Temp-Check: SLURP 35 | Changing the calculation method for circulating supply

[Asymmetric]

GM dear SDL DAO,

Following is a Temp-Check: SLURP 35 | Changing the calculation method for circulating supply

Reasoning:

There were some discussions around this topic in Q4 2024. With more and more attention being drawn to LINK staking in general and SDL specifically in 2025 this Temp-Check is on the proposal to change the way the SDL circulating supply is being calculated. A change will affect how other entities see the protocol and decide on whether and how they are willing to interact with it. As we are entering a growth phase the perception to external organizations (Institutions, Custodian, CEXs, Wallets, etc.) is becoming more and more important for the protocols success.

To get a more accurate picture on the a) level of decentralization and reflect the b) maturity stage of the protocol and the token representing it, I believe it is beneficial to also include SDL tokens in the circulating supply that were locked by users. These SDL tokens have a lock period and are therefore restricted to use within a specific timeframe (i.e., no trading, no lending, etc.) but nonetheless they are part of the circulating supply and have been locked by a users decisions only (individual decision; not a protocol decision). The circulating supply should not include tokens that are obviously pre-circulating such as vesting (protocol decision).

I therefore ask the community for a Temp-Check on the following:

• Changing the Circulating Supply calculation the following logic: Total Supply - Treasury - NOP Vesting - Core Contributor Vesting = Circulating Supply
• An estimation of this figure is 58.5M SDL Tokens vs. roughly 16M SDL Tokens displayed on CoinGecko currently.
• This will lead to changing ranks from #1727 to roughly #1000 and increasingly larger rank jumps in the future providing visibility
• It also gives a more accurate picture on the development of SDL and reSDL dilution which is much smaller than what the current circulating supply is indicating

Happy for any comments, concerns, etc.

Best,

J / Asymmetric

[resdl.eth]

GM ser thank you for your proposition.

I know the slurp mentions the idea of it being locked by an individual and not by the protocol, but when employees agree to a vest they the individual agree to it and can opt out of it like the nop that left sdl. It feels like the slurp is arbitrarily trying to decide that some time locked tokens count as circulating and other time locked tokens don’t.

Feels like artificial rank increase is the only benefit here. Frankly the difference between a rank 1700 coin and a rank 1000 coin will not make a difference for investors. Investors worried about low float will be looking at the liquidity available not the cmc rank. I think this would make a much bigger difference if we were already in the top 50.

I vote no on this, at least for now. May feel differently about it in the future. I’d revisit this in 6-12 months.

[Asymmetric]

Thanks for the push and feedback!

Not sure if I understand your point correctly. Already vested tokens are accounted for in the Circulating Supply whereas unvested tokens are not accounted for in the Circulating Supply. An opt out is only possible for vested tokens that are accounted for in the Circulating Supply and is not possible for unvested (pre-circulating) tokens.

Simply said all tokens where a User, Employee and NOP can take a free decision on what to do with them are accounted for in the Circulating Supply.

Regarding the ranking I listed it more as a consequence instead of the goal of this change. If we want to change it, I would do it now since such a big change will be viewed with more scrutiny the bigger we are.

[SethVdL]

The point of locking tokens is to remove them from circulation. Keep in mind Aerodrome is one of the largest revenue generating projects on all chains for last year and is currently ranked #137 on CoinGecko. They have a similar veAero model and do not count locked tokens towards circulating supply. Token rankings do not matter.

[EqS]

I strongly support this change.

• reSDL NFTs (containing SDL) can be bought and sold on NFT markets or privately. SDL can be withdrawn from the reSDL NFTs. This is fundamentally different to SDL vested or controlled by the Treasury.
• Perception is important and both the ranking and low circulating supply may inhibit interest in the project.
• While a change in rank from 1700 to 1000 may not be significant currently this impact will continue into the future.
• This situation is somewhat analogous to Staking v0.1 where 25m LINK couldn’t be withdrawn. There were no changes to Chainlink’s circulating supply on CoinGecko or CoinMarketCap to reflect this.

[Tokenized2027]

Thank you for raising the temp check for this @Asymmetric, a great example that anyone in the community can build to make sure stLINK remains the #1 LINK LST.

I have been using our low market capitalization as a “bullish selling point” in the last year, and while it could be seen as positive to some, I don’t believe it fully reflects the real on-chain statistics of stake.link. As @EqS mentioned above, there are many 0yr locked SDLs in reSDL NFTs, which can become “circulating” instantly, while the 1/2/3/4yr locked NFTs can be bought as locked positions in platforms like OpenSea.

