100M DAO Tokens Locking Based on Price Milestones

Proposals General
1

EXECUTIVE SUMMARY
This proposal addresses an important upcoming issue concerning the Lisk community: whether to keep or burn the 100M DAO tokens. The Lisk team completely overhauled the tokenomics during the migration, resulting in holders receiving half the proportion they had before. The upcoming vote on these DAO tokens could increase dilution to around 62%, from the current 49%. This proposal introduces a method to unlock tokens based on the token price achieving certain milestones, ensuring incentives for token holders and new investors while driving the development of the product.

MOTIVATION
The Lisk community should approve this funding proposal because it provides a balanced approach to managing the 100M DAO tokens. By linking token unlocking to price milestones, it ensures that the token value is maintained and increased, motivating both the community and the development team. This approach helps prevent unnecessary dilution and aligns with the community’s long-term interests.

RATIONALE
This proposal aligns with the Lisk DAO mission and guiding values by promoting responsible token management, encouraging community participation, and driving product development. By setting clear price milestones for unlocking tokens, it ensures transparency and accountability, fostering trust within the community.

KEY TERMS (OPTIONAL)

  • Dilution: The reduction in the ownership percentage of existing token holders due to the issuance of additional tokens.
  • DAO (Decentralized Autonomous Organization): An organization represented by rules encoded as a computer program that is transparent and controlled by organization members.

SPECIFICATION

Technical Details
The proposal outlines a method to unlock the 100M DAO tokens based on the token price reaching specific milestones and maintaining those prices for a month. To ensure fairness and prevent manipulation, we will use a 1-month TWAP (Time-Weighted Average Price) to determine the token price. This approach ensures that token unlocking is tied to the sustained performance and value of the token, benefiting all stakeholders.

Action Plan
Initial Setup: Define and implement the unlocking mechanism on the blockchain.

Price and time to unlock 10M DAO tokens (both conditions must be met):
$7.5 - 01 Jan 2027
$10 - 01 Jul 2027
$12.5 - 01 Jan 2028
$15 - 01 Jul 2028
$17.5 - 01 Jan 2029
$20 - 01 Jul 2029
$22.5 - 01 Jan 2030
$25 - 01 Jul 2030
$27.5 - 01 Jan 2031
$30 - 01 Jul 2031

First Monitoring Price Report: 01 Jul 2025

WHAT DOES IT MEAN FOR LISK?
For the Lisk community, this proposal means a controlled and responsible approach to managing the 100M DAO tokens, ensuring they are only unlocked when the token’s value justifies it. This will help maintain and potentially increase the value of LSK, provide clear incentives for both existing and new investors, and drive continuous development of the Lisk ecosystem. Ultimately, it aligns the community’s interests with the project’s long-term success. If the proposal is accepted, a second vote by the team will be unnecessary because we will keep the tokens, but with price and date milestones.

The planned voting will start on 03 September at 12:00 PM UTC+0 and will last for 1 week until 10 September.

EXAMPLES
Example 1: If the token price is currently $6, the current date is July 10, 2030, and the price increases to $22.5 and holds there for a month, then 80 million tokens will be unlocked immediately.

Example 2: If the token price is currently $30, and the current date is October 10, 2026, tokens will be unlocked over time.

1 Like
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I commend you for your proposal and your ongoing enthusiastic efforts in the community. I hope that my thoughts are conveyed clearly despite the language barrier.

Here are my thoughts on the current value of LSK. The key factors influencing the value of LSK are the circulating supply, total supply, and demand.

Firstly, it’s important to note that 400m LSK have already been issued. For example, both the Lisk page on CMC and CoinGecko list the total supply as 400m LSK. Therefore, it is reasonable to assume that the current LSK value is calculated based on the circulating supply and total supply. From this perspective, it can be said that dilution has already occurred.

Now, let’s consider whether each proposal would further dilute the current LSK value. If the proposal passes, 100m LSK will be allocated to the DAO and unlocked based on price and time. If the proposal to retain 100M LSK is approved, 100m LSK will be allocated to the DAO over ten years.

