#35·Council motion #48: Rebranding with Tokenomics Change

Proposal: Rebranding with Tokenomics Change

Context and Background

Following the successful first tokenomics proposal that introduced a more dynamic reward structure, the Litentry Foundation is proud to present our Second Tokenomics Proposal, which builds upon the initial improvements. This proposal introduces significant updates to our tokenomics, including an expedited token release schedule, liquidity improvements, and a rebranding effort to better align with our future vision of chain abstraction services.

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Key Updates in the Second Proposal

1. Network Rebranding: Litentry to Heima Network

As we transition into a provider of chain abstraction services, we propose renaming the Litentry Network to Heima Network and changing the token ticker from LIT to HEI. Inspired by the concept of “home,” Heima represents a seamless, unified experience for users navigating the decentralized world. This reflects our pivot towards becoming a leading infrastructure for seamless cross-chain interactions.

Rationale for the Rebranding:

1. Chain Abstraction as an Upgrade:

   • Chain abstraction builds on our identity aggregation protocol, enabling not just the aggregation of user data but also the interoperability of assets across different networks.
   • This upgrade extends our mission from identity aggregation to creating a unified framework for cross-chain asset management.

2. Market Opportunities:

   • For exchanges: Simplifies integration and cross-chain asset transactions.
   • For wallets: Provides a unified user experience, enabling seamless asset and identity interactions.

3. Alignment with Industry Trends:

   The rebranding reflects broader industry trends(https://vitalik.eth.limo/general/2024/12/03/wallets.html) toward cross-chain interoperability and enhanced user experiences. Polkadot 2.0’s Join-Accumulate Model (JAM) protocol and similar initiatives highlight the growing emphasis on efficient data aggregation and interaction across parachains. These developments exemplify the industry’s collective move toward fostering decentralized ecosystems that prioritize usability, scalability, and collaboration.

Implementation:

• Update all branding, technical references, and documentation to reflect the new name and ticker.
• Coordinate with exchanges and wallets to ensure a smooth transition.
• Launch a campaign to educate the community on the vision behind the rebranding.

2. Optimizing the Parachain Auction & Ecosystem Fund

The Parachain Auction & Ecosystem Fund, comprising 29.1M LIT, which is 29.1% of the total token supply, was initially reserved for future parachain auctions. These tokens are currently locked in a multi-sig wallet without a vesting schedule, creating inefficiencies.

Proposed Changes:

1. Pallet-Based Vesting for Ecosystem Fund:
   • Lock the remaining 24.1M LIT of the fund into a multi-sig account on Mainnet with a 20-month pallet-based vesting schedule. These tokens will exclusively support ecosystem development initiatives.
   • As a result, over the next 12 months, the circulating Supply (CS) will increase from 66.45 million LIT to 89.5 million LIT (+34.7%).
     • Original CS Increase: 4.5M LIT (~6.8%), calculated as 66.45M * 0.068.
     • New CS Increase: 23.05M LIT (34.7%), calculated as 66M * 0.347.
     • Net Increase: 18.55M LIT (~28%), derived from 23.05M - 4.5M.
2. 5M Liquidity Fund for the new Finance Center
   • Extract 5M LIT of the ecosystem fund to provide pooled liquidity and reserves for LIT-related trading pairs on our new decentralized finance center.
     The increased token supply allocated to the ecosystem will primarily be used to boost liquidity in the Heima Network mainnet.
   • Circulating supply will increase by 5M (7.5%) immediately after this event.
   • In the future, multiple liquidity pools will be established for HEI trading pairs with major tokens such as ETH, SOL, and DOT, enhancing the decentralized trading experience within the Heima Network.
3. Migration to Parachain for Transparency:
   • The primary goal is to migrate team wallets from ERC-20 to the Heima Network parachain, enhancing transparency. This includes replicating the existing vesting schedule from ERC-20 wallets to the new mechanism on the parachain.
   • Post-approval, the existing ERC-20 wallets will be deprecated, and any remaining balance will be sent to a burn address for complete transparency and accountability.

Benefits:

• Strengthened liquidity for smoother trading and DeFi use cases.
• Enhanced transparency and accountability with pallet-based fund management.
• Accelerated token utility, boosting adoption and market confidence.

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FAQ

1. Will there be additional token issuance? Will the total supply change?

Answer: No. The total supply of tokens will remain unchanged.

2. What will happen to my old LIT tokens?

Answer: On-chain LIT tokens will automatically be converted to HEI. For ERC-20 LIT tokens, we will provide a web application for a 1:1 swap. For BSC-based LIT, we will coordinate with Binance for handling. Tokens held on Binance Exchange will be automatically converted. We will also coordinate to other CEXs to facilitate the changes.

3. What are the specific on-chain operations associated with this proposal?

Answer: We will set up the following on-chain wallets with corresponding locking mechanisms:

• Team Locked Wallet: 47GsQgX5gZoWP2VfRucKXn1WnPo4Rad85xA59ABd1BJtaXTN
• Foundation Locked Wallet: 483pUu4VfReCJtGHLGhVPQRZaYV3HbWqSwWeN3UCZzV7p2BD
• Ecosystem Locked Wallet: 49VYuGkjdmZprGpb4jU313RdSffxSVHixojzmafdFYGpVYXb

4. What does passing this proposal mean, and what follow-up actions will occur?

Answer: Passing the proposal means:

• The migration of three vesting wallets from Ethereum to the Heima Network parachain, with token release according to the plan.
• Subsequently:
  1. All balances in the Ethereum-based wallets will be burned.
  2. All old bridge-based LIT tokens will be burned.
  3. We will work with Binance to facilitate the ticker change.

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Roadmap for Q1 2025

Once the voting is passed by the community, we will:

• Coordinate with major exchanges to execute the rebranding and facilitate the automatic ticker upgrade from LIT to HEI.
• Empower decentralized applications by packaging the chain abstraction services into an SDK and collaborating with one decentralized exchange to seamlessly integrate Heima Network’s chain abstraction capabilities, significantly enhancing user experience.
• Launch a liquidity pool for HEI tokens, enabling decentralized trading of HEI. potentially booster the trading pairs of HEI token with other major cryptocurrencies on different DEXs.
• Integrate Heima Network’s mainnet with major exchanges, expanding beyond the current Ethereum network.

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Expected Outcomes

Liquidity and Ecosystem Growth

• Ecosystem development accelerated by the ecosystem fund, transparently vested over 20 months.
• Extract 5M LIT of the total ecosystem fund  to provide pooled liquidity and reserves for LIT-related trading pairs on our new decentralized finance center.
• Increased liquidity in the Heima Network mainnet through the migration of major accounts and the establishment of liquidity pools for HEI with tokens such as ETH, SOL, and DOT.

Enhanced Market Presence

• Rebranding to Heima Network establishes a clear alignment with our pivot to chain abstraction services.
• A stronger brand identity attracts new developers, users, and institutional partners.

Broader Token Utility

• A 34.7% increase in circulating supply over the next 12 months ensures sufficient token availability to support mainnet applications and LIT adoption.

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Call to Action

We invite the community to review and support this proposal. By voting in favor, you contribute to:

• Strengthening our network’s liquidity and utility.
• Accelerating ecosystem development.
• Establishing Heima Network as a leader in the industry with chain abstraction services.

Let us know your thoughts and join us in shaping this exciting journey!