Original Title: "Juicebox protocol tokenomics"

Original Author: Jango (Juicebox Developer)

Original Compiler: Baiyu, CryptoC

In the first fundraising cycle of Juicebox, each project issues 1,000,000 Tokens for every 1 ETH received.

Level 0

In its simplest form, a Juicebox-based project can implement crowdfunding and refund functionalities.

For example: I pay 5 ETH to the treasury and receive 5,000,000 Tokens, and you also pay 5 ETH and receive 5,000,000 Tokens. Now the treasury has 10 ETH and a total of 10,000,000 Tokens. Since I own half of the Tokens, I can redeem them to receive half of the treasury total—in other words, I can get a refund.

Level 1

A reserve rate can be added, allocating a certain percentage of the minted Token supply to a pre-programmed list of addresses.

For example: The project sets a 10% reserve rate, allocated to the DAO's multisig address. I pay 5 ETH to the treasury and receive 4,500,000 Tokens, while you pay 5 ETH and receive 4,500,000 Tokens. The DAO's multisig address can now receive 1,000,000 Tokens. Due to the reserve rate, I can no longer redeem my Tokens for a refund—I can only get back 90% of what I paid.

With a 100% reserve rate, no Tokens will flow to new contributors.

Level 2

A fundraising cycle goal can be set, leaving part of the funds in the treasury, which anyone can allocate to a group of pre-programmed addresses.

For example: The project sets a goal of 1 ETH. I pay 5 ETH to the treasury and receive 5,000,000 Tokens, while you pay 5 ETH and receive 5,000,000 Tokens.

The treasury now has 10 ETH, meeting the fundraising goal, and the other 9 ETH is considered overfunded. I can redeem/burn my Tokens to receive my proportion of the overfunding, which is 4.5 ETH. The 1 ETH goal is still allocatable to the project, and Token holders cannot access it.

Level 3

A redemption curve can be introduced, reducing the share of the treasury that can be reclaimed through redeeming Tokens.

For example: The project sets a 50% redemption curve. I pay 5 ETH to the treasury and receive 5,000,000 Tokens, while you pay 5 ETH and receive 5,000,000 Tokens. Due to the redemption curve, if I redeem my Tokens, I will only receive 2.5 ETH. The remainder is shared among the holders, so you can now redeem your Tokens and receive the remaining 7.5 ETH.

Level 4

A discount rate can be added to reduce the rate of Tokens minted and allocated when receiving donations over a period of time.

For example: The project sets a 10% discount rate and a 14-day period. I pay 5 ETH to the treasury and receive 5,000,000 Tokens on the first day. After 14 days, you pay 5 ETH and receive 4,500,000 Tokens.

Level 5

It is worth noting that a project can change its reserve rate, fundraising goal, redemption curve, and discount rate on a per-fundraising cycle basis. Some projects may choose to have no fundraising cycle deadline for maximum flexibility, meaning they can reconfigure the project based on demand. Trusting the project owners is crucial, as they have significant control over setting the Token economic mechanisms.

A project can also set up a voting contract during its fundraising cycle, so any proposals to reset the Token economic mechanisms must be executed.

For example: The project sets a voting contract with a 3-day delay. If the project owner wants to reconfigure any attributes of the fundraising cycle, such a transaction request must be sent at least 3 days before the current fundraising cycle ends. If a reconfiguration occurs within those 3 days, the next funding cycle will instead become a copy of the current cycle, and the reconfiguration will be eligible to take effect after that cycle.

People can establish any voting contract as long as it complies with IFundingCycleBallot.