In both cases, there will be no change in the circulating supply or total supply. Because it is managed by the DAO fund and will not flow into the market. The change would occur only when the funding proposal is passed and the DAO injects funds into the market.

Based on the above, further dilution of value (Decline in ownership ratio) is limited, and it is questionable whether locking by price or time is effective. We believe that the only way to increase value is through the proper operation of the DAO, which will drive the development of the ecosystem and, consequently, increase demand.

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Thank you for your attention.

Regarding the fact that the tokens have already been minted and their price is already accounted for, there are a few points to consider. First, if we burn them, the price will at least rise. How long it will last, no one knows, but if the team works hard, the price will still increase more. However, if the team does not plan to raise the token price and market cap as a result, then there is no point in keeping them at all. Let me remind you that at the moment, 25 million votes (potentially, if they pause it) are controlled by the team and people associated with them (in reality, about 17 million). So they currently have a majority in the vote, which means that no proposal can pass without their participation. I emphasize, at the moment. By the way, the planned vote for September currently foresees exactly this situation: if they are against burning, they can easily prevent it, and if they want to keep the tokens, they can easily keep them. In any case, there will be someone in the community who agrees with them, and the chance of gaining the necessary votes approaches 100%.

It has long been clear to me that it’s either burning or keeping with a price tie.

By the way, dilution was not the main point, but for some reason, you focused on it. If the team truly plans to develop the project not just in words but also for investors, let them show it through action, not just talk. As an investor who had half of my tokens taken away from the total amount, I want to see the price increase; only then will it be proof to me that the team is sincere. Otherwise, it’s all fake.

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How should we approach “token price and market capitalization growth”? The primary strategy seems to be raising awareness and increasing adoption, which is exactly what Lisk is doing right now. Several partnerships have been announced and gone live just a few months after the L2 migration, with positive news emerging from Indonesia and Africa. This could be a result of the migration to ETH L2 and the beginning of reaping the benefits of the ETH and OP ecosystem.
It’s still too early to determine if there are specific plans to raise the token price and market capitalization, as this is an ongoing process.

As you mentioned, a token burn could be an effective way to increase token prices. While the outcome is hard to predict, I believe the impact of a burn is largely driven by investor psychology. Therefore, for the burn to be fully effective, Lisk needs to be a high-profile project. However, I think Lisk is not yet in a position where a burn could be truly effective, given that it has just undergone the L2 migration (this is just my personal prediction).

At the same time, I agree that it’s not fair for Lisk officials to hold significant voting power, as this could easily influence the outcome. Unfortunately, the Lisk community is still quite small, and voting in this situation might not reflect the true opinion of the community.

As mentioned above, I personally think that one idea is to postpone this important “Burn or Allocate to DAO Fund” in order to maximize the effect of the Burn and to ensure fairness in the voting process through community growth.

As a long-term Lisk investor, I, like you, look forward to the project’s success and the potential increase in token price. Let’s continue to support the growth of our community together. Thank you.

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Thank you for your thoughts! I fully agree with you!

@Mona So, how does the official team view this? I think we should postpone the vote on this issue for at least six months.

If we decide to do that, I will postpone my proposal for the same duration.

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I’ve raised the question about postponing in the AMA some time ago, this was the response:

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@przemer I’ve created a new thread about this.

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@grumlin just checking, as the 100M vote is now postponed, would you like to keep this discussion open, or should it be closed for now and reopened at a later time?

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No, it should be open. Maybe someone would like to comment on this or suggest improvements.

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Let me write facts about lisk token price performance:

1 day -4.15%
1 week -9.47%
1 month -9.55%
1 year -9.36%
5 years -13.17%
All time -88.26%

And you still don’t want to burn 100m tokens. I won’t be surprised if you reschedule it again on July 2025 because lack of investors interested in this project.

You can be greedy again and again deciding to take more and more tokens for yourself but you will end up having 100% voting power 0% community and lisk token price at 0.00001 USD.

11

This topic isn’t related to what you were trying to bring up.

P.s. If we’re being honest, which price are you referring to? Against BTC or USD? Even in USD, production has increased more than 40 times, currently around 98%.

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We have the opportunity to read through. It should be open.