$GVDT - Token Lock Mechanism

This page details the $GVDT Token Lock Mechanism

$GVDT token holders can use the token lock mechanism to exercise their Governance rights.

TOKEN LOCK MECHANISM

The core function of the token lock mechanism is to grant weighted Governance rights proportional to the token lock period conditions.

The token lock mechanism offers several mutual benefits to both to GOV.DAO and its members. By incentivising $GVDT token holders to lock their tokens for longer periods, it promotes long-term commitment and reduces token price volatility. The tiered structure of the token lock mechanism rewards members with greater governance rights and reward boosts based on their commitment, ensuring that dedicated participants have a greater say in GOV.DAO´s Governance activities.

Additionally, the token lock mechanism develops a more stable and collaborative Governance ecosystem by vesting decision-making power in the hands of members who believe in GOV.DAO's long-term success, which in turn minimises short-term speculation and potential market manipulation.

TOKEN LOCK PERIODS, GOVERNANCE RIGHTS, AND REWARD BOOSTS

The available token lock periods available are as follows:

• 6 month token lock period

• 1 year token lock period

• 18 month token lock period

• 2 year token lock period

The relationship between the token lock periods, Governance rights (granted by vGVDT tokens), and reward boosts is as follows:

• 6 month token lock period: 100 $GVDT tokens locked will receive 25 vGVDT tokens, granting 25 votes on GOV.DAO Governance decisions, and a 10% boost in rewards relative to the baseline APY.

• 1 year token lock period: 100 $GVDT tokens locked will receive 50 vGVDT tokens, granting 50 votes on GOV.DAO Governance decisions, and a 20% boost in rewards relative to the baseline APY.

• 18 month token lock period: 100 $GVDT tokens locked will receive 75 vGVDT tokens, granting 75 votes on GOV.DAO Governance decisions, and a 30% boost in rewards relative to the baseline APY.

• 2 year token lock period: 100 $GVDT tokens locked will receive 100 vGVDT tokens, granting 100 votes on GOV.DAO Governance decisions, and a 40% boost in rewards relative to the baseline APY.

EMERGENCY UNLOCK

An emergency token unlock function is built into the token lock mechanism. The emergency unlock function is available to all $GVDT tokens not subject to token lock conditions applied on TGE.

The emergency token unlock function allows qualified $GVDT token holders to withdraw their locked $GVDT tokens early. However, to maintain GOV.DAO and $GVDT stability, as well as to and discourage regular unlocking, a penalty is imposed.

This proportionate penalty is equal to the remaining time in the applicable token lock period. For example, if $GVDT tokens are unlocked halfway through a 2-year lock (with 1 years left), a 50% penalty is applied, effectively halving the unlocked $GDVT tokens.

This penalty system is applied to encourage $GVDT token holders to complete their token lock period, and ensures that they emergency token unlock function is used only when truly necessary. In addition, it also minimises potential market disruptions from large, unexpected $GVDT token unlocks. Any penalties incurred will be automatically transferred and held in the DAO´s Treasury Reserve.