “Public”, meaning not Team and VCs.
This will enable the $O price on DEXs to stay exactly the same upon migration with minimal disruption when the ODAO redeploys protocol owned liquidity.
All “Non-Public Tokens” will have overall cuts on a per category basis, with remaining allocations converted on a 4:1 basis. Every 4 $OPTIM will be converted to 1 $O token.
These consist of Team, VC, ODAO Treasury (POL merged into this category), and Listings.
VC’s will be on a 7 year linear vesting schedule beginning in January of 2025.
This more closely aligns with traditional VC fund schedules that enable investors to realize liquidity on investments approximately 7–10 years after initial investment.
The success of the protocol, correct alignment of incentives, and best interest of the public is top of mind when putting to vote an extension to VC vesting schedules. Our SAFTs allow for such actions with the exception of one VC that holds less than 10% of the total VC allocations.
Additional New Tokenomics
The 4M $OPTIM tokens allocated to $OPTIMiz conversion will also be converted on a 1:1 basis.
This is due to the 1:1 OPTIMiz to OPTIM conversion rate guaranteed during ILE. In the future, any unconverted $O tokens allocated to OPTIMiz conversion will eventually be migrated to the ODAO Treasury.
Following the token migration (if passed), new locks of Optimiz will be temporarily halted until a new proposal is created to address how locks will be handled moving forward.
The “Bonds Airdrop” is scaled down 4:1 and will be airdropped as a part of the public holders distribution.
Decreased Emissions , Increased Utility
While many DeFi protocols rely on emissions to bootstrap initial liquidity, Optim’s core functionality and user adoption have grown organically without significant token incentives.
As our new OToken system continues to expand we expect to realize healthy growth, as we have over the past 3 years, without any meaningful token emissions to our users as incentives. For this reason, a majority of tokens initially earmarked for emissions will be eliminated and not introduced into the tokenomics of the new token post migration.
Optim is also beginning to meaningfully scale its products and revenue as the protocol matures. As such, we must consider the possibility that the ODAO could vote on a fee switch directed towards token stakers. Migrating to a new programmable token unlocks more sophisticated staking mechanisms and utility features that weren’t possible before, enabling functions like automated compounding, delegation, and conditional staking parameters. These technical improvements, combined with a streamlined supply, position the protocol to better serve its existing use cases while opening doors for new applications that require more flexible token interactions.
A Note on VCs
When Optim raised venture capital funding in early 2022 we took the industry standard approach at the time regarding vesting terms, valuation, and general tokenomics.
We are proud to be one of the few teams that brought in much needed outside capital into the Cardano ecosystem. Most people agree that if Cardano is to remain competitive we must bring in outside capital to support top teams that have the ability to ship innovative protocols.
However, with 3–5 years of data available on tokens that were structured in a way that was once industry standard — lower float, higher FDV, 2–3 year VC unlocks — it is more or less universally acknowledged across the crypto industry to be an unsuccessful model for most protocols.
Token Categories
Public: Holders
Summary of Category:
Supply currently held in individual public wallets
+ Bond Airdrop
Current Public Holder Supply Converted 1:1 with no change — 7.5M
—
Bond Airdrop
- Original Bond Airdrop Tokenomics — 0.55% of 100M Total Supply
- Original Bond Airdrop Allocated Tokens — 0.55M → Converted 4:1
New Bond Airdrop Tokenomics — 0.55% of Total Supply
New Bond Airdrop Allocated Tokens — 0.1375M
–
Total Public Tokens (Public Holders + Bond Airdrop) — 7.64M
New Tokenomics — 31% of New Total Supply
New Total Tokens — 7.75M
**FULLY DISTRIBUTED**
*** 7.75M vs 7.64M is due to a buffer for $OPTIM tokens held in smart contracts prior to migration (dex, lending) as these tokens not be distributed automatically and will require manual distribution. Outstanding unallocated tokens in the public category will be used to cover those tokens. Any tokens not used for this purpose will be re-allocated to the ODAO Treasury***.
Public: OPTIMiz
- Original Tokenomics — 4M / 4% of 100M Total Supply
- Original Allocated Tokens — 4M → Converted 1:1
New Tokenomics — 16% of New Total Supply
New Allocated Tokens — 4M
VCs
- Original Tokenomics — 15M / 15% of 100M Total Supply
- Original Unallocated Tokens — 4.12M → BURNED
- Original Allocated Tokens — 10.8M → Converted 4:1
New Tokenomics — 10.8% of New Total Supply
New Allocated Tokens — 2.72M
7 Year Linear Vesting
(1 VC exception = 9.5% VC tokens on original schedule)
Team
- Original Tokenomics — 25M / 25% of 100M Total Supply
- Original Unallocated Tokens — 1M → BURNED
- Original Allocated Tokens — 24M → Converted 4:1
New Tokenomics — 24% of New Total Supply
New Allocated Tokens — 6M
Team Vesting Periods 1 & 2 per original tokenomics. All tokens accelerated into this
ODAO Treasury
Summary of category
POL (Protocol Owned Liquidity)
+ ODAO Treasury tokens
- Original Tokenomics (ODAO Treasury) — 5M / 5% of 100M Total Supply
- Original Tokenomics (POL) — 11M / 11% of 100M Total Supply
- Original Allocated Tokens — 16M → Converted 3.95:1
New Tokenomics — 16.2% of New Total Supply
New Allocated Tokens — 4.05M
$O tokens in the ODAO Treasury will be provided to new 50/50 liquidity pools in the same price ratio and with equivalent amounts of ADA as the previous $OPTIM liquidity pools. These pools require less token allocation and enable reduction of extraneous supply.
Listings
- Original Tokenomics — 4M / 4% of 100M Total Supply
- Original Unallocated Tokens — 4M → Burn 2M
- Original Allocated Tokens — 2M → Converted 4:1
New Tokenomics — 2% of New Total Supply
New Allocated Tokens — 0.5M
