Mainnet CLNY Token Launch Proposal

This proposal is the product of an Advice Process that has taken place over the last couple of weeks, to decide the next steps in the issuance of CLNY following the decision taken in December to halt the sale on Coin Machine.

If you’d like to learn more about the Advice Process, this is a helpful article: Rebellious Practices: Make Better Decisions with the Advice Process

After reading this proposal, we ask you the CLNY holders, to decide whether we should:

A: Yes, proceed with this plan B: No, hold back and figure out something new

Step 1. Conduct Token Launch Auction via Copper Launch

Much like Coin Machine, a Copper Token Launch Auction (TLA) causes price to decrease during low demand, and increase during high demand. Therefore, similarly to Coin Machine, there is no particular benefit to buying at any given point during the sale as it’s impossible to know whether the price will go up or down.

Copper TLAs use a Balancer Liquidity Bootstrapping Pool (LBP) to create a market for the token. Unlike Uniswap, where token weights are 50:50 (e.g. between a project token and a collateral coin), in an LBP it’s possible to have token weights set in favour of the project token at the beginning, and gradually changing in favour of the collateral coin over the course of the sale. This allows a liquidity pool to be bootstrapped with comparatively low initial levels of collateral.

The proposed initial parameters are:

Platform

https://copperlaunch.com

Start

Tue 25th Jan 12:00 UTC

End

Fri 28th Jan 12:00 UTC

Purchase Token

USDC

Initial CLNY

10,000,000

Initial USDC

1,000,000

Start Weights

CLNY 95 : USDC 5

End Weights

CLNY 50 : USDC 50

Swap Fee

2.5% Discourages selling back into the pool.

Starting Price

$1.97 Starting Price is determined by starting balances of CLNY and USDC, and the start weights. It cannot be set arbitrarily.

Here is a link to a model you can use to understand the mechanism better. You’ll also find an explainer video linked in there to guide you through it all.

To learn more about how to participate in a Copper Token Launch Auction, please see here: Auction Participation Walkthrough - Copper

The token that will be sold is CLNY, not Wrapped CLNY (wCLNY). For the price discovery mechanism to work correctly, it’s important that those who have bought tokens during the TLA are able to sell back into the pool. This is necessary because, unlike a Coin Machine sale, a TLA runs for a set amount of time. Where Coin Machine uses time to cool down token prices when the market gets too hot, Copper uses purchasers being able to sell back into the pool to reduce the price of the token.

If the TLA sold wCLNY every buy would increase the floor price, and reduce the downward pressure on the price the weight change throughout the sale is designed to cause. Because this would artificially inhibit market forces, there could come a point where the price is not able to cool down enough to encourage new buyers, ultimately leading to an unsuccessful auction, as well as high risk at the conclusion of the auction when tokens are unlocked.

However, it’s also vital that /only/ tokens that are sold during the TLA can be sold back into the pool during the TLA. If wCLNY was unlocked, Coin Machine purchasers being able to sell into the LBP would be disastrous. It would break the initial price discovery mechanism because anyone who had previously bought at less than the starting price of the TLA would race to dump their tokens at the start in order to get the highest price for their CLNY and push the price down so they could then buy them back again at the lower price. Any unaware auction participants buying CLNY would essentially be rugged due to tokens being dumped into the auction. Furthermore, the collateral (provided by you during the Coin Machine sale) would be fully at risk as a result of the individuals dumping into the LBP. This is crucial advice and comes directly from the Copper team.

Step 2: Airdrop

Airdrop one million wCLNY to wCLNY holders before the end of the TLA.

• 500K will be divided between wCLNY holders proportional to their wCLNY holdings.
• 500K will be divided equally between all accounts holding wCLNY.

Step 3: Unwrap CLNY, DEX Listing

1. ASAP after the TLA concludes trading will be ceased and liquidity will be withdrawn.
2. ASAP after the above, the UI to unwrap wCLNY will be published. We will ideally aim for this to coincide with the above, but there will need to be some margin for error.
3. After allowing a few hours for wCLNY holders to unwrap, we will use the proceeds of the TLA either in part or in whole, to seed liquidity on at least one DEX on Ethereum, and one DEX on Gnosis Chain.

Liquidity Rewards

To coincide with the DEX listings, we aim to start liquidity mining rewards programs via Crucible on Ethereum, and TBD on Gnosis Chain. Crucible allows users to wrap their LP tokens in an ERC721 NFT that is kept in the user’s wallet. The crucible can then be subscribed to the rewards programs for which they are eligible.

Voting

If you support this proposal and want to proceed, vote YES.

If you think we should hold back and take some more time to devise a new plan, vote NO.