The Launch of the Picasso Crowdloan & Vault Strategy Update

We will be bidding for a Kusama parachain from the next 5 slots. In advance of this bid, we are announcing our upcoming Picasso network crowdloan.

Composable Finance is pleased to announce the Picasso token (PICA), which will be the native token of the Picasso Network Kusama parachain. PICA token will have a multitude of important use cases on our upcoming Picasso parachain, including key governance decisions.

Procuring a Kusama Parachain — Overview & Intentions:

Given our development is ahead of schedule, we believe that we are now in a position to bid for a Kusama parachain. We will also be in a position to bid for a Polkadot parachain in the first round of the upcoming Polkadot Parachain auctions.

If we procure a parachain and deploy Picasso, we will be able to be one of the first ecosystems to deliver dApps like options protocols, lending protocols, and others.

PICA will have critical functionalities including allowing voting on which pallets are implemented first on Picasso, beyond our core pallets such as Apollo (oracle pallet) and Cubic (vaults pallet) that will already be available.

In preparation for this, a few key determinations are laid out as follows:

  • We will be releasing the Picasso Network token (PICA) — the native token of the Picasso parachain, which lives solely on the Kusama parachain. PICA will have critical functionalities including allowing voting on which pallets are implemented first on Picasso, beyond our core pallets such as Apollo (oracle pallet) and Cubic (vaults pallet) that will already be available.
  • LAYR will be the native token for all of Composable Finance’s activities on both Ethereum and on Polkadot.

The dynamic between LAYR and PICA will be as follows:

  • Similar to how DOT will be transferred to the KSM treasury at a later date (pending Substrate-Substrate bridges ), we are committed to allocating a portion of LAYR tokens to the Picasso treasury. Picasso governance will vote on how to spend these LAYR tokens.

Crowdloan and PICA Tokenomics Details:

We are launching a crowdloan to obtain the KSM needed for receiving a Kusama parachain at auction, which will allow us to deploy our Picasso parachain ecosystem.

In advance of the sixth parachain auction (the 7th parachain slot), slated for September 1st, we will be releasing a parachain lease offering to obtain the KSM needed for securing a Kusama parachain, to deploy the Picasso Network.

Picasso Crowdloan Details:

Crowdloan participation will be capped at 100,000 KSM, an amount which we believe will amply position us for Kusama parachain procurement. The crowdloan period will total 48 weeks, broken down into 8 lease periods of 6 weeks each.

Crowdloan stakers will earn 20% of PICA token supply: 2,000,000,000 PICA.

Additionally, should we win the auction, we will endeavor to provide users with added yield during the slot period. This means that crowdloan stakers can earn a base annual percentage yield (APY), as opposed to being stale in their position for the duration of the slot. This provides an additional benefit to crowdloan participants beyond PICA earnings.

Thus, crowdloan stakers are earning:

  • 20% of PICA token supply.
  • A base level APY on their KSM powered by yield farms (more details to come soon).

However, the crowdloan is the only way KSM holders can get PICA tokens in the near term. As such, we have also implemented a referral program where users can generate referral codes, and will obtain a 20% bonus on their PICA tokens if they bring in other referrals that contribute a total of 100 KSM or more.

Extension of the Existing Vault Strategy:

Composable is incredibly happy that our vault strategy and related developments are ahead of schedule. Given the above developments, we are adapting this effort to support our Polkadot parachain procurement at auction, and extending the strategy until we earn our Polkadot parachain.

More specifically, stakers in our vault will now be supporting the procurement of our Polkadot auction.

This means the following:

  • The vault strategy will extend until the Polkadot parachain has been secured. Already to date, with $55M TVL, we have generated greater than 20,000 DOTs.
  • The existing LAYR token incentives will proceed as previously detailed. However, LAYR incentives will stop beyond the last 40 day period. This means that the next few weeks will be the last opportunity for users to obtain the LAYR token. From there, we will commence incentivizing these stakers with PICA.
  • As such, we are excited to launch additional strategies aimed towards Polkadot parachain procurement.

We are looking forward to announcing these additional strategies, as we continue to set the standard for cross-chain yielding strategies.

PICA Token Details:

Distribution:

The total PICA token supply will be 10,000,000,000. The token will be distributed in accordance with the following figure, with further details below:

Presently, 20% of PICA token supply will be allocated to crowdloan stakers, as the only way to earn PICA tokens in the near future. Rewards will also be slightly higher for users allocating to our crowdloan in the first 24 hours of its deployment, further incentivizing early participation.

