OVL is the native token of Overlay Protocol. It’s an ERC-20 token on Ethereum blockchain. The token shall be used to enter positions/trades on the markets offered on Overlay Protocol, and to settle positions/trades when closing a trade.
To enter a trade, a user of Overlay Protocol would simply lock OVL to a market, going long or short for that position. On closing the position, the trade could either be profitable, unprofitable or at a break even point. If the trade is profitable, the protocol mints OVL tokens according to the delta of the trade. These tokens are added to the circulating supply of OVL. If the trade is unprofitable, the protocol burns OVL tokens of a value equivalent to the loss sustained (and these tokens are removed from the circulating supply of OVL). No tokens are minted or burned in case a trade is closed at a break even.
Initial supply at TGE is set to 8,000,000 OVL tokens.
The OVL supply, by design, is dynamic; OVL will be dynamically minted and burned when trade positions are exited by users of Overlay Protocol.
53.53% of the total supply (4,282,400) is reserved for the community, while the rest of the supply (3,717,600) is reserved for the team and early investors (subjected to vesting).
Further details of the team and early investors distribution will be shared here, once it’s fully finalized.
PlanckCat DAO (PCD) is the decision-maker of the community distribution.
Disclaimer: Please note that any smart contract can use the name OVL and create an ERC-20 token. Be super cautious, and only use official channels to access the contract address.