New York, March 25, 2020 – CasperLabs, a next-generation, secure and scalable Proof-of-Stake blockchain, is collaborating with BitMax.io, a Singapore registered digital asset trading platform, to conduct its private validator token sale in the form of an Exchange Validator Offering (“EVO”).
Private Validator Token Sale Opportunity
CasperLabs will conduct its validator token sale in collaboration with BitMax.io. The purpose of this Exchange Validator Offering (“EVO”) is to promote greater network decentralization by providing fair access to retail participants at the project’s earliest stage investment opportunity.
$3MM worth of CLX tokens, the native cryptographic token of the CasperLabs blockchain, will be available for sale in the EVO which will be divided into three rounds, with bonus tokens available in the first and second rounds. Registration to participate in the CasperLabs EVO is currently live on BitMax.io with an open funding period from March 23 to April 6.
The price at which EVO participants can purchase CLX tokens is $0.01. This represents a significant discount to the price at which CLX tokens will be distributed via an eventual public sale, where tokens will be auctioned at a minimum bid price of $0.02 per CLX.
|Distribution Round||CLX Price||Bonus Tokens||Minimum Discount to Public Sale Price (including Bonus Tokens)||Circulating Supply Valuation (est. 20% of tokens in circulation in year 1)||Fully Diluted Valuation|
*Note: Public Sale distribution will be conducted via an auction with a minimum reserve price of $0.02.
All EVO participants will be part of the founding stake on the Genesis Block of the CasperLabs network and an integral part of the network launch and initial security.
Rationale for Underlying Sale Structure
CasperLabs has made no token offerings to date and all funding has been conducted via a standard Series A equity financing. The decision not to sell tokens was based on ensuring open access to the underlying system.
Since first introduced, Proof-of-Stake (“PoS”) blockchain networks have historically seen staking dominated by institutions and large token holders (“Whales”). Whales are often early stage investors of a given PoS project with large allocations of tokens vested at mainnet launch. Such concentration of staking power and “Monopolization of Consensus” is troubling because it consolidates control of the blockchain network to a small handful of validators. This can harm the project in various ways, including concentration of voting power, single points of failure for malicious network attacks, and network instability. This runs counter to the proposed aspirations of many PoS to be truly permissionless, decentralized, and secure.
CasperLabs, together with BitMax.io, is taking a novel approach to challenge the status quo of staking power consolidation amongst institutions by conducting the industry’s first EVO.
BitMax.io will operate a full-node at CasperLab’s mainnet launch to facilitate staking support for CLX on behalf of platform users at the “Genesis Block,” thus eliminating the need for retail EVO participants to operate as validators on the network.
While CasperLabs had significant interest from institutional investors to participate in the validator sale, the team insisted on providing open and widespread access to the underlying system at the same terms. Partnership with a top-tier platform like BitMax.io will be fundamental in facilitating that open access to a global user base.
Valuation: Given a total token supply of 10 Billion, the EVO price of $0.01 will value the CasperLabs network at $100MM on a fully diluted basis.
Validator Token Rewards
Three types of token rewards will be associated with the EVO: (1) early participation rewards, (2) staking rewards, and (3) transaction fee rewards.
Early Participation Rewards:
CLX tokens purchased in the EVO will increase by 15% per annum pro-rata (“APR”) of the quantity of tokens. Early participation rewards will begin accumulating from the date the CLX tokens are received by the EVO participant until the CasperLabs’ MainNet Launch, which is anticipated to be in Q3’ 2020. For example, assuming a purchase quantity of 10,000 CLX received on April 1, 2020, with a Mainnet Launch date of August 1, 2020, the EVO participant would see their token holdings increase by 500 CLX (+5%).
The CasperLabs protocol will target a 15% gross yield for the first year post-launch, reducing to 6-7% once CLX distributions are completed over the coming years. The Seigniorage rate to arrive at this will be calculated using the formula: Gross yield (Seigniorage Rate/Percent Staked)/Supply and will be in the low single digits. This means that CLX tokens staked on the CasperLabs network will generate passive yield for token holders in exchange for participation in various consensus mechanisms.
Transaction Fee Rewards:
CasperLabs validators will receive token rewards based on transaction fees collected on the network.
All three types of Validator Token Rewards Rewards will be paid out at the end of an era into a separate rewards wallet address that needs to be provided prior to Genesis. Rewards are tied to the finalization of proposed blocks according to two different (“short-run” and “long-run”) criteria and overall liveness conditions on the platform.