Did we just see a Fair Launch?
Yes, yes, I know everybody is looking at $BTC and wondering if it’s gonna break 12k or dump back down to 3k, but I’ve got some other things on my mind. Or I just can’t look at $BTC stuck in between 10k and 12k for what feels like an eternity, I’m not quite sure yet. Those of you following my stories might have caught “A step towards Fair Launch..”, in which we dealt with ACDX and their decision to launch a secondary token in an effort to create a fair launch setting.
Today, I’d like to take a look at our recent AMA guest, Ferrum Network, and their recently launched governance token, FRMx.
A Night Launch
As we’ve already discussed, the issue of Fair Launch is one of the issues that have started to be taken as granted in DeFi, drawing attention to the projects that actually bother to address them. Sitting right up there with rug pulls and scam tokens, we’re yet to see a fair launch or fair distribution (not counting the money-from-heaven $UNI airdrop). If you’re new to DeFi, a TL/DR is that the flood of scam tokens drove projects into announcing SC addresses and listing dates in advance, in order to safeguard their communities against scams. This. in turn, created the issue of bots designed to grab as much of the available tokens for a single user, pushing the price upwards and forcing the majority of users to buy from them at the increased price.
And what does the bot buy when there are no tokens? Here’s where the Ferrum team came up with a clever bypass to the existing paradigm. Keep in mind, this is only possible as Ferrum Network exists since 2018 and they’ve worked to build up an impressive ecosystem, powered by their utility token FRM.
If a new project is looking at a governance token, it’s usually a mean to raise funds and the distribution gets skewed towards the large investors, wielding enough funds to get into private sales. With Ferrum, the team had the liberty to go for a fair distribution by using liquidity farming.
What are the metrics, you ask? Out of the 33,000 FRMx total supply, a massive 97.5% have been set aside for staking, LP rewards and FRM holder rewards. The remaining 2.5% the team used to provide liquidity. And that’s it - no sale, no VCs, no shady deals, just the liquidity and the community.
Sugar, Spice and Everything Nice
Could this be it? Is the FRMx recipe the one to end the Fair Launch conundrum? I’d have to say, it looks like it. The token’s small initial market cap of just $16k (yes, you’ve read that right) of course meant it will blast to kingdom come once out, and blast it did, doing more than x16 from the original listing price in matter of minutes.
However, the Ferrum team tried to make certain their governance tokens retain value by creating a feedback-loop to their ongoing FRM buy-back program. In addition to that, they will be rewarding the existing FRM community in an elaborate and well-thought-out airdrop that introduces several additional value-locking mechanisms and after that, the only way to get FRMx will be either buying it or providing liquidity for it.
As always, there is a catch - and that is, as we’ve already discussed, the fact that Ferrum Network is a project that managed to survive the bear market and continued to build, making the governance token their way of letting community take a bigger role in the project. So technically speaking, I can’t proclaim them a solution to the concept of Fair Launch, as other (younger) project might not be able to afford acting in this way.
Still, I think the Ferrum Network Telegram Channel, Medium and Website might warrant a closer look if you think theirs is a fair approach.
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Now for a disclaimer — I’m not a financial advisor, anything you read on my Medium isn’t financial advice, it’s a log of myself doing due diligence on projects, please verify any and all information presented (error reporting welcome) and make your own decisions.
