New Horizons: Colony Lab’s Validator Program Launch & Sustainability Initiative Unveiling
Introduction
We are thrilled to unveil Colony Lab’s latest milestones — the launch of our Validator Program and the revelation of our Sustainability Program. Anchored by 300,000 AVAX and 200,000 AVAX respectively, these initiatives mark a pivotal moment in our journey. In this article, we delve into their significance, elucidating their strategic positioning within Colony Lab. We explore their profound impact on $CLY stakers, the broader Avalanche ecosystem, and their role as foundational pillars for our upcoming product releases. These initiatives not only strengthen our foothold but also uniquely position Colony Lab to lead and support the ongoing growth of the Avalanche ecosystem over the long haul, promising an exciting journey towards sustained development and innovation.
Colony’s Treasury Journey
Sailing Through Market Turmoil: Adaptive Strategies
In the tumultuous landscape of 2022 and 2023, marked by extreme volatility, projects faced a critical juncture — some flourished while others faltered amidst the chaos. At Colony Lab, the ability to pivot strategically amid market shifts proved paramount. Despite fervent community pressure for early capital deployment during a bullish sentiment early 2022, our team held steadfast to a conservative approach based on meticulous market analysis. Anticipating a market downturn, this decision to navigate against the tide safeguarded Colony’s long-term vision, fortifying our treasury for ecosystem support and positioning us advantageously today. Embracing the bear market, we channeled our efforts into building innovative, sustainable features that add significant value to our community and ecosystem (such as the Early-Stage product and the Liquid Vesting solution). Simultaneously, our strategic Dollar-Cost Averaging (DCA) strategy allowed us to steadily accumulate a substantial AVAX position at attractive prices. This adaptation, accompanied by strategic remodelling and roadmap updates, ensures alignment with our global vision and solidifies our unique position within the Avalanche ecosystem for the long haul.
AVAX acquisition and Colony’s treasury today
In a calculated display of financial acumen, thanks to our strategic DCA investment strategy over the past year, Colony Lab strategically accumulated over 535,000 AVAX (allocated for the Validator Program, Sustainability Program, AVAX lent on DeltaPrime, and others), at an average price of $16.5.
To comprehend the substantial impact of this strategic maneuver: When initially introduced in late 2021, the Validator Program (initially set to represent only 10% of the treasury back then) was projected to secure only around 16,000 AVAX (based on AVAX’s value at $100), yielding approximately 1,200 AVAX per year. However, by postponing the Validator Program launch and restructuring our strategic roadmap, today, in November 2023, we unveiled Validator Program V1, endowed with 300,000 AVAX. This strategic decision significantly enhances rewards for our CLY stakers, distributing roughly 16,000 AVAX annually. Beyond safeguarding Colony’s Treasury, Validator Program V1 remarkably amplifies CLY stakers’ rewards by more than a 10x factor, exemplifying the success of this strategic move.
Furthermore, Colony’s treasury boasts a diversified portfolio encompassing $CAI (Colony Avalanche Index), various ecosystem tokens, LPs, stablecoins, and more. As of the article’s publication, the total treasury surpasses $14.8 million.
ℹ️ For a comprehensive overview of the Colony Lab Treasury, please refer to this link: https://colonylab.gitbook.io/colony-labs-treasury/
Validator Program V1 & V2:
The Validator Program V1 is designed to validate the primary network (AVAX), actively contribute to securing this growing network and help usher in a wave of new applications and assets on Avalanche.
The program involves quarterly staking of 300,000 AVAX and linearly redistributes the generated yield (minus fees) to Colony’s CLY staking contract. In an unprecedented move, rewards from this validator node will be distributed to $CLY stakers without requiring them to stake their own $AVAX, trade it, or provide liquidity. This ensures that $CLY stakers receive consistent free $AVAX rewards throughout the year.
This strategic move sets the stage for a more ambitious objective. With this substantial validator node in place, Colony Lab is poised to significantly contribute to the validation of Avalanche subnets in the future. Our plan includes the launch of Validator Program V2 dedicated to subnets’ validation, and incorporating a liquid staking component. Within the ecosystem, there are ongoing discussions and proposals focused on reshaping Avalanche’s Tokenomics and redefining the relationship between the Avalanche Primary Network and its subnets. The overarching goal is to enhance the attractiveness of subnets for developers and scale up to 100,000 subnets.
Aligned with our forward-looking stance and firm belief in Avalanche’s enduring potential, rewards from both the current and upcoming versions of the Validator Program will be directed back to the $CLY stakers community through airdrops. This initiative aims to establish a consistent base value for $CLY relative to the price of $AVAX.
✅ How to Stake CLY and Access Colony’s Rewards : https://medium.com/@Colonylab/colonys-staking-tutorial-28fa54d27de6
Sustainability Program:
The Sustainability Program plays a pivotal role in steering the success of Colony’s upcoming Early-Stage feature and its Decentralized Exchange (DEX). Moreover, the Sustainability Program is set to substantially bolster Colony’s TVL serving as a magnet for new users and propelling Colony Lab to the forefront of the Avalanche ecosystem. By amplifying activity levels and fortifying TVL, this initiative solidifies Colony’s position as a leading force among Avalanche projects, marking a new frontier of engagement and growth within the ecosystem.
