When the Generation Phase ends and the pools are created, all of the upToken’s supply will be locked into liquidity and no more can be minted. This means the value raised is effectively “trapped” as there will be no circulating coins to sell into the pool.
The sweep function from the ERC-31337 Token Standard is then called to extract the trapped tokens and automatically perform a series of market buys with nearly all of the tokens recovered. Then the newly bought tokens are released to the contributors through a short linear vesting period.
There are 3 Phases to an MGE;
There are also a large number of parameters that can be changed for each MGE:
- Base Token: The token being collected for liquidity.
- Hard Cap: Limit on the amount of tokens that can be collected.
- Soft Cap: Minimum tokens that must be collected for the generation phase to end.
- Time Limit: A fixed time the token collection will end.
- Instant Buys: In the same transaction that mints the supply and creates the liquidity pool all of the collected funds which are used to buy from the pool.
- Buy Rounds: How many rounds of Instant Buys there will be in the same transaction that mints all supply and creates the first liquidity pool.
- Instant Buy Percentages: What percent of tokens contributed to each Buy Round will be used at time of market creation.
- Ref Buy: A small buy that happens before the group buy rewarded equally to Referrers and Referrals.
- Referrer Percent: Amount of the collected tokens to use for the Ref Buy.
- Vesting Period Length: How long until all owed tokens are claimable by the contributor.
To participate in the MGE, users select the Buy Round they want to join and send their funds. Our first MGE for the creation of upTether will have 3 Buy Rounds. In each round a different amount of the contributed funds is used to instantly buy for the contributor.
The split in our First MGE will be as follows, in order of when the Instant Buy happens:
- Ref Buy: Buy with 2% of all raised funds.
- Market Stabilization Buy: Buy with 5% of all raised funds:
- Round One: 30% of contribution used to instant buy.
- Round Two: 60% of contribution used to instant buy.
- Round Three: 90% of contribution used to instant buy.
- Market Stabilization Sell: Sell amount received in Stabilization Buy.
All users in each round pay the same price as everyone else in that round. Users in the earlier rounds receive a better price per token but there is no guarantee which round will be the best to enter.
The Market Pair will be open for trading immediately after the Group Buys happen. Tokens can start to be claimed immediately, the total amount of tokens owed to you will be unlocked at an even rate until the end of the Vesting Period. The vesting period for upTether is 7 days.
When Trading starts there will be almost no circulating supply, everything will either be vested or locked in the uniswap pool. Only referral tokens are not vested, those can all be claimed immediately. The design is intended to create a sell side supply crisis and subsequent large market movement. For the first few hours a high fee will be in place for sells only, it will scale down over time and eventually normalize somewhere under 1%. This feature is implemented to counter-balance bots from automatically selling, triggering a wave of panic selling pressure.
Once the vesting period is over and the sell pressure from MGE participants has stopped, ROOT holders will have decided by vote when to start the next phase.
The remaining funds from the MGE, the Market Stabilization Buy, and collected transfer fees will be consolidated into a liquidity controller contract. ROOT holders will vote on how to use the funds, taking into account things like the base pair of the token and market conditions. For example the strategy applied to upTether will be very different from upBTC or upSUSHI.
Over time the upToken ecosystem will expand to include “up” versions of every token. The data collected and strategies tested from each launch will help refine and perfect unique value increasing strategies only available to upTokens and others who use ERC-31337.