I will also add that for most projects, non-circulating tokens are considered a bearish threat for future “unlocks”. This is not the case for SDL’s distribution (see pic added), and we are aware which tokens will be circulating per their vesting structures (whether it is the 15 NOPs or other vesting outlined in SLURP8). I think it is naive to assume those who just found out about SDL will do a research deep enough to understand how the distribution really is. Needless to say this is purely optics matter, and the facts are on chain - but I believe this will better present stake.link to the market, which is why I support it.

If we do not reach consesus, we should consider having an on-chain reSDL vote.

[candide]

Perhaps it would be best if price discovery occurs in an organic way.

Altering or re-categorizing the way locked tokens are represented is a departure from the conservative approach we have taken thus far, and is unnecessary. It’s reasonable that certain tokens are locked, and so, are no longer in circulation.

When those tokens are unlocked, I’d be happy to find a way to accelerate that proper representation on various coin indexing platforms.

Increasing the amount of coins in circulation to artificially increase the market cap does not seem like a good foundational premise. If the industry standard is how we have been doing it, then we would need to maintain that position.

I would vote no on this.

[LP_Matias]

Hi Everyone,

I appreciate the thoughtful responses and hope you all are having a great end to the week. I wanted to take some time to address some of the points raised in this discussion –

1. “The SLURP is arbitrarily deciding which locked tokens count as circulating.”

This is not an arbitrary decision—what this SLURP is about reflecting economic reality. The difference between vested tokens (e.g., NOP/core contributor allocations) and staked/locked tokens (e.g., reSDL) is simple:

• Vested tokens are not yet in circulation—they remain under protocol-controlled vesting schedules, meaning no user has had the ability to freely buy, sell, or stake them yet.

• Staked/locked tokens (reSDL) were already in circulation before they were staked. Users acquired them from the open market, meaning they were freely tradable beforehand and voluntarily locked.

• Additionally, reSDL NFTs can be sold on secondary markets, meaning they retain economic activity. This is fundamentally different from vesting tokens, which remain under protocol custody until unlocked.

Circulating supply should reflect tokens actively in user control, not just those immediately liquid.

2. “This is an artificial rank increase, and rank doesn’t matter.”

I agree that ranking should never be the goal of a supply adjustment, and it was a candid mistake that the original SLURP framed it that way.

However, the core motivation is not rank manipulation—it’s ensuring accurate reporting. That was our sole focus when this discussion came up in the end of 2024.

Right now, people frequently visit our Telegram, Discord, and other channels immediately dismissing SDL because they assume 16M circulating supply means low float + high FDV, potentially predatory tokenomics.

We don’t have predatory tokenomics. The entire SDL supply is transparently allocated, with no VCs, no hidden cliffs, and no insider games. But potential participants don’t know that at first glance, and most won’t take the time to research further. This is a significant hindrance to progress.

If inaccurate reporting is creating unnecessary friction for adoption and institutional integration, it should be corrected.

3. “The point of locking tokens is to remove them from circulation.” "Other protocols (like Aerodrome) don’t count locked tokens, so why should we?

This is only partially true. Yes, locking removes immediate liquidity, but it does not remove the token from user control.

reSDL is tradeable as an NFT, meaning users can still exchange exposure to staked SDL. We’re starting to see the beginning of secondary markets now for reSDL NFTs now, and I’m personally quite excited for this.

Ultimately, tokens are not out of the market—they are just held under a different economic mechanism.

4. “Other protocols (like Aerodrome) don’t count locked tokens, so why should we?”

Each protocol has different token mechanics. Aerodrome’s veAERO model may not count locked tokens, but:

• veAERO does not have transferable NFTs that represent staked positions.

(Correction: veAERO does have transferable NFTs that represent staked positions).

• Many projects do count staked or locked tokens in circulating supply, including Aave which reports 2,730,000 staked tokens out of 15,053,439 tokens in circulation with a 16,000,000 max supply.

• Chainlink did not remove LINK Staking v0.1’s locked LINK from circulating supply.

There is no universal standard—just whatever best represents economic activity.

5. “Price discovery should be organic, and altering supply is unnecessary.”

Totally agree. Price discovery is not being manipulated here. The market is already trading reSDL, and the SDL used to stake was already in circulation.

What this SLURP proposes is not introducing new tokens—we’re just correcting a misrepresentation that discourages users from participating and new user growth.

New users see SDL’s circulating supply as misleadingly low and many dismiss the project as “low float, high FDV." We’re unnecessarily handicapping ourselves.

Final Thoughts:

This is not about boosting rank, inflating market cap, or misleading the market. It’s about accurately reflecting SDL’s real circulating supply.

• Treasury & vesting tokens are truly non-circulating and remain excluded.

• Tokens that were in the open market, acquired by users, and voluntarily locked in staking should still count as circulating.

• reSDL can be traded, further supporting its active market presence.

This change ensures that stake.link is represented fairly across listing platforms, removes unnecessary confusion for new users, and aligns us with how similar staking-based ecosystems treat their supply metrics.

