TeddySwap Tokenomics

We are excited to release the tokenomics for TeddySwap. This article will explain details of our tokenomics as we prepare to launch on mainnet in Q1 2023.

Introduction
TEDY Utility
Tokenomics
Final Remarks

1. Introduction

TeddySwap is an open-source decentralized exchange AMM protocol focusing on stablecoins. Our protocol is developed by former Cardano Foundation developers and the creators of plu-ts, a smart contract framework built to efficiently deploy Cardano dApps.

Up to this point, we have released some technical updates and our official litepaper. Development is strongly progressing and we are planning to launch our v1 DEX on Cardano mainnet in Q1 2023.

As we prepare to roll out TeddySwap, it is a good time to give the first inside look at our tokenomics.

2. TEDY Utility

TEDY token utility is simple and designed to provide value to supporters of the protocol. This will be done through these two primary methods: buybacks and governance.

Buybacks

The TeddySwap protocol will implement a standard trading fee of 0.1% that will be solely for the buyback treasury. Each quarter, the revenue of the TeddySwap protocol will be used to buy and burn TEDY tokens in the open market. Each time a TEDY token is bought and burned, the total number of outstanding TEDY tokens will decrease.

DAO and Governance

TeddySwap is a decentralized autonomous organization (DAO) where holders of TEDY determine the future of the protocol. The TEDY protocol is designed to allow for adjustments, including emission schedule and platform fees.

TEDY tokens represent a 100% governance and revenue-sharing stake of the TeddySwap protocol.

3. Tokenomics

There is a total of five billion (5,000,000,000) TEDY tokens with this amount being decreased via buybacks.

Allocation for TEDY is detailed below from largest to smallest:

Yield Farming: 72.5% (3,625,000,000 tokens)
Team and Advisors: 10% (500,000,000 tokens)
DAO: 5% (250,000,000 tokens)
Developer Fund: 5% (250,000,000 tokens)
Initial NFT Offering (INO): 4.5% (225,000,000 tokens)
Liquidity Bootstrapping Event (LBE): 2.0% (100,000,000 tokens)
Fair Initial Stakepool Offering (FISO): 0.5% (25,000,000 tokens)
Marketing and Airdrops: 0.5% (25,000,000 tokens)

The token distribution is as follows (the below does not include the 72.5% yield farming allocation for easier visualization).

Yield Farming Emissions

The yield farm emission exists to encourage users to provide liquidity to the platform. Liquidity is one of the most important key performance indicators (KPIs) for a new DEX. The yield farm emission will halve every year, for the first 6 years. After that there will be an ongoing tail emission for several years following to ensure the long term sustainability of the protocol.

The yield emission can be adjusted up or down by 25% on any given emission period, thus allowing the platform to provide more yield when needed to encourage users to add liquidity or to offer trading bonuses so more people use the platform. When a lot of liquidity is available and less yield is necessary, the yield can be adjusted downwards to reduce dilution.

Total average yield emission over time is expressed in the following chart.

4. Final Remarks

In this article, we released the first details of the TeddySwap tokenomics. Following this, we will continue to update the community on our development progress along with releasing details on our FISO and INO in the near future.

We thank each and every member of our community for your support thus far and look forward to what we can achieve together.

For more information on TeddySwap:

TeddySwap aims to be an open-source and secure decentralized exchange AMM protocol focusing on stablecoins in the Cardano ecosystem. Our protocol is developed by former Cardano Foundation developers and the creators of plu-ts, a smart contract framework built to efficiently deploy Cardano dApps.

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