Enosys Tokenomics

Introduction

The design of a healthy cryptocurrency ecosystem consists of multiple vectors, one of which is the macroeconomic design of its native tokens, aka the tokenomics. As the traditional theory of economics and fiat currency regulations do not apply to cryptocurrencies, the dynamics of these systems are typically designed in an ad-hoc fashion, potentially leading to unstable situations and damaging the system as a whole. Ēnosys’ overarching goal is to mitigate potential risks stemming from this arbitrary design of tokenomics. To that end, the design philosophy of Ēnosys’ tokenomics is articulated into the following subgoals, which constitute the backbone of the distribution of tokens presented below.

1. Decentralization: Ēnosys aims to deliver a truly decentralized ecosystem and as such the vast majority of its native tokens are distributed to the community. In fact, Ēnosys distributes to community-oriented purposes 70% and 85% of the two governance tokens, Helion and Apsis, respectively.
2. Sustainability: Ēnosys’ objective is to deliver an ecosystem that is viable in the long-term, thus calling attention to two vital design principles: first, some of the funds of Ēnosys should be allocated to bootstrap and maintain the cash flow, i.e., to operational costs and investors; second, fail-safe mechanisms against potential financial spirals are necessary in cryptocurrency ecosystems that tend to be volatile. The first principle is easily met by allocating a small but critical percentage to the Ēnosys investors and to expected operational costs. The former was subject to financial negotiations, while the latter was determined through cost projection based on Ēnosys’ previous financial needs to maintain and promote the ecosystem. The second principle, on the other hand, is trickier and demands an elaborate design of fail-safe mechanisms to ensure the viability of the ecosystem. This task is implemented with the APY Cloud of Ēnosys, that is, in a nutshell, a macroeconomic mechanism to maintain a healthy ecosystem via rewarding active governance users. As this component is critical for the longevity of Ēnosys and simultaneously rewards users contributing to decentralization, a significant amount of tokens is reserved for this purpose.
3. Agility: Governance proposals allow users to actively participate and modify the circulation of tokens, e.g., modify the APY Cloud minimum threshold, and therefore directly affect the economic policies of Ēnosys. This is in sync with both goals of Ēnosys for decentralization and agility as the economic policies can gradually be changed on-demand by the users.
4. Reciprocity: A fundamental design principle of Ēnosys is to reward loyal users that sustain the ecosystem. For this purpose the following mechanisms are in place: (i) A significant amount of tokens are reserved in the APY Cloud that will be eventually distributed to active governance stakeholders. (ii) A small percentage of the circulated tokens will be awarded to the users with CAND staked in the EXFI Loans Stability Pool as a “token of appreciation” for their vital contribution so far. (iii) EXFI holders and Ēnosys investors have been the cornerstone for the operation of the company so far and thus will be rewarded accordingly. (iv) Posterior analysis of past Airdrops showcases that the vast majority of users (e.g., as high as 93% in similar cases) sell their tokens immediately as they value more the “free money” they receive than any future participation in the ecosystem. This behavior does not align with the reciprocity principle of Ēnosys, which leverages two mitigation techniques deduced from previous examples: using a vesting schedule for unlocking the tokens and distributing the tokens to a high number of users. We note that both users and investors follow a vesting schedule, to alleviate “pump and dump” schemes commonly found in cryptocurrencies.

The exact distributions of the two governance tokens of Ēnosys, Helion and Apsis, which embody the aforementioned design principles, can be found below. Apart from the four design principles, one guiding rule in the distribution of tokens was remaining consistent with information already presented to the community to continue to foster trust in the ecosystem.

Helion (ex YFLR)

Helion (HLN) is the ecosystem’s secondary Governance token. It has a variety of use-cases, but mainly serves as secondary Governance under Apsis.

Its use-cases include but are not limited to:

• Replacing exchange fees on Ēnosys DEX.
• Secondary Governance under Apsis (APS).
• Voting on new token listings on Ēnosys DEX.
• Voting on new trading pairs on Ēnosys DEX.
• Staking it on Ēnosys Farm.
• Participating in liquidity pools on Ēnosys DEX.
• Participating in Launchpads on Ēnosys Farm.
• Replacing fees on Ēnosys Bridge.
• Providing it as collateral for loans on Ēnosys Loans.
• Providing it as coverage on Ēnosys Mutual.
• Use it in order to trade NFTs on Ēnosys Gallery.

