Realigning Incentives: How to Distribute Governance Tokens Effec…

This paper presents a model of token distribution that allows token holders who are subject to vesting agreements to exercise the full power of their future governance rights, while also incentivising their long-term interests in the protocol.

Token distribution mechanisms have adopted a lot of the structures from within the traditional financial world — including vesting schedules and vesting cliffs — which have resulted in some unintended consequences like adverse price action as tokens vest; and the inability of holders with large economic interests in a protocol to exercise governanc... See more