LAYR token holders will be eligible to redeem Picasso Network tokens by locking up their ERC-20 LAYR tokens on Ethereum until the Polkadot parachain is secured. Thus, investors and current stakers in the vault strategy, who will obtain LAYR upon the token generation event (TGE), will be eligible to lock their LAYR tokens for PICA tokens. This amounts for 10% of the token supply. The priority is for the traction on the Picasso parachain to benefit the LAYR token holders, empower Picasso holders, and benefit the Polkadot parachain in the future. The way this will be awarded is as follows:

  • Users stake and lock their LAYR tokens in Ethereum vaults until Composable secures a Polkadot parachain slot. In the theoretical scenario in which Composable does not obtain a Polkadot parachain, the maximum locking period will be 1 year.
  • Stakers will be earning PICA tokens at a rate determined after monitoring the PICA network token, which will likely be released before LAYR. A maximum of 10% of PICA supply will be allocated to users who lock up LAYR upon LAYR TGE, on a diminishing returns curve; there will initially be a higher ratio of Picasso to LAYR tokens locked, reducing to a lower ratio of Picasso to LAYR tokens over time. In the event of the full 10% not being allocated to LAYR lockers, the remainder of this token supply will flow into the treasury, which will be run by governance, and primarily focus on grants to new projects on Picasso.

30% of PICA tokens will be designated to liquidity mining that will be used to reward liquidity providers of the PICA token — KSM on multiple different AMMs in the Kusama ecosystem.

Additional protocol emissions include 10% of PICA to channels like:

  • An airdrop of PICA to all wallets holding KSM.
  • The aforementioned referral program for users bringing other contributors to our crowdloan.
  • Reserves for distribution in future parachain auctions.

Collators that create blocks on the parachain, as well as Picasso holders who stake Picasso with collators, will earn in protocol rewards. More specifically, Collators will earn transaction fees — a portion of which will be burnt, and also flow into the treasury.

Additionally, similar to inflation in Polkadot, there will be an inflation curve that has exponential rewards. Oracle providers in our system will earn rewards from inflation.

The team will receive 15% of supply as well.

The treasury, which will be used to incentivize the initial 5–6 projects that deploy on the Picasso network, along with pallet creation grants, will be allocated 15%. Furthermore, as mentioned previously, a certain percentage of transaction fees will go towards the treasury.

Vesting Distribution:

The crowdloan stakers will earn 50% of their PICA upon TGE, with the remainder being released linearly within 48 weeks. The full balance can be used to participate in governance and other activities besides transferring.

The vesting of protocol emissions, LAYR staking tokens, and liquidity mining rewards is linearly over 48 weeks. 50% of treasury tokens will be immediately available, with the remaining 50% also vested linearly over 48 weeks. Team tokens will be vested for 2 years.

Use Cases of the PICA Token:

Our vision for Picasso is that it will attract developers who would like to build on top of our DeFi primitives, and Picasso will be a testing ground for experimental DeFi applications.

As such, the PICA token will have a few key use cases:

Governance:

The PICA token will serve as the voting mechanism to govern:

  • Which pallets can be incorporated onto the Picasso Network
  • Decisions on grants and other incentivization programs will be actioned through the treasury, and will be the location where transaction fees flow into
  • Which products on the Picasso network will be able to “graduate” to our Polkadot parachain
  • Public goods infrastructure: powering infrastructure providers, block explorers, wallets, and other key ecosystem partners

Collators:

The PICA token will be staked in order to produce blocks on our Kusama parachain. In doing so, the collators will earn PICA tokens through transaction fees.

Data Provider Staking:

As mentioned previously, for our oracle to query cryptoeconomically secured data feeds, providers will need to stake the Picasso Network token. This will serve as an additional use case for the PICA token, which will underpin all the DeFi applications that exist in the network. The slashing mechanism will burn Picasso Network token, and providing data feeds correctly will result in the awarding of PICA tokens from inflation. This will be balanced by a slashing of a portion of each transaction fee to account for this reward inflation.

Network Usage:

Transaction fees are payable in Picasso Network tokens.

Picasso Network Treasury:

To account for the long-term sustainability of the Picasso Network, the Picasso Network treasury is governed by the Picasso General Council, which will later be governed by PICA token holders. Decisions on grants, incentives, will be actioned through the treasury, and will be the location where transaction fees flow into.

Stay tuned for more updates as we push towards parachain procurement and deploying Picasso.

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