[GIP-2] - GYFI governance token distribution date and Founding Member eligibility

Background/motivation

GIP-2 fires the starting gun on the possible release of GYFI by the Gyroscope community.

In conjunction with [GIP-1] which passed on Dec 9, this GIP aims to finalise key remaining items around initial GYFI token distribution.

As a reminder, the total supply of GYFI is 13,700,000. 2% inflation is currently programmed to start on 20 August 2027. The token contract is deployed on Ethereum here.

Summary of proposal

1. It is proposed that GYFI airdrop will take place no later than 31 January 2025.
2. It is proposed that Founding Member NFT holders are jointly eligible to claim up to 3% of the total GYFI supply.
3. It is proposed that Founding Member NFT holders have the same three lock-up options to claim GYFI as provided by GIP-1. The 3% maximum allocation is available if Founding Members choose Option 3 in [GIP-1], supporting the project long-term.
4. For each of the 4 tiers of Founding Member NFT (Common, Rare, Epic and Legendary) different amounts of GYFI will be claimable. The following distribution is proposed:

Founding Member NFT rarity type	% of GYFI supply	Approximate GYFI count per NFT (under GIP-1 Option 3)
Common	0.280%	50
Rare	0.300%	110
Epic	0.310%	308
Legendary	0.310%	668

Founding Members will be able to benefit from the provisions of GIP-1, meaning that they will be able to lock their GYFI to receive either 40% or 150% more.

It should be remembered that this is not the main reward channel for Founding Members. The main channel is through the automatic boosts to the SPIN earning tier. As a reminder, those with a Founding Member NFT who have also provided liquidity to the project are automatically boosted as follows:

• Participants in any of the Gyroscope stress-tests were automatically eligible to be boosted one SPIN tier
• Holders of ‘Common’ or ‘Rare’ Founding Member NFTs are eligible to be boosted one SPIN tier
• Holders of ‘Epic’ or ‘Legendary’ Founding Member NFTs are eligible to be boosted two SPIN tiers

To take an example: a ‘Common’ rarity Founding Member NFT holder who has LP’d $10,000 USD to the protocol for 3 months, earning SPIN at the 10x rate, and participated in the stress-tests would receive approximately 50% more GYFI than someone who had only LP’d.

5. It is proposed that in total Galxe participants will be eligible to jointly claim c. 2,500 GYFI. It is proposed that these tokens are immediately liquid (though can be locked as per Options 2 and 3 in [GIP-1]).
6. It is proposed that in total 50,000 GYFI is provisioned for a moderator grants scheme where any individual grant has a maximum limit of 5,000 GYFI. The Gyroscope Foundation will decide who is eligible for grants and will share information on how to apply for one soon. Any unused part of this allocation will be returned to the Gyroscope DAO.

Feedback from step 1

In the consultation, four main points were made as feedback:

1. The allocation to Founding Member NFT holders was felt to be too low by some members, and in addition, it was felt that there should be an even greater reward for the rarer founding member NFT types. There were two misunderstandings that we want to set straight:
   1. One, the [GIP-1] boost options are available to Founding Members resulting in larger GYFI amounts of up to 2.5x.
   2. Two, that rarer Founding Member NFTs actually do get a higher individual allocation (because while the 0.25% of supply is the same between groups, rarer groups have fewer members, hence more GYFI per NFT holder).
2. In addition, the updated proposal increases the total allocation to Founding Member NFTs to up to 3% under the 2.5x boost option with further increased allocations to Rare, Epic and Legendary Founding Member rarity types.
3. The allocation to Discord moderators was felt to be too high by some individuals. In response to this it should be noted that the 50,000 GYFI is the budgeted, and for now maximum, amount. It should also be noted that moderators will only be able to receive any allocation from this budget on a case-by-case basis. The moderator allocations aren’t intended to reflect who has a certain discord role necessarily. It’s meant to have a very high bar of active work toward making things run smoothly and growing Gyroscope. It will only be exercised with a very high bar and it’s quite possible the whole allocation won’t be used right now.
4. It was raised that the Founding NFTs reflect a snapshot some time ago and hence recently active participants may not be included. We want to make clear that the window is open for further airdrops to active users into the future, and think this would be a great candidate category beyond just SPIN. Of course if any such airdrop is considered in the future it should take into account sybil risks.

Risk assessment Not relevant.