Vesting mechanism
Gro is decentralising governance by issuing GRO through liquidity mining pools and airdrops . They can be claimed in the Rewards Centre.
When you manually claim GRO from Pools, Airdrops or the Vesting Bonus, you can choose to vest 100% of GRO tokens over 12 months, or get 30% sent to your wallet immediately while forfeiting the remaining 70%. The twist is that you can make a different choice next time you claim new rewards, so you could determine what works best for you at that time.
To track the GRO tokens you hold in wallet and in the vesting contract, head over to How to track GRO tokens for more resources.
GRO tokens are only minted when they leave the vesting schedule for the first time, so the maximum supply increases over time as more users completed their vesting schedule. It's worth noting that users can also choose to relock the portion of tokens that are already unlocked, which would effectively extend their vesting schedule in exchange of claiming a higher portion of vesting bonus (see below). That's why the effective emission is not purely based on how many tokens are being rewarded for various activities, but also depends on individual user behaviour in vesting.
Circulating supply also varies based on the number of tokens that are locked into the vesting mechanism by users who want a higher share of vesting bonus, as well as the token acquired by the protocol's performance fees charged on yield generated. As these tokens will then return to vesting, they would not be part of the circulating supply until a user leaves vesting with these tokens.
Vesting mechanism is implemented to reward long-term committed DAO members who are also engaged. If you’re long-term and continue to stay engaged, then the protocol will reward you with an increased stake in its governance.
If you don't choose to vest at all
The claim is quite straightforward. 30% of what you earned will be minted and go directly to your wallet. The remaining 70% would be given up to the Vesting Bonus Pool, where those who decide to vest can claim every 4 weeks.
It’s not possible to transfer your vesting position once you've received GRO in your rewards centre, so please be mindful of which wallet address you use. If you lose your wallet access, Gro cannot transfer your vesting position to another wallet.
- The first GRO reward you claim starts your personal vesting schedule which lasts for 12 months (the vesting period). Your vesting schedule runs linearly from 0% of your GRO unlocked to 100% one year after the end of your vesting start date. Leave early and get fewer GRO, leave later and get rewarded for your diamond hands.
- Your vesting schedule is for your whole wallet. You can choose to have some claims not going into vesting, but once they are in vesting contract they would go into your current personal vesting contract, increasing your vesting GRO and adjusting your vesting period to end at a later date.
- Your GRO rewards would gradually vest over 12 months. GRO rewards in the vesting contract does not automatically compound on its own, but you can claim additional vesting bonus every 4 weeks. Learn more in Vesting Bonus Pool.
- Here’s the twist: any GRO you give up will be added to the global Vesting Bonus Pool. So those who stay with the protocol can claim the locked GRO of those who leave! Anything that is given up goes back to the remaining more dedicated DAO members to claim. See Vesting Bonus Pool section below to learn more.
- Whenever you claim any kind of GRO reward, your Vesting start date is adjusted based on the weighted average of GRO tokens you just claimed and what’s still vesting. Your vesting end date continues to be 365 days after your Vesting start date.
- Because it’s a weighted average, the bigger the new claim is in relation to your old GRO, the greater the increase in your start date (and the greater the extension to your full vest time). Conversely, if you just make a small additional claim your start date won’t increase as much. This is to prevent sybil attacks with multiple wallets or gaming the system. See the formula below and the worked example in the next section for more details.
Formula for how your vesting start date would change
- Removing assets from Vault, PWRD or Pools will not affect your GRO earned so far and will not affect your vesting schedule either.
- You can exit your vesting completely or partially and move GRO into your wallet whenever you want, but if you exit early then you will lose the portion that has not been vested yet.
Here’s an example of how this might work in practice.
In this example someone claims 1000 GRO at the start on 1st October 2021. The vesting started with an end date on 1st October 2022.
After 6 months the GRO tokens are roughly 50% unlocked. They could exit at 6 months with 498.6 GRO, but in this example they choose to claim another 100 GRO instead.
- This adjusts the vesting start date to be the weighted average of 1st October 2021 (with 1000 GRO tokens) and 1st April 2022 (with 100 tokens). The adjusted start date is thus 1st October 2021 * (1000/1100) + 1st April 2022 * (100/1100) = 17th October 2021.
- The vesting end date is 365 days after the start date to be 17th October 2022.
- Unlocked GRO is calculated based on the current date (say 1st April 2022). To be exact, it would be 1st April 2022 minus the adjusted vesting start date (17th October 2021), then divided by 365 days, and multiplied by the 1,100 total GRO vesting.
After 9 months, the user receives another 100 GRO from an airdrop. Instead of adding that to the vesting contract, the user decided to get 30% in their wallet directly while giving up 70%.
- This means the user would now have 30% of 100 GRO from the airdrop in their wallet.
- As this does not change the vesting contract, there is no change in vesting start date. Accordingly there would not be a change in vesting end date (which is always 365 days after the vesting start date).
- Since another 3 months has gone by, the unlocked GRO has increased from 498.6 GRO to 772.9 GRO. This is calculated by using the current date of 1st July 2022 minus vesting start date of 17th October 2021, then divided by 365 days and multiplied by the 1,100 total GRO vesting.
- When locking more GRO, you can choose to lock GRO you have in wallet OR GRO you have already vested.
- If you choose to lock GRO from your wallet, the vesting schedule changes exactly the same way as above (weighted average).
- If you choose to lock GRO you have already vested, you can only choose to lock all of the vested GRO. This means your vesting schedule will reset to start from today and end in 365 days.
- At any point in time, you may claim your share of the global Vesting Bonus Pool. Your share is calculated as
Your locked GRO / all locked GRO. This means there’s an incentive to increase your locked GRO as you can claim a larger share of the Vesting Bonus. - It doesn’t happen automatically though — you have to click to claim the vesting bonus. After you have claimed a Vesting Bonus you may not do it again until 4 weeks later.
- If you do not claim the vesting bonus, it would not be "reserved" for you to claim at a later date. You may get a smaller amount to claim later on due to two factors: (1) all DAO members can claim from the Vesting Bonus Pool in the meanwhile which would decrease the total Vesting Bonus Pool, (2) your vesting GRO would continue to vest, meaning the locked portion would go down and thus your share of the Vesting Bonus pool may lower as well. The exact change depends on other users' actions, so it is not possible to predict exactly how your claimable amount would change over time.
- Vesting Bonus Pool size is determined by how many tokens other users forfeit when they skip vesting or leave vesting early.
- Another source of $GRO in Vesting Bonus Pool is through buyback performed by Gro DAO treasury with the performance fees collected on protocol yields (5% for Vault & PWRD; 10% for Labs - 90% of these performance fees would be used to buy back GRO tokens that go into the Vesting Bonus Pool).
- Once users start claiming from it, the pool size will go down until it is replenished by the sources described above.
DAO governance can vote to find the right balance between sufficiently large bonus claims for gas efficiency and frequency of engagement. The DAO can use these mechanics to put DAO control into the hands of those with a high level of engagement and long-term view without penalising smaller wallets.
Specific parameters that the DAO governance could set:
- The cool down period after a Vesting Bonus claim (currently set as 4 weeks)
- Max length of the vesting period
- % of performance fees that go into buying GRO tokens for Vesting Bonus Pool
- Team, advisor and seed investors’ tokens are all subject to a 3 year vesting period with 1 year lockup. During the 1 year lockup these tokens cannot be accessed meaning they cannot (a) claim Vesting Bonus or (b) lock the tokens.
- Any tokens bought in personal capacity go through the same route as everyone else.
Last modified 11mo ago