Cypher Protocol Fast Tracks Token Launch

Cypher Protocol, a perpetuals exchange on Solana, announced the fast-tracking of their token launch originally scheduled for 9-12 months down the line. The announcement comes in response to the protocol being hacked, with around $1 million in funds lost. One of if not the main reasons for the fast-tracked token launch was to make hack-affected users whole via an airdrop of 50 million CYPH tokens. To accommodate this, the team adjusted the token’s distribution to draw down the treasury and liquidity mining allocations.

In a stark shift away from the predominant low-float, high-FDV narrative surrounding Solana-based token launches, the IDO will allocate 45.5% of tokens to the public sale, vesting immediately.

Source: Cypher

Other noteworthy shifts from the original tokenomics include a 1.9% increase in allocation to investors and a ~50% reduction in token allocation for liquidity mining. However, this supply schedule isn’t static — Cypher’s approach is to allow the DAO to elect to mint additional supply if needed in the future. This can be viewed as an attempt to bridge the best of both worlds — filling the short-term hole via tokens while retaining optionality for greater incentivization or treasury funding down the line. Alternatively, a more cynical view may be that giving tokenholders, who are likely to be skewed towards whale investors, the power to mint more tokens opens up the door to DAO mismanagement via misaligned incentives in the future. Either way, it’s promising to see the new age of Solana teams embrace a public sale distribution much more in line with crypto’s values than what the FTX mafia produced back in 2021. Monitoring the performance of this token sale will give an indication of what other teams in the Solana DeFi 2.0 space might do in the coming quarters.