Lightlink (LL) Tokenomics

LightLink

• 4 min read

The Lightlink network will be secured via the Lightlink (LL) token, which will be utilised by Enterprises wishing to employ use of the Enterprise mode of operation. In the future a DAO will be established which will grant LL token holders the right to put forward and vote on protocol governance.

Project backers

LL tokens are allocated to promote the long-term stability and growth of the LightLink network. A portion of unissued tokens, 20%, have been allocated to a seed round to raise funds for the development of the network. To mitigate potential negative effects on token price, there is an initial 12-month cliff period for seed investors, after which 5% of their tokens will be released monthly over a 20-month period. This vesting schedule helps ensure seed investors have a vested interest in the ongoing success of the network. Additionally, the team behind LightLink will receive a 17% allocation, which will be subject to a 1-year vesting period and released in a similar manner to seed investors over 20 months.

Additionally, 2.5% of tokens have been set aside for a community airdrop that is planned for Q1 2024.

Staking

Upon launch, LightLink will not rely solely on staking to guarantee the security of the layer 2 network. However, as the focus shifts towards crypto-native applications, staking may be introduced in the future. A portion of the tokens, 8%, will be allocated to a Staking Reserve and will be released gradually over a period of time. The official date for the implementation of staking for LightLink will be announced in the project's roadmap.

To foster a healthy ecosystem for both enterprise and retail users, a significant portion of LL tokens have been allocated to the LightLink Foundation. This allocation will be used for various purposes such as providing incentives, grant funding, supporting the token economy on LightLink, and providing liquidity for LL. The tokens allocated to the foundation will be unlocked on different schedules, all with the goal of stimulating interest and growth on LightLink in the long-term. It's worth noting that upon launch, the foundation will not be operational. Therefore, the tokens will be allocated to a multi-sig wallet and the keys will be transferred to the LightLink Foundation upon its establishment, which is expected to be a year after the network goes live. Despite this, given the need to utilize foundation funds for the ecosystem within the first year of LightLink's operation, a team of individuals working on LightLink will be able to provide LL for grants and liquidity requirements prior to the creation of the LightLink Foundation.

Tokens allocated to the LightLink Foundation will be designated for specific purposes:

One such allocation is the Enterprise Fee Reserve, which accounts for 10% of the total LL token supply. The LightLink platform utilizes both an Enterprise mode and a standard mode, which are both expected to play important roles in the ecosystem. This allocation is intended to provide liquidity for enterprise customers through the use of OTC desks and to offset the cost of gas fees for transactions on the enterprise protocols by utilizing a mint and burn mechanism.

A portion of the LL tokens, specifically 28%, have been allocated towards Ecosystem Partners. This allocation will be used to provide grants and support to projects building decentralized applications on LightLink, as well as to encourage growth within the community and attract established protocols to the platform. Additionally, funding for community events and projects will be considered based on input from LightLink users and community members.

A portion of LL's supply, 5.5%, has been designated for liquidity provision on various decentralized and centralized exchanges. These tokens will be held in a publicly accessible, multi-signature locked wallet, and can be issued as needed. The small initial supply of LightLink may present challenges in terms of trading spreads on various exchanges. These funds will be used to support market makers in reducing spreads and increasing liquidity for LL trading pairs.

Summary

  • 20% of LL tokens are allocated to a seed round for fundraising. These tokens will be subject to a 12-month cliff period for seed investors, after which 5% of their tokens will be released monthly over a 20-month period.
  • 17% of LL tokens will be allocated to the Lightlink team, subject to an 18 month vesting period, and released in a similar manner to seed investors over 20 months.
  • 2.5% of LL tokens will be allocated to the community airdrop planned for Q1 2024.
  • 8% of LL tokens will be allocated to a Staking Reserve and will be released gradually over time. The official date for the implementation of staking will be announced in the project's roadmap.
  • 10% of LL tokens will be designated for the Enterprise Fee Reserve to provide liquidity for enterprise customers and to offset the cost of gas fees for transactions on the enterprise protocols.
  • 28% of LL tokens will be allocated towards Ecosystem Support, which will be used to provide grants and support to projects building decentralized applications on LightLink, as well as to encourage growth within the community and attract established protocols to the platform.
  • 5.5% of LL tokens will be designated for liquidity provision on various decentralized and centralized exchanges. These funds will be used to support market makers in reducing spreads and increasing liquidity for LL trading pairs.
  • 9% of tokens will be reserved for future use on the protocol which may include activities such as ecosystem incentives.