NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, THE UNITED KINGDOM, THE PEOPLE’S REPUBLIC OF CHINA OR JAPAN.
Project Zilliqa, our new scalable blockchain project, has enjoyed tremendous support from our community, partners, early contributors, and advisors. First off, we would like to say thank you to everyone who has supported the project in one way or another. Officially kicked off in June 2017, Zilliqa has achieved ~2,500 tx/s in our internal testnet. This is more than 250 times faster than the existing Bitcoin and Ethereum networks. To sustain the research and development of the project, and facilitate dApp development and adoption of the platform, we are launching a Token Generation Event (TGE) to issue tokens and seeking contribution to the project.
This article provides an informal overview of our Token Generation Event (TGE). For the exact terms and conditions of our TGE, including jurisdiction restrictions and relevant risks, please refer to our formal TGE documents to be separately published on our website.
WARNING: We would like to remind every contributor to only go through Bitcoin Suisse (https://www.bitcoinsuisse.ch/) for making any contribution to Zilliqa’s TGE. Any other channel for contribution is unsupported and a scam.
1. ZIL Token Overview
Tokens in the Zilliqa platform are called “Zillings” or ZILs for short. ZILs only give platform usage rights to the holders to pay for sending transactions and running smart contracts. Zilliqa has a finite supply of 21 billion tokens, of which 60% will be in existence at the TGE.
Before Zilliqa mainnet goes live, interim ERC-20 tokens will be generated and allocated to various parties, including contributors, as detailed in the next section. These interim ERC-20 tokens will be issued to the initial holders and be transferable within 2 weeks after the completion of the TGE. They are expected to be migrated to the Zilliqa mainnet as ZIL tokens in 2018. We will use ZILs in this article to refer to both the interim ERC-20 tokens and the ZIL tokens on our mainnet.
2. Contribution Cap and Planned Use of Proceeds
We have set the cap for our contributors to 48,889 ETH, or US$22mm at a locked rate of US$450 USD/ETH. Our original plans called for a cap of USD $20mm, but due to the significant increase in the ETH/USD exchange rate in late November 2017, we locked the exchange rate at USD 450 per ETH and increased our cap by US$2mm (4,445 ETH) to allow our existing community on Slack, Telegram and early contribution waiting list (before our announcement on 29 Nov 2017) to participate in the TGE.
Our plan for the allocation of the proceeds we receive via the contributions will be allocated as follows:
1) 80% for Zilliqa’s research, development, and its operations (for approximately 3–4 years).
NOTE: Our plan of use of proceeds is subject to change as the project develops and remains subject to the discretion of Zilliqa Research.
2) 15% to award Anquan Capital Pte. Ltd., the company that developed the core technology behind our scalable blockchain and incubated Zilliqa. Anquan has agreed to open source the relevant intellectual property behind Zilliqa.
3) 5% to award the founding team who have been developing Zilliqa.
3. ZIL Token Allocation
The 21 billion tokens will be allocated between the following groups:
Group 1: Mining Rewards
Zilliqa will incentivize miners to grow the network using 40% of the total tokens (8.4 billion). These tokens will not be generated during the TGE, but will be created by miners as part of the mining process over the next 10 years. Once the network is processing a meaningful number of transactions per second, e.g., 500 tx/s on average with an average value of USD 10 per tx, we believe that very small gas rewards (on the order of 0.05%-0.25%) will be sufficient to generously incentivize further mining. Note that 0.05%-0.25% is dramatically cheaper than mainstream payment processing networks, providing much incentive to both users and miners on a sustainable basis.
Due to Zilliqa’s use of PBFT and network sharding, we believe that mining Zilliqa will have a much smaller energy footprint per transaction than other existing protocols. In addition, the variance to mining rewards will be much lower, since for each new block Zilliqa will be able to reward numerous miners whereas in today’s blockchains, e.g., Bitcoin, only a single miner collects the reward.
