Community Offering and Tokenomics Update: A Closer Look
Hello Fellow Magnets!
We are excited to update our community with a detailed launch roadmap for Magnet DAO!
This Medium article highlights everything you need to know about our:
- Discord List
- Community Offering
- Fair Launch
- Launch Date
- Use of Proceeds
- Security, and more
If you’re new here, Magnet DAO is a crypto incubator, based on the OHM reserve currency model, that uses a portion of its treasury to cultivate, incubate, and invest in early-stage crypto projects. For more background on our project and vision — please refer to our Intro to Magnet DAO Medium article.
Our community is unbelievably strong and grows by the day. Magnet DAO has 12,000+ Discord members, 5,000+ Twitter followers, partnerships with a number of high profile projects, and support from key figures. We appreciate all of the support thus far and are grateful for all of the contributions we have received from the community.
We designed our structured launch model to give everyone a fair shot while rewarding our most passionate users for joining us early.
We’ve been getting many questions in Discord. This article attempts to answer the majority of them. If we missed any, please ask in our Questions channel in Discord, or view our FAQ on our website https://www.magnetdao.finance/ in case it’s already answered there.
In the meantime, mark your calendar for December 7th at 5:00pm UTC!
— The Magnet DAO Team
The Problem With Current Launch Models
Stealth LP Pools (Common for OHM Forks)
Stealth LP pools reward bots, insiders, and whales. Although these select individuals achieve anywhere from 10x to 50x, everyone else is left buying a token that has run up tremendously.
This causes a significant ownership imbalance, creating numerous whales on day 1 who often look to take profit given their low entries. These stealth LP pools also lead to heavy token inflation due to the unnecessarily high bonding discounts early on.
Whitelists often have very unclear guidelines on how to gain access. They force fake interactions on Discord and result in people begging for access.
Pre-sales frequently have unfair allocations, including restrictive lists and discounted prices (or increased allocation) for team and “contributors”. These discounted prices and team allocations are often “black boxes” — they are hidden / not disclosed to the public, and the pre-sales often sell out very quickly leaving most of the community unable to participate. This structure also results in an imbalanced distribution of tokens, with a small number of holders owning most of the network.
We have unfortunately seen a number of rugpulls occur recently, including multiple OHM forks. These forks did not have multi-sig contracts in place, tokenomics were ambiguous, contracts were not public, etc. etc. Magnet DAO aims to be as transparent as possible with everything we do. This includes peer reviewed code, multi-sig contracts, budget for Tier 1 audits, open-source smart contracts, pre-defined token allocations with 0 ambiguity, confidential KYC via RugDoc, and a team that prides itself on answering questions posed by the community.
A Better Launch Model
The Magnet DAO Team carefully considered all the issues mentioned above and has designed a launch model aimed at promoting (i) transparency, (ii) fairness, and (iii) community.
Community Offering (December 7th, 5:00pm UTC)
Contract has been peer reviewed by 2 unaffiliated, experienced developers. We will also be submitting a RugDoc once the contract is uploaded, prior to the Offering.
- 2M tokens for sale (20% of initial total supply)
- Sold at a fixed price of $0.80 per token
- Max contribution of $500 per person, which increases to $4,000 over the course of an hour
- Only available to those on the Discord List (see “How can I get on the Discord List?”)
- Proceeds used to propel near-term growth: top tier audits, marketing budget, and $ to bring on additional top-tier blockchain developers
Fair Launch (December 27th, 5:00pm UTC)
- 4.0M tokens for sale (40% of initial total supply)
- Price is dynamically determined by amount contributed — more details to come in the coming days / weeks via a separate Medium article. We have a lot of unique ideas for how to structure this launch and are firming up the details
- ~45 hour launch
- Max contribution of $50,000 per person
- Available to anyone who wants to participate
- All proceeds go to our treasury — allowing us to launch with a substantial treasury and a low market cap / treasury ratio to begin with
Protocol Launch (December 29th, 5:00pm UTC)
- Protocol will launch ~3 hours after the fair launch is completed
- The proceeds from the fair launch will go directly to our treasury
- We will then add liquidity to Trader Joe and launch the protocol, allowing staking and bonding
Why are you doing two rounds?