Helion and its available use cases will continue to expand as more products begin to build on the Flare Network, within the Ēnosys ecosystem and beyond.

Helion (HLN) will maintain a max supply of 150,000,000 tokens and by default, does not have the capabilities to mint further tokens. These token distributions will be detailed in the “Token Supply Schedule” section below.

Token Supply Schedule

70% of the Helion tokens will be distributed to the community while the rest will be equally distributed to investors (15%) and to operational costs (15%). In particular, 20% of the max supply will be Airdropped, whereas 31.93% will be reserved in the APY Cloud for future distribution, 0.4% will be awarded to EXFI Loans Stability Pool stakers, 0.67% is reserved for DFLR earned during beta-testing, and 17% will be used at the discretion of the community for various purposes, as illustrated in the table below. A detailed exposition of the distribution can be found below.

Community Airdrop

The production network token DaoFlare (DFLR) will be distributed based on the Helion Airdrop Algorithm outlined in the following section. DFLR allows holders to participate in the Initial DAO Offering (IDAO) for Helion (HLN). The IDAO is a period where holders of the valueless DAO Claim Token, DFLR, can claim Helion 1:1. The max supply of Helion tokens will be 150,000,000 with a precision of 18.

Once distributed, DFLR on the Flare network will utilise a unique token design which will enforce a 30 day window in which DFLR can be burned to claim HLN. At the expiration of the 30 days, any remaining DFLR will automatically be removed and the claiming contract of that month will be locked, effectively burning any unclaimed HLN. This means the total circulating supply of Helion will vary based on the number of participants who claim the free IDAO.

Helion Airdrop Algorithm

The objective of the airdrop algorithm is multifaceted: the first goals are to reward previous contributions and foster future engagement within the Ēnosys ecosystem. Concurrently, the airdrop aims to provide incentives for high system utilization by bestowing rewards on users who generate revenue for the Ēnosys ecosystem, thereby enhancing the overall functionality and robustness of the ecosystem. To realize these objectives, we outline below the specific algorithm implemented for the Ēnosys Helion (HLN) airdrop.

Initial airdrop

The fundamental concept involves capturing a snapshot of EXFI token holders and their utilization patterns, which will subsequently be used for the first distribution of tokens. Specifically, during the initial airdrop, 26.67% of the community airdrop tokens, equating to 8M HLN, will be distributed as DFLR. All of these 8M tokens will be immediately spendable.

The precise initial airdrop quantity allocated to each EXFI holder will be calculated using the following static multipliers, measured by the number of tokens in the corresponding Ēnosys protocols (as captured by the snapshots):

• EXFI in personal wallets = 1x
• EXFI in staking (Single side Farm Pools, Governance, Loans staking) = 1.25x
• EXFI in Loans as collateral = 1.5x
• EXFI in Ēnosys LPs = 2x (due to being paired with equal value)

The objective of the initial airdrop is to acknowledge the users who have participated in the Ēnosys ecosystem so far and to give an advantage to those who have been actively participating. This is done with the aim of enhancing the trust already vested in the Ēnosys platform.

Monthly airdrops

The remaining 73.3% of tokens, which corresponds to 22M Helion tokens, will be distributed as DFLR based on different metrics. The aim is to disburse an equal quantity of 2M tokens each month from the remaining allocation, thus completing the distribution of the total 30M Helion tokens over a 12-month period.

These airdrops have three primary objectives: (i) to stimulate active engagement of Helion holders in the Ēnosys platform, (ii) continue to stimulate active engagement of EXFI holders on the Songbird Network, and (iii) to promote and reward users who generate revenue for the Ēnosys ecosystem, thereby actively contributing to the APY Cloud, which ensures the financial stability and vitality of the ecosystem. To meet these goals, monthly airdrops will be distributed as follows:

Quarter 1:

75% (1.5M DFLR) distributed based on a randomly selected HLN snapshot within the month, weighted using the following static multipliers:

• HLN in personal wallet = 1x
• HLN in Staking (Single side Farm Pools, Governance, Loans staking) = 1.25x
• HLN in Loans as collateral = 1.5x
• HLN in LPs = 2x (due to being paired with equal value)

25% (0.5M DFLR) distributed based on a randomly selected EXFI snapshot within the month, weighted using the following static multipliers:

