Runes Migration
The loyalty reward token of DotSwap has been migrated from the old BRC20 token $DSWP to the new Runes token DOTSWAP•DOTSWAP. This new token will serve as the designated token for LP rewards and DAO governance funds.
The $DSWP stored in different places will be migrated according to this logic:
V1 BRC20 balance → V1 Runes balance
On-chain BRC20 & vote-escrowed BRC20 → On-chain Runes
DotSwap BRC20 liquidity pool share → DotSwap Runes liquidity pool share
Consider this page as a reference for any future inspections of the tokenomics of DOTSWAP•DOTSWAP and as a reminder of our journey in the Bitcoin DeFi space.
BRC20 Allocation [Dated]
$DSWP was the loyalty reward token of DotSwap and its community. It has a circulating supply of 27,380,620. The fixed total supply is 1,200,000,000 (of which 22.76% is burned, and 74.958% locked, leaving only 2.282% in circulation).
74.958% of its supply was set to be released over 4 years as incentives for LP (liquidity providers), and as support for the growth of DotSwap and its community, which is set to start together with DotSwap's future LP mining program.
Through community effort, 1.3 BTC is raised to create an initial liquidity pool. DotSwap took 100% of the raised funds together with 2.282% of total $DSWP supply (which is the current circulating supply: 27,380,620 $DSWP) and created the liquidity pool, making the starting price for $DSWP be 10 sats/$DSWP.
22.76% of the total supply is burned (sent to 1BitcoinEaterAddressDontSendf59kuE) through community and early supporters' decision, bringing the maximum supply of $DSWP down to 926,880,620.
We took inspiration from Uniswap and its governance token $UNI, and curated this tokenomics for $DSWP, which is meant to serve as the ultimate utility token and incentivizer for the DotSwap ecosystem.
Circulating Supply
27,380,620
Distribution
Community
74.958%: Community (to be release over 4 years as mining rewards)
60%: LP reward, allocated to liquidity providers.
48%: Fee Reward — rewards allocated proportioned to trading fees.
12%: Provider Reward — rewards for providing liquidity.
14.958%: DAO governance funds.
Initial Liquidity Pools
2.292%: $DSWP initial liquidity pool.
The initial liquidity pool consisted of 1.3 BTC and 2.292% (13,440,310 $DSWP) is created through funds raised by community.
The 13,440,310 $DSWP was first sent to address bc1p4h5vfnxfm88kfxmsnwrwxckmrfq3uz2kuum25xt79kd926mf9p5s7r2rf5.
Subsequently, all the $DSWP were provided as liquidity to the DotSwap $DSWP liquidity pool address: bc1pjkwfdqsshs5htcjcccu4y4fq9t8q89knamwa2cxt0429hkaetqgsmvvz2c.
DotSwap took 100% of the raised funds to create the liquidity pool.
Meaning starting price sit at 10 sats/$DSWP.
Check out the full list of initial liquidity contributors here.
Burned
22.76%: Burned tokens are sent to 1BitcoinEaterAddressDontSendf59kuE (a widely recognized bitcoin burn address).
1BitcoinEaterAddressDontSendf59kuE is a a widely recognized bitcoin burn address. All BTC assets sent to this address are rendered inaccessible for spending by any party.
Pre burn DOTSWAP•DOTSWAP LP rewards[Dated]
Overview
97.05% of the total DOTSWAP•DOTSWAP supply are set to be released over 4 years as rewards for the Liquidity Providers and DAO governance funds, with a reward cycle of 144 BTC blocks (≈24 hours).
The details on the release schedule and reward allocation rules may be subject to change as proposed by future DotSwap DAO proposals.
77.68% — LP Rewards
62.14% — Fee Reward: Rewards distributed to trading pairs chosen by the DAO members, and in proportion to the BTC trading fees generated them.
15.54% — Provider Reward: Rewards for simply providing liquidity to trading pairs chosen by the DAO members.
19.37% DOTSWAP•DOTSWAP are reserved as a DAO-managed treasury and stored in a multi-sig address every week.