First Round (Community Offering):
This sale is akin to a pre-seed or seed round for a private company. These rounds are standard for early-stage projects, and are used to help teams enter growth mode. The community sale will distribute our network amongst a large number of passionate investors while allowing them to get access to tokens at a favorable price. The amount we are raising is a small amount in the grand scheme of things, but it will allow us to propel Magnet DAO forward in the near-term, putting us at a significant advantage over competitors. We will be able to get top-tier audits, put forward a proper marketing campaign, and bring on additional blockchain developers to ensure our protocol is in pristine condition for when we launch.
Instead of raising from VCs, we decided to raise from our community. We believe crowdfunding will become much more commonplace in the future and hope to spearhead unique launches like this for our future incubated projects as well.
Second Round (Fair Launch)
Most OHM forks have started with stealth-LP launches, which as we discussed earlier are unfavorable for many reasons. Our fair launch will allow us to build a treasury without diluting value for tokenholders. Essentially, it’s as if everyone minted MAG right away on day 1, but instead of having a hectic couple of hours after launch with discount fluctuations and whales / bots getting the best prices, we want to do a fair launch where everyone is bonding at the same time, at a valuation that is fair and transparent to the community.
Other OHM forks have been launching quickly, why is it taking you so long?
OHM is an extremely complex protocol. While it is very simple to fork and launch a “working” product quickly, it takes time to thoroughly understand the code and to innovate upon it. Safety of our users is our number one priority, especially after all that has happened in the last few weeks. Here are some considerations:
- Peer review — we are actively getting our code peer reviewed to ensure safety
- Audits — we want to make sure our code is thoroughly audited by the best auditors before launching
- Multi-sig — everything done by our protocol will involve multi-sig contracts. No native multi-sig UI exists on Avalanche so it takes time to build out these mechanisms
- Parameters — most forks launch quickly and use the same code as OHM or TIME without understanding how to properly adjust bonding mechanics. These parameters are absolutely critical to ensuring the protocol’s health, and to prevent pump and dump price action
- Launch — we are building our own launch contracts and developing novel launch mechanics from scratch for both our Community Offering and fair launch
- Tokenomics — we have taken extensive community feedback to ensure our tokenomics are fair and sustainable for both our tokenholders and team in the short and long term
- Innovation — we don’t just want to launch a simple OHM fork as we don’t see any value in that. We are building unique features into the protocol which take time
Community Offering — Important Things to Know
Note: The fair launch is planned for December 27th and more details will be released in the coming weeks. All Q&A below is in reference to the Community Offering.
How can I get on the Discord List?
We took a snapshot of our Discord on November 30th at 2:00am UTC. If you were in our Discord at the time this article was posted, all you need to do is to head over to the channel #verify-bot on our Discord server and use the command !magverify, our bot will then DM you to register the address you plan on using during the Community Offering. You need to get your address registered by the bot before December 6th at 8:00pm UTC to be eligible for the Community Offering.
When is the Community Offering?
The offering will take place on December 7th at 5:00pm UTC. The contribution cap will increase every 15 minutes for 1 hour. The offering will go on for 24 hours, or until all available aMAG is sold.
What is aMAG?
aMAG is an NRT token (Non Transferable Token) which means it cannot be transferred or used to supply liquidity — it can only be redeemed. aMAG will be redeemable 1:1 for MAG directly prior to launch. The reason we are using an NRT token is to prevent non-approved liquidity pools from being launched prior to our official listing, which we have seen become an issue in other projects.
How much can I contribute?
The maximum allocation per person starts at $500 and doubles every 15 minutes, until a cap of $4,000 per person is reached (this would be 1 hour after launch, if we are not sold out by then).
Am I guaranteed an allocation?
No — the launch is first come, first serve. It is possible that we sell out in the first round, so not everyone is guaranteed an allocation. The launch is set up to try to ensure that everyone gets some amount of allocation, but we recommend you are at your computer or phone and are ready to contribute when the launch starts / at every subsequent increase in contribution cap.
Which stablecoin do I contribute with?
The community sale will be done using MIM, which can be purchased on Trader Joe.