• EXFI in personal wallets = 1x
• EXFI in Staking (Single side Farm Pools, Governance, Loans staking) = 1.25x
• EXFI in Loans as collateral = 1.5x
• EXFI in LPs = 2x (due to being paired with equal value)

During the first quarter following the initial airdrop, the Ēnosys team will be monitoring the platform expansion and analysing fee based revenue generation. Once the full platform is brought online and platform usage has exited the initiation phase, a portion of the monthly airdrop will be allocated based on user fee generation during the preceding month. The first allocation to fees will encompass fees from platform launch through that snapshot date. The amount of DFLR allocated to fee generation will be capped at 50% of the value of total fees generated, not to exceed 25% of the total monthly airdrop. The remainder of the airdrop will continue to be split 75/25 between HLN and EXFI holders.

Quarters 2–4:

Up to 25% (<0.5M DFLR) distributed to users who generated fees for the Ēnosys ecosystem during the month (via Bridge, DEX, Gallery, Simple Stake, and Loans), weighted based on the USD value of the generated fees.

After the amount of DFLR to be distributed based on fees has been calculated, the remainder of the monthly 2M DFLR will be split 75/25 between the HLN and EXFI snapshots.

75% of the remainder(2M — a. generated fee share) distributed based on a randomly selected HLN snapshot within the month, weighted using the following static multipliers:

• HLN in personal wallet = 1x
• HLN in Staking (Single side Farm Pools, Governance, Loans staking) = 1.25x
• HLN in Loans as collateral = 1.5x
• HLN in LPs = 2x (due to being paired with equal value)

25% of the remainder(2M — a. generated fee share) distributed based on a randomly selected EXFI snapshot within the month, weighted using the following static multipliers:

• EXFI in personal wallets = 1x
• EXFI in Staking (Single side Farm Pools, Governance, Loans staking) = 1.25x
• EXFI in Loans as collateral = 1.5x
• EXFI in LPs = 2x (due to being paired with equal value)

We anticipate that this airdrop algorithm will ensure suitable incentives and foster sound financial practices among Ēnosys token holders, promoting the ecosystem’s overall long-term utilization and health. By limiting our supply and rewarding the high utilization of the Ēnosys platform, the Helion token is projected to operate as a valuable utility token, contributing to the ecosystem’s health.

APY Cloud

The 31.93% of tokens reserved in the APY Cloud will be distributed to the users that stake their governance tokens when the ecosystem’s health is at risk or, in other words, when the APY of the pool drops below the minimum threshold. The Ēnosys team, alongside its academic arm, will initially define the minimum APY threshold. The community can then alter the minimum APY through a governance vote.

Foundation

The Foundation pool of tokens is designated for ecosystem-related purposes, such as grants, incentives, and other community growth initiatives. Any token grants from the Foundation to developers building tools or additional protocols around the APY Cloud, will be granted through governance voting and dispersed based upon the completion of milestones approved by the Community. These tokens are anticipated to be distributed over a ten-year period:

• 5,000,000 Helion available initially to support current and future ecosystem projects, grants, and other community growth initiatives voted via community governance.
• 5,000,000 Helion available initially to support the Ēnosys Foundation growth initiatives.
• 1/120 of the remaining tokens for the community and the Foundation are anticipated to unlock each month for the next 10 years.

Core Contributors and Investors

All investors and current core contributors are subject to a three-year lock-up schedule, excluding staking rewards if applicable, from mainnet launch that unlocks according to the following schedule:

• No Helion available for the first twelve months.
• 2/36ths of such tokens unlock on the 13th month after mainnet launch, and each month after that up to and including the 24th month.
• 1/36th of the tokens unlock each month after that, beginning on the 25th month after mainnet launch so that all such tokens are unlocked on the third anniversary of mainnet launch.
• Investors cannot stake Helion into farming pools until the end of the 12-month cliff period and are advised not to stake until the end of their vesting period (i.e., 3 years). They are, however, advised to utilize their tokens for the purpose of governance to have a healthy and growing ecosystem.

Operating Expenses

By operating the Experimental Finance suite, our team identified ongoing capital needs such as development costs, market making, and supporting various initiatives. Initially, the team will distribute capital for market-making purposes and fundraising to support product development and community expansion. These tokens will be available on-demand for operations needs and will not follow a vesting schedule.

