Airdrops Distribution Mechanism
🚨🚨🚨Attention: This article is outdated and may contain incorrect or outdated information. For the latest details on our Staking mechanism, tutorial, benefits, platform fees, and other related information, please refer to our most recent article below.
Staking your CLY tokens
Colony will deploy capital within Avalanche on early stages projects, provide liquidity to DeFi protocols, maintain an Index on top Avalanche projects, and validate networks through staking capabilities. The true sustenance and value generated by Colony’s investments is routed back to the Community through airdrops, a buyback mechanism, and staking rewards.
In order to access Colony’s application features and these rewards, you need to stake your CLY tokens (50 CLY minimum) for 20 days at least on the application: https://app.colonylab.io
Please check our staking tutorial for a detailed explanation regarding how to stake your CLY tokens: https://medium.com/@Colonylab/colonys-staking-tutorial-178cabe9a26
Early-stage Airdrops distribution mechanism
Colony’s first Airdrops distribution will happen on the 31st of December 2021. This first Airdrops session concerns our first investments in seed/private sale rounds and the following associated conditions: Colony’s investment amount and the vesting schedule of each project.
This session will be followed by recurrent Airdrops sessions, that you will have access to if you keep on staking your CLY tokens.
In simple terms:
· Tokens of each early-stage project Colony has invested in will be distributed directly to the eligible CLY stakers
· Allocation will be calculated based on how long and how many CLY tokens have been staked
· The more you stake, the more you can claim
· The longer you stake, the more you can claim
· The tokens’ distribution by Colony will follow the vesting schedule of each project
If you want to maximize your allocations and not miss any Airdrop opportunity, you must continually keep your CLY tokens staked. If you go below the minimum amount (currently 50 tokens), your longevity bonus will reset, and you will be constrained to go through the minimum period of staking (currently 20 days) to become again an Airdrop eligible CLY staker.
The variation of the staking amount is also taken under consideration for the allocation size calculation. For a given address, all staked amounts are equally time weighted for the respective period (20 days before the Airdrop session).
Airdrops allocations calculation factors
Allocations are based on 2 factors:
1) The Weight: the amount of CLY staked during the minimum staking period (20 days) prior to an Airdrop session.
2) The Longevity: the staking time is incentivized; the calculations of the Airdrops allocations take in consideration all the time you’ve been staking for, since the very first day. Simply put, the longer you stake the higher the rewards.
Snapshot and allocations calculations
The Weight Factor:
First, an on-chain data extract regarding all the transactions about Colony’s staking smart contract is realized (the snapshot). The snapshot is taken few hours before the Airdrop begins. The snapshot considers a 20 Day period to whitelist eligible addresses.
For each address, all IN and OUT transactions are monitored to compute the average amount of CLY over the period (20 days). The average amount of CLY (weight) will determine part of the allocation for the associated Airdrop session.
The graph above illustrates the period and timestamps used in the equation down below to determine the average number of CLY staked during the 20-day period to be eligible.
Staking Amount valorization based on the Weight is described below:
The equation above explains exactly how the Weight factor works over a 20-day period to establish the average CLY staked over this period prior to an Airdrop session. With this mechanism in place, Colony limits price manipulation by incentivizing stakers to keep a staked amount as high as possible over a minimum of 20 days to maximize their Airdrops allocations.
The average CLY tokens staked for 20 days is the first metric used to allocate the Airdrop. The second metric applied is the Longevity Ratio to incentivize long-term stakers.
The Longevity Ratio:
The Longevity Ratio is used in addition to the Average Weight factor to incentivize long-term stakers and increase their Airdrops allocations.
The calculation of “Deviation from Average” will be determined by a normal distribution to avoid extreme divergence between users.
The Longevity Ratio basically takes the average staking time of all the addresses inside the staking contract and add a bonus/penalty depending on the staking time if it’s longer/shorter than the average staking time calculated. This incentivizes long-term stakers by boosting further their Weight-based allocation.
Airdrop Allocation for a given user:
Once the Average number of CLY tokens staked over a 20- day period and the Longevity Ratio are calculated, the user share of the airdrop will be calculated as follows:
This equation defines the Airdrop allocation per user depending on their average CLY tokens staked and their Longevity Ratio.