77.68% Community Reward
We took inspiration from Uniswap and its governance token $UNI, and curated this tokenomics for DOTSWAP•DOTSWAP, which is meant to serve as the ultimate utility token and incentivizer for the DotSwap ecosystem.
Fee Reward
62.14% of DOTSWAP•DOTSWAP (576,000,000) will be allocated and released as reward in the next 4 years. The reward cycle is set at 144 BTC blocks (≈24 hours).
The amount each individual liquidity provider gets is determined by:
Liquidity Contribution: The percentage of the liquidity they provided to a given trading pair;
Fee Share: The percentage of the BTC fees generated by the pair in relation to the total trading BTC fees of all pairs on DotSwap in a reward cycle.
Fee Structure
2% — BRC20 Trading Fees:
DotSwap implements a 0.6% transaction fee for all trades conducted on its platform. This fee is split into two parts:
1.6% — Added directly to the liquidity reserves. This increases the k value of the liquidity pools, meaning the value of all LP positions are also increased, which will eventually be paid out to liquidity providers when they remove their liquidity from the reserves;
0.4% — Reserved for the DotSwap team. This portion is securely stored in a public multi-sig address for transparency and accountability purposes.
See how the fees will be distributed in the LP Reward section.
To ensure long-term sustainability and better support our active community, DotSwap is updating its fee structure from 0.6% to 2%. Our AMM swap now adopts a 2% transaction fee, with 1.6% going to liquidity providers and 0.4% reserved for platform growth.
Provider Reward
15.54% of DOTSWAP•DOTSWAP (144,000,000) will be allocated and released in the next 4 years, with a same reward cycle of 144 BTC blocks (≈24 hours). The Provider Reward is a different set of rewards split evenly by a number of trading pairs, chosen by DAO members through proposals and voting.
The amount each individual liquidity provider gets is determined by:
Liquidity Contribution: The percentage of the liquidity they provided to a chosen trading pair;
The number of trading pairs sharing the reward: DAO members will propose and vote which trading pairs should be granted a share of the Provider Reward.
Additional requirements
Rewards less than 1 DOTSWAP•DOTSWAP will not be released, and will be stored in a LP Reward reserve.
To be eligible for the reward, you must be a liquidity provider for the entire duration of a reward cycle.
If there's no eligible pair to split the reward, the DOTSWAP•DOTSWAP funds will be stored in a LP Reward reserve.
In the extreme cases of cheating, volume faking, or any other forms of conduct detrimental to the ecosystem, the DotSwap team shall reserve the right to withhold the LP Rewards for the trading pair(s) in question.
Example
Suppose you've provided 1 BTC and 1,000 $DOG to the BTC/$DOG trading pair. This contribution makes up 10% of the total BTC/$DOG liquidity pool. Now, if the BTC/$ORDI trading pair accounts for 50% of the total BTC fees on DotSwap during a reward cycle (144 BTC blocks ≈ 24 hours), and if there are 10 trading pairs sharing the Provider Reward, your reward for this cycle will be:
5% of the total Fee Reward, calculated by multiplying your Liquidity Contribution (10%) by the trading pair's Fee Share (50%).
1% of the total Provider Reward, calculated by multiplying the Provider Reward (100%) by your Liquidity Contribution (10%) and then dividing it by the number of trading pairs sharing the reward (10%).
In other words, your reward is a reflection of your contribution to the liquidity pool, the BTC fees generated by your chosen pair and the total number trading pairs sharing the Provider Reward.
19.37% DAO Governance Funds
19.37% of DOTSWAP•DOTSWAP (179,500,000) will be allocated as a DAO-managed treasury, the 0.958% part will be reserved for the DotSwap team. Every DAO member will have a say in how this portion of the DOTSWAP•DOTSWAP funds will be used to help the community and ecosystem thrive.
As mentioned above, the funds will be released in sync with BTC block generation, and will be distributed every week and safely stored in a public multi-sig address.
Last updated