The Sustainability Program involves 50,000 AVAX and quarterly staking of 150,000 AVAX, with the generated yield being allocated to fuel two pivotal pillars: Liquidity Provision and Liquidity Incentives within Colony’s forthcoming DEX.
Integrated with Colony’s Early-Stage feature, this DEX utilizes Colony’s innovative Liquid Vesting mechanism, allowing the trading of locked/vesting tokens from early-stage allocations in seed/private rounds for projects raising funds on Colony’s platform. Liquidity is crucial for the DEX’s success, and the Sustainability Program plays a vital role in enabling sustainable liquidity provisioning and incentivization on the DEX through $AVAX rewards. This strategic initiative, driven by $AVAX rewards, is meticulously designed to facilitate liquidity provision and incentives without exerting selling pressure on Colony’s native token, $CLY.
Detailing the two components of the Sustainability Program:
1) Liquidity Provision:
The Sustainability Program’s Liquidity Provision is set to allocate 50,000 AVAX strategically to bootstrap liquidity pairs, such as USDC/AVAX, CLY/AVAX, CAI/AVAX, and potentially others in the future. These pairs will be pivotal, particularly the USDC/AVAX pair within Colony’s DEX, as it will hold immense significance by enabling automated swaps through the Early-Stage feature contracts, vital for initiating liquidity in ceTOKEN/AVAX pairs. This liquidity will be crucial to ensure minimal slippage and optimize efficiency, a necessity for Early-Stage feature users to navigate the platform seamlessly. Both liquidity bootstrapping and farms’ rewards will be automatically generated by the Early-Stage feature contracts.
As Colony’s DEX approaches its launch, these AVAX reserves currently find utility across other prominent DEXes and protocols, including Trader-Joe and DeltaPrime.
2) Liquidity Incentives:
The Liquidity Incentives segment is powered by the staking yield derived from 150,000 AVAX. At the close of each quarter, Colony’s Staking node will harvest this yield and disburse it across farms within Colony’s DEX. These Farms will reward Liquidity Providers with AVAX on pairs such as USDC/AVAX, CLY/AVAX, and potentially more pairs.
Once again, the primary goal of this initiative remains to ensure Colony’s DEX maintains robust liquidity, enabling smooth and seamless Early-stage automated swaps with minimal slippage, and enhancing the efficiency and experience for our users.
For a comprehensive understanding of Colony’s mission to unlock Avalanche’s Primary Market liquidity, stay tuned for forthcoming details. In the interim, you can explore this informative video elucidating the Liquid Vesting mechanism and offering a glimpse into our upcoming DEX.
Sustaining Colony Lab’s protocol: Revenue Streams Shaping Growth and Team Expansion
In anticipation of the impending surge in Avalanche activity and the vibrant ecosystem’s exponential growth, Colony Lab is gearing up to expand its Marketing and Business-Development teams, aligning with the approaching bull run. This expansion aims to foster impactful collaborations, enhance CLY CEX listings, and further grow our community.
To secure a sustainable revenue stream without affecting Colony’s treasury, a 30% fee is applied to Colony’s treasury staking yield. This approach ensures a reliable income source without exerting significant selling pressure on our CLY token, all while fortifying our team’s growth trajectory.
Our conviction in Avalanche’s exponential growth fuels our commitment to scale alongside it. These revenue streams underscore our dedication to thrive within this burgeoning ecosystem. As we embark on this transformative journey, establishing sustainable revenue streams is fundamental to fortify Colony Lab’s future and empower our team’s pivotal role within the Avalanche landscape.
Closing thoughts
In closing, these strategic initiatives underscore Colony Lab’s enduring dedication to the Avalanche ecosystem. For the past two years, we’ve been an active force in its growth, attracting builders, supporting early-stage projects, providing DeFi protocols with essential liquidity during challenging times and building exciting innovative products (Early-Stage feature, Liquid Vesting solution, the largest yield-bearing Avalanche Index- $CAI, etc). Our unwavering commitment continues as we embark on this new phase, marking not just a milestone for Colony Lab but a reiteration of our lasting commitment to nurturing and contributing to Avalanche success. As we move forward, our community of $CLY stakers stands at the forefront, poised to reap the rewards directly correlated with the successes of the AVAX network. Colony Lab has been here for the past two years, and our dedication remains resolute for the prosperous years ahead.
About Colony Lab
Colony Lab: The community-driven Avalanche ecosystem accelerator, powered by $CLY.
We empower projects through decentralized fundraising and liquidity. Our inclusive platform offers the community diverse exposure and unprecedented access to Avalanche’s remarkable growth. Join us for seed/private sales investment opportunities and unlock a world of rewards, including airdrops, $AVAX incentives, and a share in platform fees.
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