It considers the user’s average amount of CLY tokens staked during the 20-day period proportional to the global average staked amount during the 20-day period. Then there’s a multiplication with the Longevity Ratio to incentivize long-term stakers as stated before.
Use cases examples
Let’s consider the 3 following user behaviors:
· User 1 has 200 CLY tokens staked when the 20-day period begins, 4 days after, he withdraws 75 CLY tokens, his staked amount falls to 125 CLY and 12 days after, he ads 150 CLY tokens.
· User 2 started staking his 200 CLY tokens 3 days after the 20-day period has started (17 days before the Airdrop).
· User 3 has 250 CLY tokens staked when the 20-day period begins, 6 days after, he unstakes all of his tokens and starts staking 100 CLY tokens again 6 days after.
As a result:
User 1 allocation:
User 1 average staked amount is 170 CLY tokens.
Let’s say that:
· The global average amount of staked CLY tokens eligible for the Airdrop is 1,000,000 (during the 20- day period)
· There are 10,000 tokens to airdrop
· Longevity Ratio (C user) = 0.1
The equation is then the following one:
User 2 allocation:
User 2 will obtain no allocation because he/she started staking too late (less than the 20-day period)
User 3 allocation:
User 3 will obtain no allocation because he/she went below the minimum staking amount (50 CLY tokens) during 20 days before the Airdrop session.
Projects tokens Airdrops (amount, vesting schedule, etc.)
80% of the tokens are airdropped to Colony’s Community, while the other 20% are used to expand Colony’s treasury to reinvest in other high-potential projects in the future. The 20% will be sold based on a vote of the Community when the DAO is implemented. The Community will decide whether to sell or not the tokens, when to sell them and where to deploy the capital issued from this sale.
The number of tokens received by CLY stakers for a specific project will be spread overtime based on the specific vesting schedule of each project. The tokens the Community receives are tokens bought during Seed and Private sales, that being said, there are naturally vesting schedules applied to protect the project and price’s perpetuity.
Colony will communicate about the vesting schedule of each project before the airdrop of its tokens.
How to claim Airdrops on the application
You’ll be able to claim your tokens for each project by clicking firstly on the “Claim project” button. Secondly, a popup window will show up and you’ll need to click on “Claim X,X..”.
The Wallet Balance:
It represents how many tokens of this specific project you already have in the wallet you’re using on Colony’s application.
The Unclaimed Balance:
It represents the tokens that have been airdropped and that you can claim. These tokens will then be added up to the Wallet Balance amount once they’re claimed.
Claiming start and deadline:
You can start claiming your tokens right after “the Airdrop is live announcement”. Regarding the claim deadline, you’ll have until the end of the vesting schedule of the project+ 6 months to claim you tokens. You can either start claiming throughout the vesting or claim all of the tokens that are available to you at the end of the vesting schedule.
Let’s take TaleCraft as an example: the vesting is %20 TGE, 90-day cliff, linear for 15 months. You will have until the end of the vesting (18 months) + 6 months to claim your Airdrops. That being said, you’ll have up to 2 years to claim your tokens. Plenty to time to claim all of your tokens at once.
Claiming Airdrops in 2022:
In the future Colony is hoping to deploy a button that allows you to claim all of your tokens at once. More information regarding this will be shared in Q1 2022.
Liquidity Provider Program / Validator Program rewards
The Liquidity Provider Program and the Validator Program rewards will be accessible in Q1 2022, respecting the same factors as the Airdrops:
1) The Weight: the amount of tokens (+ 50 CLY) staked during the minimum staking period (20 days).
2) The Longevity: the staking time will be incentivized; the calculations of the rewards take in consideration all the time you’ve been staking for, since the very first day. Simply put, the longer you stake the higher the rewards.
Colony’s Staking Smart Contract Information
A user becomes eligible for an Airdrop when he/she respects these two conditions bellow:
Colony’s staking Smart Contract: 0x5B0d74C78F2588B3C5C49857EdB856cC731dc557 Staking.sol
1) Staked amount above 50 CLY:
2. authorizedStakeAmount (currently 50000000000000000000 uint256)
2) Staking period higher than 20 days:
3. authorizedStakePeriod (currently 1728000 uint256)
Note: addresses that are staking more than 20 days and for an amount equal or above 50 CLY tokens can be checked with this function: 7. isAccountAuthorized
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