PRIME token 🤖
PRIME functions as a utility and reward token in Prime, alternatively referred to as a work token.
Schematic adopted from the Web3 Sustainability Loop, first introduced by Token Engineering community leader Trent McConaghy.
PRIME functions as a utility and reward token in Prime, alternatively referred to as a work token. It borrows from the Web3 Sustainability Loop model in Token Engineering, where a mission-aligned and decentralized builder collective creates value for the ecosystem. The center of this model is that of a loop, where the collective creates value for the token, and the voters of Prime act as curators, either passing or dismissing work proposals submitted to the DAO. Through a recently submitted proposal, PrimeDAO has agreed that in its Growth phase, proposals that increase the utility of the PRIME token will be prioritized. Overall, the Growth phase strategy is oriented around stacking token sinks, where tokens are removed from the circulating supply through either:
- 1.Permanent removal — also known as token burning, where tokens are purchased and removed from the supply forever.
- 2.Temporary removal — many mechanisms fit into this category. Tokens can be locked, or staked, or purchased by and returned to the DAO’s treasury for further use (referred to as “buyback and make”), and by doing so, are removed from the circulating supply
Prime is starting with two token sinks with Lock and LP Manager. But in the future, we can imagine more sinks, such as an embedded fee in the Prime Aggregator that automatically buys and burns PRIME, or common DeFi mechanics like collateralization, where PRIME is locked to mint a stablecoin or other synthetic assets. If PrimeDAO becomes revenue-positive, there’s always the possibility of engaging in open market operations as well to directly increase PRIME’s value — but this depends entirely on the appetite of its decentralized governance body.
A pie chart of the PRIME token distribution.
PRIME distribution can be understood in two ways:
- 2.As a budget breakdown — for what purposes and which groups are PRIME tokens being allocated?
The above pie chart contains the budget breakdown by stakeholder group. The below table details the release schedule, from which the circulating supply over time can be inferred. Further down is a table with detailed descriptions of each token allocation group:
PRIME, PrimeDAO’s utility token, will initially be limited to a total supply of 90M distributed over multiple stakeholder groups. This initial allocation is anticipated to provide sufficient resource coordination capacity for PrimeDAO to reach the Maturity phase.
PRIME tokens are held in a Gnosis Safe multi-signature wallet by the Prime Development Foundation, as delegated by the PrimeDAO in this proposal. Note that the PRIME can be requested at any time by PrimeDAO, and the Foundation is mandated to transfer them at the earliest convenience. This guardianship has been agreed upon as an extra security measure — while there is every technical reason to believe that DAOstack is a safe and reliable framework for Prime to use, it’s important at the early stages of the DAO’s development to take extra precautions, as we cannot expect that the full range of DAO social exploits has been discovered yet. Additionally, if Prime were to move away from DAOstack as its DAO framework of use, or split itself across multiple DAO instances on different frameworks, this guardianship permits more flexibility overall towards effective treasury management.