Introduction

Token allocation and vesting schedules are critical components of Web3 gaming projects, ensuring fair distribution, long-term commitment, and economic stability. In the case of My Pet Hooligan, the KARRAT token's allocation and vesting mechanisms play a pivotal role in shaping the game's ecosystem and aligning incentives among stakeholders. This report will cover: The extent to which My Pet Hooligan's token allocation and vesting schedule demonstrate a fair, transparent, and strategically sound approach.

• The percentage allocation of tokens among team members, advisors, early contributors, and other stakeholders. [1a]
• The vesting schedule for team and advisor tokens, including lockup periods and unlock mechanisms. [2a]
• The implications of token concentration among top holders and the potential risks of token dilution. [3a]

Token Allocation Distribution

The KARRAT token allocation is structured to distribute tokens across various stakeholders, including the DAO Treasury, Development, Team & Advisors, Foundation Treasury, and other categories. [1a] The largest allocation is reserved for the DAO Treasury, which holds 30% of the total token supply, followed by Development and Team & Advisors at 15% each. [1c]

• The DAO Treasury's 30% allocation ensures that the community has a significant stake in the project's governance and decision-making processes. [1d]
• The 15% allocation to the Team & Advisors aligns incentives with long-term project success, ensuring that key contributors are committed to the game's development. [1e]
• The Foundation Treasury's 14% allocation supports the growth of the ecosystem, with resources dedicated to community-driven initiatives. [1f]

Vesting Schedule and Lockup Periods

Team and advisor tokens are subject to a 4-year lockup period, with the first unlock occurring on the 13-month anniversary of the token generation event, followed by monthly unlocks over the remaining three years. [2b] This staggered vesting schedule ensures that team members and advisors remain committed to the project's long-term success, reducing the risk of token dumping. [2b]

• The 13-month cliff period before the first unlock ensures that team members and advisors are incentivized to remain active in the project for at least the first year. [2b]
• Monthly unlocks over the remaining three years provide a steady release of tokens, aligning with the long-term development goals of the project. [2b]

Token Concentration and Dilution Risks

A significant concern is the concentration of KARRAT tokens among the top ten holders, who collectively control 92% of the total supply, raising questions about decentralization and potential market manipulation. [3a] Token dilution is another risk, with a maximum supply of 1 billion tokens and only 116 million currently in circulation, leading to potential downward pressure on the token's value as more tokens are unlocked. [3c]

• The high concentration of tokens among a few holders could lead to centralization of decision-making power, potentially undermining the decentralized ethos of the project. [3d]
• The gradual unlocking of tokens, particularly from the DAO Treasury and Development allocations, may result in increased supply and downward pressure on the token's market price. [1g]

Conclusion

My Pet Hooligan's token allocation and vesting schedule demonstrate a strategically sound approach that aligns team incentives with long-term project success, while also protecting the interests of other stakeholders. The allocation of 30% to the DAO Treasury, combined with staggered vesting schedules for team and advisor tokens, ensures a fair distribution of tokens and long-term commitment from key contributors. [1d] [2b]

• The 13-month cliff period and subsequent monthly unlocks for team and advisor tokens provide a balanced approach to token release, reducing the risk of early dumping. [2b]
• However, the concentration of 92% of tokens among the top ten holders and the potential for token dilution raise concerns about decentralization and market stability. [3d]

References

[1] CryptoRank. Karrat Funding Insights. CryptoRank. date unknown. Available from: https://cryptorank.io/ico/karrat

[2] docs.karratcoin.com. The $KARRAT token. docs.karratcoin.com. 18 Oct 2024. Available from: https://docs.karratcoin.com/the-usdkarrat-token

[3] CryptoNews. Karrat Token Rallies but Dilution and Concentration Risks Remain. Binance. 22 Sep 2024. Available from: https://www.binance.com/en/square/post/13931307888594