I appreciate everyone’s engagement! Thanks for taking the time to read and post on the Talk Forum, and I welcome any questions or feedback of my thoughts in this comment.

[SethVdL]

@LP_Matias

3. “The point of locking tokens is to remove them from circulation.” "Other protocols (like Aerodrome) don’t count locked tokens, so why should we?

This is only partially true. Yes, locking removes immediate liquidity, but it does not remove the token from user control.

reSDL is tradeable as an NFT, meaning users can still exchange exposure to staked SDL. We’re starting to see the beginning of secondary markets now for reSDL NFTs now, and I’m personally quite excited for this.

Ultimately, tokens are not out of the market—they are just held under a different economic mechanism.

4. “Other protocols (like Aerodrome) don’t count locked tokens, so why should we?”

Each protocol has different token mechanics. Aerodrome’s veAERO model may not count locked tokens, but:

• veAERO does not have transferable NFTs that represent staked positions.

For what it’s worth:
“Staked” aero as veAero is fully a transferable NFT and is available on OpenSea as well. They also have a secondary marketplace (not run by them) with $4m in volume in the past 30 days.
https://marketplace.openxswap.exchange/Collection/8453/0xebf418fe2512e7e6bd9b87a8f0f294acdc67e6b4

[LP_Matias]

Ah, thanks Seth for the correction. I’ll edit my response above.

In my opinion, it comes down to Core Contributors just not agreeing with Aerodrome’s classification and being more aligned with Aave’s.

There is economic activity that can take place with veAERO and reSDL, and the only way that those tokens were able to be staked in the first place is if they were obtained in the open market – this wouldn’t be possible if they weren’t in circulation.

My goal is to simply level the playing field for the protocol so as not to scare anyone off from learning more about us by merely looking at tokenomics online and saying “woa, 16m circ out of 100m total, no thanks not interested.”

It’s just not the case in my opinion.

Thanks for the correction though and your thoughts as always.

Matias

[SethVdL]

In what way do you mean more aligned with Aave’s? Staking in their Safety Module? Locking veAero and reSDL as locked, but transferable NFTS are quite similar to each other and very different to staking Aave.

[LP_Matias]

It’s a fair point. The core argument is the broader principle of what should be considered part of circulating supply.

veAERO and reSDL both represent user-acquired tokens that have been voluntarily locked but remain actively tradeable as NFTs. The fact that they can be bought, sold, and transferred means they are still part of the market’s economic activity, even if the underlying SDL is time-locked.

The goal is to simply ensure that the reported circulating supply reflects the reality of how SDL is being used today. Core contributors believe staked SDL, whether locked for 1 or 4 years, is SDL that is in circulation as it’s not in treasury or vesting.

Matias

[SethVdL]

Staking aave is similar to staking chainlink community pool (not using SDL). You can withdraw with cool-downs and token easily goes back “into circulation”. There is no other market created.

In locking aero or sdl, you create an NFT that is tradable from the underlying asset. These new veTokens now have their own markets. As the secondary market grows, you will now have a fictitious representation of SDL value as we’d be double counting the reSDL NFT market. I can’t think of a scenario where that is common practice.

[candide]

It seems like there is a paucity of comparisons.

How does LIDO do this? Is there anyway we can compare this issue to anything LIDO has in its structural bed?

[hboss]

At this time, I would vote “no” on this proposal. The current tokenomics seem to be functioning well as they are.

I would support reintroducing tokens into circulation once an NFT begins its unbound process, even if this means only adding back half of the locked period. However, it’s important to note that even a ReSDL NFT being traded on the secondary market can often be mispriced, as we have seen in previous instances. Furthermore, the token listed on CoinGecko is “SDL,” not ReSDL. Therefore, any $SDL that is locked and unable to be sold should not be considered part of the circulating supply.

Overall, I don’t believe the proposed changes provide sufficient benefits to justify implementation.

In any case, I suggest we conduct a tempcheck snapshot for further clarity on this matter. @Michael, please advise.

[Ari]

First off, huge thanks to everyone who jumped into this discussion! The level of thought and engagement here is awesome, and it’s great to see the community thinking critically about how we define SDL’s circulating supply.

The proposal suggests including user-locked SDL tokens in the circulating supply, which woul.d bump the number up from ~16M to ~58.5M.

The argument in favor is that these tokens belong to individual users, not the protocol, so they’re not the same as team or treasury holdings.

This is something key to consider:

@SethVdL

The point of locking tokens is to remove them from circulation.

Worth noting Coingecko’s definition:

Circulating supply = Total Supply - Team tokens - Foundation tokens - Locked Tokens

And what is said on CoinMarketCap:

The network at large has no reliable knowledge of how much of the total supply is in active circulation, making the metric of circulating supply an imperfect approximation.