Group 2: Early & Community Contributions
A maximum of 30% of the tokens (6.3 billion) will be distributed to our early and community contributors after the TGE. Any excess tokens unallocated to any contributor after the TGE will be burned, i.e., permanently destroyed. The tokens will be allocated to our contributors within 2 weeks of the completion of the TGE, and will be transferable thereafter.
Group 3: Company, Team, Agencies
The remaining 30% of the tokens (6.3 billion) will be allocated to various parties as detailed below:
- 10% (2.1 billion) goes to Anquan, which will continue to support the Zilliqa project.
- 12% (2.52 billion) goes to Zilliqa Research, a new entity leading the research, development, community engagement, bounty programs and marketing for Zilliqa.
- 5% (1.05 billion) goes to the Zilliqa team, including founding members as well as future employees (Edited for clarification).
- 3% (0.63 billion) goes to various agencies and advisors, including Bitcoin Suisse.
The tokens in Group 3 are under a vesting plan. They will be distributed on a quarterly basis over a 3-year period. The portion allocated to Bitcoin Suisse is an exception due to our commercial agreement with them. (Edited for clarification)
4. Early Contribution Bonus
We appreciate our early supporters, who contributed early funding, provided connections, and helped with marketing. We have agreed to reward these supporters with 10.0%–15.0% additional “bonus” tokens, depending on negotiated terms. We are still in the process of settling all early contributions, and will disclose the total ETH we have received from early contributors and the overall bonus awarded before we accept any community contributions.
5. Community Contribution
Only members of our Slack channel and Telegram group who joined the respective channels as well as all waitlisted early contributors (before our announcement on 29 Nov 2017) are eligible to participate in our community contribution round. We have invited our community members to pre-register for the community contribution round by December 5, 2017. After pre-screening their eligibility (e.g., removing duplicate applications), we will pass their information to Bitcoin Suisse.
We will determine the amount each community member is allowed to contribute once we have analyzed the pre-registration data. This amount is anticipated to be between 2.5–5.0 ETH. Due to the costs of Know Your Customer/Anti-Money Laundering (KYC/AML), we will not be able to accept less than 2.5 ETH. Only one contribution per real-world identity will be accepted.
We will release more details on the mechanics of the community contribution in the next couple of days, including how and when to onboard at Bitcoin Suisse. We reinforce that Bitcoin Suisse is the only authorized channel for our TGE.
6. ZIL Price
The same ZIL/ETH price will be applicable to both early and community contributions, although early contributions will get bonus tokens.
The formula to calculate the price is 21,000,000,000 * 30% / (48,889 + Total_Bonus).
For illustration, if we receive the maximum of 44,444 ETH from early contributors then their bonus tokens (at 10.0%–15.0%) will correspond to 4,444.4–6,666.6 ETH. If we also receive the maximum 4,445 ETH from our community contribution round then the denominator in the formula will be 53,333.4- 55,555.6, resulting in a ZIL price between 118,124 ZIL/ETH and 113,399 ZIL/ETH.
We will announce the final price once all early contributions are settled.
Please contact us with questions on Slack/Telegram or via [email protected]. We thank everyone for their support! Let’s work together to build a truly successful blockchain platform for high-throughput dApps!
NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, THE UNITED KINGDOM, THE PEOPLE’S REPUBLIC OF CHINA, JAPAN OR IN ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAWS.
The Interim ZILs and the ZILs are not intended to be securities under the laws of any jurisdiction and no action has been or will be taken in any jurisdiction by Zilliqa Research, Anquan Capital, Bitcoin Suisse AG or any of their respective affiliates that would permit a public offering, or any other offering under circumstances not permitted by applicable law, of the Interim ZILs or the ZILs, or possession or distribution of this information or any other material relating to the Interim ZILs, the ZILs or the Zilliqa Blockchain System, in any country or jurisdiction where action for that purpose is required.
The Interim ZILs and the ZILs are not intended to be “securities” under the Securities Act and, for the avoidance of doubt, they have not been and will not be registered under the Securities Act, or any state securities laws of the United States or elsewhere, and the Interim ZILs and the ZILs may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act), except in certain transactions exempt from the registration requirements of the Securities Act.