DFLR Holders

1,000,000 DFLR (0.666% of the max supply) were distributed as beta tester rewards on the Songbird Network, meaning 1,000,000 Helion from the max supply will be available for claiming to the beta rewards holders on the Songbird Network alongside the Community Airdrop. This claim will be facilitated through a separate Snapshot and Airdrop specifically for Songbird DFLR holders. This snapshot will only capture DFLR which is held in personal wallets, so please ensure that your DFLR is not being utilised in a contract as that DFLR will be ineligible for the snapshot and airdrop. Once DFLR has been distributed on the Flare Network and the 30-day claim window has initiated, DFLR on Songbird will have no further use.

Loan Holders

0.4% of the max supply will be distributed to those who participated and will participate in the EXFI Loans Stability Pool to fix the EXFI Loans system issue unless the stability pool has been liquidated by the time of the snapshot. If the EXFI Loans Stability Pool is liquidated before the snapshot, then the 600,000 HLN allocation will be returned to the APY Cloud reserve.

A Note to Oryy Wallet Users

Oryy multisig wallets use contract addresses and are therefore not continuous across networks. This means that an airdrop sent to the same address on Flare where the snapshot was taken on Songbird will not be accessible by the same user. To compensate for this issue, we will be releasing a method for Oryy wallet users on Songbird which will allow them to provide a Flare address to which they would like to receive any airdrop associated with a snapshot of their Songbird Oryy wallet. It is essential that Oryy users complete this process if they would like to receive their DFLR airdrops.

Anticipated Circulating Supply Changes

Ēnosys consists of multiple products operating in various chains, many of which may affect Helion circulation. Moreover, the agility and decentralization principle in Ēnosys’ design, although highly desirable, leads to an ecosystem that is highly influenced by its users in unpredictable ways. Nevertheless, specific actions enabled in the Ēnosys ecosystem predictably affect the Helion supply, such as the following:

• The circulating supply will increase as DFLR token holders utilize DFLR to claim Helion.
• When the APY is below the minimum threshold, meaning that the ecosystem fees are very low in comparison to the staked Helion tokens, Helion (from the APY Cloud reserve) will be distributed to governance stakers to make up the deficit, thus increasing the circulating supply.
• The Helion supply is heavily affected by the rewards of each product in the ecosystem. As all rewards and reward mechanisms are also modifiable via on-chain governance, governance can significantly affect Helion circulation.

Apsis (ex YFIN)

Apsis (APS) is the ecosystem’s primary Governance and rewards token. It has a primary focus on service across the entire ecosystem and maintains a higher authority in swaying the outcome of various forms of Governance proposals in the ecosystem. Unlike HLN, it cannot vote on new token listings and trading pairs on the Ēnosys platform. Additionally, it does not serve as a fee replacement token on Ēnosys DEX nor Ēnosys Bridge.

As the primary Governance token, APS allows its holders to engage in voting on protocol-related operational changes. Beyond Governance, it serves as the primary rewards token on Ēnosys Farm.

Once farmed, APS, has several use cases within the Ēnosys ecosystem including, but not limited to:

• Primary Governance over Helion (HLN)(1:10,000).
• Participating in liquidity pools on Ēnosys DEX.
• Staking it on Ēnosys Farm to earn more Apsis (APS).
• Participating in Launchpads on Ēnosys Farm.
• Providing it as collateral for loans on Ēnosys Loans.
• Providing it as coverage on Ēnosys Mutual.
• Use it in order to trade NFTs on Ēnosys Gallery.

Apsis and its available use cases expand as more products are built on the Flare Network within the Ēnosys ecosystem.

Apsis will maintain a max supply of 15,000 tokens and by default, does not have the capabilities to mint further tokens. These token distributions will be detailed in the “Token Supply Schedule” section below.

Token Supply Schedule

The production network token Apsis (APS) will be distributed as follows (also illustrated in the table below): 55% to farming pools and other product-related incentives, 20% to APY Cloud reserves, 10% to community reserves, 5% to investors, and 10% to operational costs. The max supply of the Apsis tokens will be 15,000 with a precision of 18.

We emphasize that the majority of the max supply (55%) are dedicated to farming pools and will be distributed through incentive mechanisms. Therefore, the amount of the circulating supply heavily relies on the users of the ecosystem. These tokens will be available as soon as the DEX and Farms are launched on the Flare Network.