Liquidity is a key factor in how circulating supply is defined, and locked SDL isn’t exactly liquid.

Moreover, the reSDL NFT market only accepts ETH for now, meaning SDL itself (or even LINK, which is SDL’s main liquidity pair) isn’t even involved in those trades. That makes it hard to justify counting locked tokens as part of the actively circulating supply.

Similar veToken projects in the space stick to industry standards by excluding staked/locked tokens, so changing this could look like gaming the rankings.

---

My personal take:

Rather than making a decision based on gut feeling, we could build a dedicated simple Dashboard (on Dune, for exemple) to track this stuff properly, as much of this exists already. That way, we can:

• Show clear data on liquid vs. locked SDL in an easy-to-understand way. We could also include the reSDL market for that matter.

• Give everyone a better foundation for making decisions based on real on-chain data.

Again, huge thanks to everyone who contributed! Love seeing discussions like this where we dig into the details and challenge each other’s perspectives. Looking forward to hearing more thoughts and working towards the best path forward together!

[Jonny]

To throw my thoughts into the mix, I am for this proposal for a few reasons. If I was to ask the question of: what high-level tokenomics are displayed to encourage more people to get involved in the protocol? It would be the higher circulating supply.

I can make both arguments. Time locked reSDL is locked for X time so it’s no longer circulating, or that the SDL within reSDL was transferred, bought or sold so it is simply circulating because it’s not treasury/vesting tokens.

In my opinion, what’s best for the protocol is taking the pure definition of circulating supply that all tokens that are not team/investors/treasury are circulating. The current tokenomics is a deterrent to anyone getting involved simply because the low circulating supply will be understood as a high amount of team/treasury tokens that will enter the market over a given time diluting the users holding.

I appreciate Ari’s comments around trying to make this data clear, but in a world where people may make quick decisions based on simply looking at CoinGecko/CMC and not researching further (to which they may not understand it anyway), all it’ll do is deter those people from getting involved due to the usual stigma of low circulating, high FDV tokens. In my opinion, the responses so far to this are thinking too much about the detail and taking example from others rather than what is best.

To finish, I think having a community snapshot on this is the best approach. If there’s no clear quorum to proceed with this SLURP, then it could backfire into negative press around changed displayed tokenomics making it an own goal based on the outcome we want to achieve anyway.

[candide]

IMO

The strongest argument against this measure is the general lack of liquidity of the NFT market.

-If PRO camp’s argument is that the time lock crafts an NFT, and that this NFT may still be in circulation, then the illiquidity of the NFT market at this stage suggests an inability to introduce the product into circulation–blunting the argument.

*side idea, could we not have an NFT marketplace on our own SDL portal?

-Ultimately, these notions of owner owned SDL, vested SDL, creator locked SDL is unconvincing in the decentralized (DAO) landscape; if the idea is that each wallet contributes and breathes meaning to the protocol, I don’t see how a “retail” wallet is different than a owner/nop vested wallet…and so I don’t buy the argument that if one locks it’s “out of circulation”, and the other locks it’s "still in circulation’ because it was bought from “a market”, but then it got "locked’, but so it’s still in circulation. (Personally, I feel that they are all locked.) The predatory behavior could still emerge from a “retail” player.

-The FDV metric argument is so-so. Perhaps raising it may enable greater exit liquidity from players who like to buy into protocols with certain levels of FDV, and I suppose that would be positive for our nops that need to raise capital. This would introduce volatility to the $SDL. I am not intrigued by the FDV metric, but am more concerned about what it does to the market capitalization of the project, essentially raising it from 11 million to about 30 million. I don’t like it, (I don’t like increasing our mcap without the obvious lack of value to our own holdings) but it does raise other concerns, which lead one to potentially subscribe for this SLURP and enabling the correction.

The strongest argument for this measure is the fact that we may in our current form be falsely/inaccurately lowering our mcap, leading future investors to inaccurately estimate and falsely elevate their expectations in terms of total returns. For instance, a buyer of this token may consider the future roadmap to reach a 100x future valuation, but the project may never reach this valuation because of the manner in which FDV is calculated. As a current token holder, we may need to take this hit to our ego, to more properly inform future token holders.

-Further affirming the circulatory nature of the time locked token, could also morally enable us in the future to potentially unwrap/unlock the timelocked tokens should market circumstances require us to do so, given that we have elected our conviction that these NFT wraps are in fact circulatory in nature.

Happy to hear from you folks. Feel free to add color to these reflections if you feel you need to do so. Would love to hear from a couple of the NOPS who have experience with LDO token (not in regards to whether there is a locked moiety, but merely to listen to what they feel the best way to represnt FDV might be given their experience in the industry).