In this article we try to walkthrough the proposed protocol’s tokenomics.
Digital land model:
A 314M square meters square matrix in which each square meter has a default price of 1 VERSE, Solarity’s native utility token.
The project’s architecture is inspired by the decentraland project.
Three layers architecture:
- Consensus layer (Solana)
- Land content layer (IPFS)
- Real-time layer (Solarity/Cloud Computing Network)
So the land is actually a NFT.
VERSE Tokens represent ownership in the Solarity universe.
- 1 default square meter of land initially equals 1 VERSE, Land is scarce by definition, VERSE tokens aren’t.
(Every piece of land is a NFT composition of atomic NFTs that are 1 square meters parcels and are the basic building blocks of Solarity)
- Only 314M (pi*100M) of VERSE tokens for the first 2 years.
After the 2nd year we enable our inflation program.
- When Solarity’s DAO will make it so, the protocol’s revenue will be distributed to VERSE token holders, in $SOL terms.
- Holders of VERSE tokens can receive airdrops from projects launching on the Solarity Metaverse.
- Stakers of VERSE tokens can receive discounts on cloud computing fees. (this is the case for businesses operating as DAOs on top of Solarity)
- If a platform disconnects from Solarity, their VERSE tokens are transferred to the treasury and burnt, reducing the token supply.
Tenants DAPPs DAOs (Businesses that deploy on Solarity, we’ll call them DAPP for the sake of simplicity) are required to buy & stake VERSE tokens (with the 0.3% of their revenues, to pay for the cloud computation provided to their users). By staking the VERSE token they get incremental incentives to keep operating on Solarity like fees reduction and “spotlights” function for the business that staked the most.
When a DAPP ceases to operate on Solarity, its tokens are burnt, reducing the total supply. Their land is also redistributed equally to every user, prioritizing those without land.
VERSE tokens held by the DAO are sold at market prices from the Treasury to pay for expenses if revenues are negative and treasury’s raised funds are depleted.
(Treasury’s balances will be public and refreshed daily at UTC+0 = 00:00)
(anyone could have them in real time with a blockchain explorer and some scripts but we don’t wanna stress our community)
If revenues are positive, NO VERSE token will be sold.
Possibility of creating a synthetic VERSE token, collateralized by “virtual estate” on Solarity, to provide more liquidity to asset’s owners.
30% Community FUND
16% Airdrop over time
15% 1st public Auction
10% Seed round VC
6% Founding team
3% Science Education project grants
Airdrop over time means:
Every users from the first to the #1.3M receives:
5*(100–7.7ln(x/3 +1) tokens, where x means how many users are currently registered on the platform.
1st user: 500 VERSE, 2nd user: 488.92 VERSE
100th user: 363.85, 10’000th user: 187.68
This will allocate 50M Tokens to the first 1.3M users of the platform, rewarding the early ones through our distribution function.
Community FUND means:
A treasury’s fund of VERSE tokens to establish partnerships between protocols to bring their work on Solarity and make them feel part of the project by effectively granting them network shares, in the form of VERSE tokens, providing the best incentives to build on Solarity.
Any token distributed from the Community FUND will have a lock-up period with linear rate unlock.
VERSE tokens lock-up period:
VERSE tokens distributed at seed round and public auction are locked up for:
0–2 years: 10% linear unlock, unlocked daily.
2–3 years: 80% linear unlock, unlocked daily
3+ years: remaining tokens instantly unlocked
VERSE tokens easter egg:
You can burn an X% of the total INITIAL VERSE supply to gain X% voting power on the DAO’s “board”.
EG: The governance tokens are:
- 20% Founders
- 50% Community*
- 10% Advisors
- 20% Early investors (1st seed round)
Let’s assume I buy and burn 98% of all the INITIAL VERSE supply:
(The voting power is re-normalized using 100 + 98 as the common denominator)
- 10.1% Founders
- 25.25% Community*
- 5.05% Advisors
- 10.1% Early investors
- 49.49% Me who just burnt 98% of ALL VERSE that will ever be created.
Looks like a cool way to provide both the ability for latecomers to participate in the governance and the ability for the initial governance to raise additional capital without letting go too much control.
Governance tokens can’t be converted back to VERSE tokens.
*How to enable community voting?
Make on-chain polls with options decided by the rest of the digital board and let addresses vote directly on Solana, 1 address = 1 vote.
VERSE tokens programmed inflation:
From the second year Solarity will airdrop new tokens to token holders that staked the most during the previous years, using the formula:
The token supply will increase around 65% in the first year and will double in about 15 years. All of this token supply increase will go directly to the wallets of those who staked the token the most in the initial 2 years.
The operations funding function:
This function is proposed to be the one used to calculate the reward to be assigned to contributors.
The DAO sets a budget for some feature development, sets a timeline and sets a number of supposedly needed developers.
Using our formula a contributor is incentivized to either work at peak performance (peak performance = being excited to work on Solarity) or not work at all.
At the end of the month the monthly budget is redistributed among people that reached the blue line (x value of when the derivative function equals 1). Those that easily reached it are further exponentially compensated, those that barely reach it are rightfully compensated, those that didn’t reach it are not compensated.
If at the end of a month the compensations are less than the budget, the unspent budget is added like a jackpot to incentivize new developers to work on tasks needed, at a premium rate.
Walkthrough of the function:
This function is arbitrarily tuned to fit both the developers participation and the development schedule.
Steeper curves mean bigger rewards for developers.
(The x value here should be the progress made from 0, the initial state, and k, the number we want to assign to measure the completion of the project. It’s up to the DAO how to assign a x-axis value to every stage of the projects, this function works better with teams)
(the blue line is when the x value of the derivative function equals 1, the trigger event for exponential rewards, this way we give the possibility to the best developers to be rewarded exponentially)
0 <= a <=100: initial rewards share parameter
0 <= b <= infinity: base incentive parameter
0 <= c <= infinity: trigger reward, minimum success parameter
1 <= d <= infinity: delay parameter
0 <= h <= infinity: incremental incentive parameter
a behavior: (Initial reward threshold)
b behavior: (Linear constant dev. incentive)
c behavior: (How far is the target, combined with d)
d behavior: (How far is the target, combined with c)
h behavior: (Incremental dev. incentives)
Cloud computation stage 0’s model: mining pools
This infrastructure is imagined to be populated with individual miners, let’s say you’ve always wanted that rtx-3090 and Solarity could enable you to make money with it, when you’re not using it, to cover for the costs of the hardware.
You’d be paid in $SOL terms or you could use Raydium or Serum to swap the $SOL to receive whatever token you want in exchange.
Miners pool themselves and they get paid even if their service is not used, to maximize amateur mining participation to the ecosystem.
Once the cloud computing network is perfected, the model will switch to “winner takes all” mode because it’s inevitable that IF Solarity is a success, the economies of scale will make it unprofitable for an amateur to compete with a GPU/CPU farm.
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