LIP-22 Tokenomics Revisions for $LIZ Launch and Staking

Authors: Animositas, Lu, Edu Date Created: 8th May 2024

RECOGNITION

Advisors such as Kieran, inDAOwetrust, the current Ethlizards Portfolio Sub-DAO council (Danny, adamdawson.eth, JP | Arcade, Tyrus, and Haitzu), Kent (Directive Games), Andrew Wall (NCM), Lemz, and others were essential in establishing the positioning of the tokenomics changes featured in this LIP.

ABSTRACT

This LIP proposes adjustments to the structure of $LIZ tokenomics following the closure of the seed round capital raise for the Gaming Sub-DAO. If approved, the Lizard DAO Core Contributors would commit to executing the relevant changes on behalf of the DAO prior to TGE.

MAIN CHANGES

Seed Round Closure and Reduction

The Seed Round has now been closed with a reduced raise amount from $5M to a $4M round. The Lizard Labs burn rate will be lower than expected due to lower dev costs for upcoming product builds and so raising unneeded funds in the current environment at the existing valuation is unnecessary. The 5% total token savings will be redeployed to the initiatives below.

KOL Round

Implementation of a KOL Round valued at $25M leveraging 3% of the total token supply. The KOL Round will be held at a higher valuation than the seed but with a shorter lock/vesting schedule. Only long-term, reputable influencers will be included in this round to protect the Lizard Labs brand. The 3% of $LIZ comes directly from 5% of the tokens not used during the seed round.

$LIZ Launch Airdrop

Implementation of an airdrop campaign for targeted Web3 Gaming participants leveraging 4% of the total token supply. The identification of appropriate individuals will be based on a state-of-the-art incentive program using data analytics to identify high-value potential community members. Partner communities will be contacted to inform their holders and participants of the airdrop to allow broader onboarding of new community members into the Lizard Labs ecosystem as $LIZ holders. Current community members are eligible for this airdrop as well if they qualify.

Ethlizards Holder Airdrop Adjustments

1. Increase Holder Airdrop percentage from 7.5% to 8% and remove 0.5% from Yield Farming as offset. Removal of $LIZ staking bonus for Ethlizard stakers.
2. Split Holder Airdrop among three separate events - one at TGE for 4% of token supply, and two others for 2% of token supply within the first year. The airdrops will technically be implemented as a claim through the Lizard Lounge App.
3. The First Claim remains distributed to all Genesis Ethlizard and Venture Ethlizard NFT holders. The Second and Third Claims will be available exclusively to users who stake any Ethlizard Venture or Ethlizards Genesis NFT, incentivizing long-term community participants while also allowing new members to buy and stake and still participate.

Token Allocations

The amended token allocations for Lizcoin will be: Pre-seed – 10% Seed – 20% Holder Airdrop – 8% Yield Farming – 10% Team/Advisors – 17% In-Game Rewards – 5% Public Airdrop – 4% KOL Round – 3% Public Sale – 2% Treasury – 21%

Token Staking & Yield Rewards

Preceding the launch of the Lizcoin token, a staking and yield rewards structure will be implemented. 7% of total token supply (from the yield farming pool) is allocated to stakers who satisfy minimum Ecosystem Participation rewards for regulatory compliance. Key factors that impact the calculation for the yield farming include: · Amount of Lizcoin staked · Duration of staking · Liquidity pool staking (i.e. ETH/$LIZ pairing vs. $LIZ) · *Ecosystem participation threshold met *A minimum level of participation will be required for eligibility for receipt of any participation rewards.

Achieving higher levels of Participation Rewards will make users eligible for the remaining 3% of the total token supply from the yield farming pool. A points based structure will allow participants to earn internal points that provide eligibility for raffled rewards crates on an ongoing basis. Do more and earn more.

Rationale

Due to HIGH demand among influencers in this cycle and an abundance of philosophically aligned partners, more individuals are engaging as influencers in KOL rounds and fewer as angel investors in early stage funding. The KOL round allows a dramatic increase in exposure of the $LIZ token, leading to higher distribution and more value to the protocol.

The Ethlizards white paper was written over a year ago. Since then airdrop campaigns have become industry standard as a consistent way to gain attention in Web3. These allow targeted onboarding of your optimal community through airdrops/claims. Our Public Airdrop campaign iterates on successful campaigns run by GLHFers and Pacmoon with a simple tech implementation process. In addition to that, our unique tech implementation can help us to achieve a targeted campaign that would otherwise only be possible with billion dollar web2 databases and massive spend. We are able to target web3 gamers and investors and directly onboard them into our app using this innovative strategy.

Shifting funds from the yield farming to holder airdrop removes an element of major user experience issues (staking both Ethlizards and $LIZ through the same wallet) as well as minor additional dev complexity. In the design process, there are many use cases that make this structure complex for stakers to participate in and understand the rewards structure. This change keeps the relative value for holders effectively the same. The increase from 2->3 airdrops and the usage of staked Ethlizards holders ONLY further increases the incentive alignment for long-term Lizard Labs community members while allowing the team to provide a cleaner user experience. Additional value to offset the other reduction in yield farming funds will come from additional token value provided by partner studios in an innovative approach that will provide participants the chance to regularly win partner tokens.

The ecosystem rewards structure has been designed to solve for the following:

• Regulatory compliance due to ACTIVE participation requirements
• Rewarding of stakers and large holders who provide needed liquidity for $LIZ
• Incentives for community members to actively participate in high volumes of activities that support the success of the DAO, even for lower $LIZ quantity holders.

Conclusion

This proposal was written with a lot of thought, consideration, and input from advisors and community over the last 5 months. The original tokenomics had a few gaps and does not cover the most recent meta. This proposal enhances the tokenomics to include a KOL round, a major airdrop campaign for marketing, simpler mechanics for Ethlizards staking bonus, as well as introduces a novel staking mechanic that is geared towards regulatory compliance and user participation which generates value to the DAO.