Tracer is known for its Perpetual Pools products: tokenised non-liquidatable leverage positions that anyone can use; and that can represent any data feed, for example, a 1x long position on the BTC/USDC pair or a 5x short position on the hourly average temperature in Utah.
While Perpetual Pools tokens can allow unforeseen use cases from risk management to speculation, Tracer's value proposition goes way beyond what's immediately obvious. Tracer is not just Perpetual Pools; it's a full-fledged ecosystem of standardised financial products.
Token distribution mechanisms have adopted a lot of the structures from within the traditional financial world — including vesting schedules and vesting cliffs — which have resulted in some unintended consequences like adverse price action as tokens vest; and the inability of holders with large economic interests in a protocol to exercise governance control.
This paper presents a model of token distribution that allows token holders who are subject to vesting agreements to exercise the full power of their future governance rights, while also incentivising their long-term interests in the protocol.
In a convertible governance allocation, token holders are issued non-tradeable governance rights immediately, while their ability to trade the fungible governance token vests over time. A complementary mechanism disincentivises early partial redemption by extending the vesting schedule on the portion of tradable governance tokens still-vesting.