Let’s take a look at the ‘DLP token distribution’ which has a significant impact on the success of the cryptocurrency project today.
Features of DLP Token Distribution
The important point to note is that there is no allocation of tokens to foundation officials. It seems that an important decision was made to uphold the spirit of Satoshi, as they say.
In general, tokens are listed on exchanges and the proceeds from selling foundation tokens are used to cover company operating expenses. However, what is impressive about DLP tokens is that they are designed to be distributed fairly to everyone.
So, what is the distribution plan for DLP tokens?
The distribution plan for DLP tokens is divided into three stages, and currently only the first stage (10% of the total supply) has been confirmed.
Since a total of 1 billion DLP tokens have been issued, you can think of only 100 million tokens being confirmed for distribution so far.
*Currently, approximately 5 million DLP tokens are circulating in the market.
First, the DLP Foundation plans to exceed the value of the token above the Standard line (blue line).
How do you expect the value to rise as the supply continues to increase?
As the DLP ecosystem expands, the demand for DLP tokens will increase. However, the supply (cash-out needs of DLP tokens) will also increase in line with the increased demand.
Therefore, the DLP Foundation has established a mechanism called DSRG* (DLP Staking Reward Guard) to defend against a rapid decline in token value while also allowing for potential increases.
What is DSRG (DLP Staking Reward Guard)?
DSRG exists to stabilize the price of DLP tokens.
It is secured from profits generated from DLP fund management and is a pool in which BTC, USDT, KLAY, etc. are deposited.
When the price of the DLP token drops to the -10% line (green line) or -20% line (yellow line), it is used for buyback purposes to recover the price.
If the price of DLP tokens falls to the -50% line (red), and all the funds in DSRG are depleted, then the strategy will be to utilize the funds in a separate pool accumulated through DLP liquidity to perform aggressive buybacks to increase the price while reducing the circulating supply and return to the Standard line (blue).
From this information, it is clear that the management team of the DLP project has considered various scenarios and may have prepared for contingencies that could not have been anticipated without experiencing numerous projects.
In addition, it is noteworthy that the foundation and stakeholders have not been allocated separate quantities, which could be a significant burden in operating the project.
Despite this, the efforts to promote this policy seem to approach blockchain philosophically and correctly.
With this level of effort, I have no doubt that the foundation and participants can grow together in this project.
However, as always emphasized, please remember that this industry has risks such as rapid market downturns and exchange bankruptcies, so it is important to approach it with the right investment mindset rather than speculative approach.