Liquity LQTY

Commentary versus actual token vesting

1) Bucket Unlocking & Current Status 100,000,000 LQTY were minted at genesis on 5 April 2021 against a hard cap written into the token contract. As of now, the insider buckets are all vested. Team and advisors (23,664,633 LQTY) ran the longest schedule: zero at TGE, a one-year lock, then one quarter vesting after a year of engagement and one thirty-sixth monthly thereafter — 3.25 years in total, completed mid-2024. Investors (33,902,679), the Liquity AG endowment (6,063,988) and service providers (1,035,367) each carried a one-year lock expiring April 2022. The only bucket still vesting is the community share, and it releases through protocol usage rather than through time. 32,000,000 LQTY were placed in the CommunityIssuance contract at launch and are earned by depositing LUSD into the Stability Pool — the pool that absorbs liquidated debt and receives the liquidated collateral in return. A depositor accrues LQTY in proportion to their share of the pool and the time they remain in it; nothing is claimable by holding LQTY, and there is no staking-for-emissions path. The frontend operator through which a depositor entered takes a cut of that LQTY at a kickback rate the operator sets itself, between 0 and 100 per cent, which is the mechanism by which the protocol funds its own distribution without running an interface. The rate decays on a fixed curve: the undistributed remainder halves every year. Roughly 16 million LQTY were issued in the first year, 24 million cumulatively by the second, 28 million by the third, and so on — an exponential decay that approaches the 32 million asymptotically without ever fully reaching it. Five and a half years from launch, approximately 31.3 million of the 32 million has been issued, leaving under a million to be distributed across all remaining time. The curve is heavily front-loaded by design, to compensate the depositors who took on liquidation risk when the pool was thinnest. Two smaller community sub-buckets are also fully vested: a 2 per cent Community Reserve carved from the endowment, and 1.33 per cent paid to LUSD:ETH Uniswap liquidity providers during the first six weeks after launch only. 2) Communicated & Governance-Approved Changes No modification to any schedule has ever been made, and the supply cap has never been revised. The V2 launch created no new tokens. What is worth recording is that the original terms were enforced by code. For the first year after deployment, the LQTY token contract restricted transfers from the Liquity admin address, permitting transfers only to verified lockup contracts with an unlock date at least one year after deployment.