Overnight Tokenomics
Information about Overnight Tokenomics
OVN utility
The goal of issuing OVN is twofold:
Promote and popularize USD+, which is achieved with using OVN for bribes;
Establish a robust & decentralized risk monitoring and management processes at the protocol level.
OVN token will provide standard voting rights which will be key to realizing the vision of decentralized risk-management. OVN token should help align community incentives with this goal: to reward for supporting conservative risk decisions, and for vetoing aggressive ones.
After a period of testing, Overnight will introduce Overnight Insurance Vault (1 per chain), where OVN holders will be able to stake OVN in exchange for insurance premiums. Staked OVN will receive a part of the yield generated by the insured strategies (not all strategies will be insured) and in case the strategy is unprofitable on a specific day the entire incurred loss. During profitable days excess yield generated by the strategies will accrue to the Insurance Vault and will be used to buy OVN off the market and add to the vault; In case of a loss, the opposite would happen. As these vaults won’t be immediately redeemable, stakers will have a vested interest to support strategies with optimal risk reward upfront.
We believe that Insurance Vaults would play an important role in scaling Overnight while maintaining attractive yield for USD+ holders and creating upward pressure on OVN. The way USD+ is designed is that this is the token that should be profitable every day.
OVN token distribution
OVN will have a fixed supply of 1,000,000 tokens. No emissions of additional OVN is planned.
33.5% of total supply is reserved for the team and pre-seed investors. These tokens will vest over 30 months (see below). Up to 2.5% is reserved for the pre-sale, unsold excess tokens won’t be burned, but returned to the treasury.
| Token allocation | Share (%) | Vesting terms |
|---|---|---|
Pre-seed investors | 8.5% | 6 months cliff followed by 24 months linear vest |
Team | 25.0% | 6 months cliff followed by 24 months linear vest |
Pre-sale | 2.5% | 25% on end of sale, 75% 4 week linear vest |
Insurance fund | 20.0% | 10% on end of sale, 90% 6 months linear vest |
Treasury | 44.0% | 10% on end of sale, 90% 6 months linear vest |
The remaining parts include Treasury, which will vest over 6 months, and will be used for seeding liquidity to OVN pools, incentivizing USD+ pools via bribes and other forms of incentives. The remaining 20%, once vested, will be used for staking into specific Insurance Vaults. The revenue generated from seeding liquidity and insurance staking would be included into protocol’s revenue and treated as such.
How you can benefit from OVN token
There are multiple strategies that can help you benefit from OVN token:
Buy and hold – the tokenomics is designed to maximize the value of 100% of the token supply over the next 30 months, so buying and holding through that period is the most straightforward way to get exposure to OVN
Buy OVN and stake OVN/USD+ LP – should generate additional yield on the LP from revenue, however, would limit maximum upside and reinforce downside through impermanent loss
Buy OVN, stake into Insurance Vault – should generate additional yield from insurance premiums, however, potential downside in case of a potential loss on a strategy
Read more information in our article: https://overnight.fi/blog/2023/09/12/overnight-tokenomics/
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