Shell Governance and Tokenomics - Part 3

Shell Protocol releases Part 3 of their tokenomics.

• 3 MIN READ • Kenny White
  • post
  • tokenomics

(This post is the third installment in a multi-part series. Read Part 1 & Part 2 here.)

TGE approaches. In our previous Tokenomics articles, we explored the details of allocations and the conversion mechanics of the non-transferable $CRAB token. In Tokenomics Part 3, we will go over more specifics, namely: TGE date; details regarding the Shell Foundation and Cowri Labs; token vesting; and the Shell DAO voting process.

TGE Target Date

Currently we expect to hit TGE this December. We look forward to giving the community something to celebrate over the holidays!

Shell Foundation

The objective of the Shell Foundation is to promote the growth and adoption of Shell Protocol. It is currently being set up as a Cayman Islands entity. Not only is Cayman a leading home for web 3 foundations, it also echoes Shell’s island roots in Hawaii.

Just as the Shell DAO will represent the interests of Shell Protocol in the on-chain world, the Shell Foundation will work to promote the protocol in the off-chain world. Among other things, the Foundation will be tasked with handling the creation of the $SHELL token.

Cowri Labs

Cowri Labs is the company tasked with building the software for Shell Protocol. It is distinct and separate from the DAO, the Foundation and the Protocol. Cowri Labs is a for-profit, US-based company that has raised capital from outside investors.

Here are some of the more noteworthy investors in Cowri Labs:

  • Blueyard (seed)
  • IDEO (angel)
  • Stani Kulechov (angel)
  • Ric Burton (angel)
  • Early Shell Community

In total, Cowri Labs has raised $3.6 million.

Note that as an independent company, Cowri does not (nor could it) own or control Shell, a decentralized, non-custodial protocol. The Cowri team built Shell Protocol from the ground up, starting back in October 2020 with Shell v1. Although team members work remotely from different parts of the world, you can occasionally find them co-working by the beach at Shell Hale (pronounced HAH-leh), Cowri's solar-powered Hawaii hacker house.

Vesting

The following stakeholders will be subject to a two-year, linear vesting schedule:

  • Cowri Labs Team
  • Cowri Labs Investors
  • $CRAB holders

For vesting services, we are looking into projects with an established track record, like Sablier. Vesting for $CRAB holders will be autonomous and once initiated, cannot be reversed by anyone. The purpose of the vesting schedule is to gradually increase the circulating token supply. Sudden increases to the token supply could have an adverse effect on the nascent Shell ecosystem. The important thing to emphasize is that everyone will be on the same vesting schedule; investors, core team and community will be treated equally.

The following stakeholders will be exempt from vesting:

  • The Shell DAO
  • The Shell Foundation

The Shell DAO treasury reserve of $SHELL will not be subject to vesting, but will be deployed at the DAO’s discretion. Additionally, the Shell Foundation will retain a reserve of $SHELL tokens, which will also not be subject to vesting.

veShell Mechanics

As mentioned in previous blog posts, the Shell DAO will be based on a veToken model, using vote-escrowed Shell (veShell). DAO members gain votes by staking their tokens to the DAO. The longer these tokens are staked, the higher the voting power. Voting will happen off-chain, probably via Snapshot.

The DAO can formally vote on the following:

  • Setting protocol fees
  • Transferring tokens from the DAO Treasury
  • Minting more $SHELL tokens

These actions will be executed by a multi-sig wallet, where the DAO can nominate signers. A portion of the DAO Treasury will be allocated to incentivize users to stake the DAO.

Tokenomics Part 4

In the next installment, we will discuss the future of Shell’s growth incentives. Currently, protocol incentives are designed using Shell Points. The points system is currently managed by the Cowri Labs team, and will continue like this until TGE. However, post-TGE we will have a DAO and a token, making Cowri’s role in managing points obsolete—but introducing new alternatives.

Join the Shell community!

Twitter: https://twitter.com/ShellProtocol
Discord: https://discord.com/invite/shell-protocol
Telegram: https://t.me/shellprotocol
GitHub: https://github.com/shell-protocol\

Written by
  • Kenny White

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