10% of the max supply is planned to be distributed during the first year. Changes to the distribution schedule may be necessary based on the ecosystem’s expansion, as the addition of protocols, pools, and chains may require additional incentive disbursements.

APY Cloud

The tokens reserved in the APY Cloud will be distributed to the users that staked their governance tokens when the health of the ecosystem is at risk, or in other words when the APY of the pool drops below the minimum threshold. The Ēnosys team alongside its academic arm will initially define the minimum APY threshold. The community can then alter the minimum APY through a governance vote.

Foundation

The Foundation pool of tokens is designated for ecosystem-related items, such as grants, incentives, and other community growth initiatives. Any token grants from the Foundation to developers building tools, or additional protocols around the APY Cloud, will be granted through governance voting and dispersed based upon the completion of milestones approved by the Community. These tokens are anticipated to be distributed over a ten-year period:

• 750 Apsis available initially to support ecosystem projects, grants, and other community growth initiatives now and in the future for the Community category distribution subject to Community Governance Voting.
• 1/120 of the remaining tokens for the community and the Foundation are anticipated to unlock each month for the next 10 years.

Core Contributors and Investors

All investors and current core contributors are subject to a three-year lock-up schedule, excluding staking rewards if applicable, from mainnet launch that unlocks according to the following schedule:

• No Apsis available for the first twelve months.
• 2/36ths of such tokens unlock on the 13th month after mainnet launch, and each month after that up to and including the 24th month.
• 1/36th of the tokens unlock each month after that, beginning on the 25th month after mainnet launch so that all such tokens are unlocked on the third anniversary of mainnet launch.

Operating Expenses

By operating the Experimental Finance suite, our team identified ongoing capital needs such as development costs, market making, and supporting various initiatives. Initially, the team will distribute capital for market-making purposes and fundraising to support product development and community expansion. These tokens will be available on-demand and will not follow a vesting schedule.

Product Incentives

The remaining 55% of the token supply will be distributed over a 5-year period to provide platform incentives for various products. This pool will provide the primary incentive for all products linked to the APY Cloud, regardless of the underlying blockchain network. This means that Apsis may be bridged off of the Flare Network to provide platform incentives on other connected blockchains, but would need to be bridged back to the Flare Network to participate in Governance and the APY Cloud.

Anticipated Circulating Supply Changes

Ēnosys consists of multiple products operating in various chains, many of which may affect the Apsis circulation. Moreover, the agility and decentralization principle in Ēnosys’ design, although highly desirable, leads to an ecosystem that is highly influenced by its users in unpredictable ways. Nevertheless, specific actions enabled in the Ēnosys ecosystem affect predictably the Apsis supply, such as the following:

• As DFLR token holders utilize DFLR to claim Helion and stake it to receive Apsis through various mechanisms, the circulating supply will increase.
• When the Apsis APY is below the minimum threshold, meaning that the ecosystem fees are very low in comparison to the staked Apsis tokens, Apsis (from the APY Cloud reserve) will be distributed to governance stakers to make up the deficit, thus increasing the circulating supply.
• The Apsis supply is affected by the rewards of each product in the ecosystem. As all rewards and reward mechanisms are also modifiable via on-chain governance, governance can significantly affect Apsis circulation.

Conclusions

Ēnosys is one of the few cryptocurrency ecosystems that aimed to design its tokenomics based on solid design principles, conducting preliminary research and leveraging “lessons learned” regarding the sustainability and economic viability of previous token launches. Despite the ad-hoc nature of determining the token distribution in general, our team in collaboration with our academic partners contemplated (i) historical and statistical data, (ii) Ēnosys’ four design principles: decentralization, sustainability, agility, and reciprocity, and (iii) Ēnosys past promises to the community to maintain the trust of our users and contributors, to deliver the aforementioned distribution of tokens. This updated tokenomics can also be seen on our existing whitepaper here.

Disclaimer

THIS IS NOT AN OFFERING OR THE SOLICITATION OF AN OFFER TO PURCHASE TOKENS. THIS DOCUMENT CONTAINS HYPOTHETICAL, FORWARD-LOOKING AND PROJECTED FIGURES WHICH ARE NOT GUARANTEED; ACTUAL NUMBERS MAY VARY. ENOSYS MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE COMPLETENESS OR ACCURACY OF THIS PRESENTATION AND IT IS SUBJECT TO CHANGE WITHOUT NOTICE.