Standalone MIM token address: 0x130966628846bfd36ff31a822705796e8cb8c18d
How many tokens are for sale?
We will be selling 2M tokens, which is 20% of initial total supply
How much is each token?
aMAG will be priced at $0.80 per token. Thus if all 2M tokens are sold, we will have raised $1.6M. This values the protocol at $8M on a fully diluted basis. Note that the $8M FDV includes 45% of tokens, which when sold, all proceeds will go to our treasury, adding a substantial floor to the $8M valuation.
How is it structured?
A total of 2 million aMAG tokens will be up for grabs during the Community Offering. aMAG will be redeemable, 1:1 for MAG, prior to our public launch.
2 million aMAG available, offered at $0.80 per aMAG. Contribution cap begins at $500 per person, doubling every 15 minutes until a contribution cap of $4,000 is reached (1 hour later). The offering will then be open for another 23 hours if it is not sold out by then.
Only those on our Discord List will be able to participate in the Community Offering.
Why did you structure it this way?
We felt that $1.6M was an appropriate amount and that $8M FDV was fair. With these two parameters set, it became an optimization equation for two things:
- Sell out the launch
- Allow for as many participants as possible
The truth is — we don’t know how many people will participate so it was difficult to come up with a contribution cap. If we set the cap too high, it will be a race to contribute and a lot of members might not be able to get allocation. If we set it too low, maybe we undershoot and don’t sell out.
So what did we do? We decided to make a dynamic cap, which starts at $500 per person and increases to $4,000 per person over time.
Use of Proceeds and Tokenomics
What will you use the proceeds from the Community Offering for?
The use of these proceeds will be as follows:
Initial Total Supply of 10M MAG broken down as follows:
Community Offering — tokens will be in the form of “aMAG”, redeemable directly prior to public listing
Fair Launch to Build Treasury — tokens will be in the form of “aMAG”, redeemable directly prior to public listing
Team Tokens — tokens will be locked and vested linearly over 1 year, strategically designed to save allocation for new team members as the team expands
Liquidity Providing — tokens set aside for providing LP. Given our protocol is designed to self-sustain LP, it’s not necessary for this number to be very large
Airdrop — The airdrops can be broken down into 4 distinct tiers, and they are as follows:
First 500 Members: Early members of our community: 25/50 MAG airdrop (depending on invites) 🧲
Diamagnets: Magnetic community member (25 Hz magnetic field) : 250 MAG airdrop 🧲🧲
Paramagnets: Attractive and Magnetic member (100 Hz magnetic field) : 500 MAG airdrop 🧲🧲🧲
Ferromagnets: Dangerously magnetic, (1000 Hz magnetic field) : 1000 MAG airdrop 🧲🧲🧲🧲
We know everyone can invite bots or make recycled memes or spam a chat, We will reward real contribution. The trusted members will decide together who gets in, not the core team. Some things we are looking for:
1️⃣ Participate in AMAs, suggest projects on project-suggestions
2️⃣ Reach out to communities and Content creators. If you are a content creator make content for us
3️⃣ Invite communities and welcome new users
4️⃣ Offer suggestions and feedback
5️⃣ Support the project on twitter
Please be aware that there is a possibility that fake MAG tokens are created. Do not buy anything that is not posted on our official socials / website. The date, time, and contract address will all be very clear. We are not going to be stealth launching and you will know well in advance when our offerings and launch are. Please also be aware that Magnet DAO Team Members will never reach out to you first. Always ensure you have the right token address and website URLs. All information will be posted via Magnet DAO official platforms:
Website — https://www.magnetdao.finance/
Twitter — https://mobile.twitter.com/magnet_dao
Discord — discord.gg/MagnetDAO
Telegram — https://t.me/magnetdao
Magnet DAO cannot be held liable for any mistakes resulting from user negligence and inattention.
Please note: participation in these offerings comes with abundant risk. There is no guarantee your investment will perform well, or that the protocol will be successful. Please only contribute what you are comfortable losing. Our Initial Discord Offering contracts will not be officially audited and thus could be prone to exploits. Crypto is risky in nature and you should always exercise risk management and caution.