For any project whose economy is based on tokens, this is one of the most important issues. And one of the goals we set for ourselves at the stage of launching the test network is to build a tokenomics model for the main network and run it on the test network. As you know tokenomics is a term that captures a token’s economics. It describes the factors that impact a token’s use and value, including but not limited to the token’s creation and distribution, supply and demand, incentive mechanisms, and token burn schedules.
The economics of the IDNTTY infrastructure will be its own $IDN utility token , which will be used to perform actions within the ecosystem and products based on it. When we designed the tokenomics we wanted to consider the interests of several potential user groups and our goal was to balance the transactions fees in a way that would benefit all of these participants.
Group #1 — Web 3 Ambassadors & Delegates
This group, in our opinion, includes several categories at once:
- Crypto-enthusiasts, who will support the decentralized infrastructure and the network as a whole, become delegates and participate in the formation of new blocks of the network
- Developers and product owners of infrastructure-based services who want to build the economy of their product around the token
In our view, this group is interested in two important aspects of token circulation:
- getting the maximum benefit from forming blocks and receiving transaction fees in these blocks
- minimizing inflation of token value due to the generation of new
We plan to generate a new block at intervals of 30 seconds, so about one million blocks per year will be generated. At the same time, we are well aware that at first there won’t be a large number of transactions in blocks and in order to support the motivation of the participants of this group — the reward for the generation of blocks will be reduced in half the next 5 years — from 1 $IDN per block every one million blocks and stop at the mark of 0.05 $IDN per block after 5 million blocks.
Thus, the minimum reward that this group of users will receive in the next 5 years will be 1,900,000 $IDN tokens. And here it is important to note that it is the minimum value if in the next 5 years there will be no transaction at all in the network.
It is important to note that for basic transactions such as the transfer of tokens between members of the network will be as profitable as possible cost per storage minFeePerByte — will be only 0.000001 $IDN, thus transaction fee simple transfer transaction will be less than 0.001 $IDN, which is negligible.
The main rewards should be received by network members as a result of targeted user transactions. For example, base fees for delegate register transaction will be ~99.9 $IDN, such transactions should motivate participants to maintain the network and receive rewards for them.
Group #2 — End users
The main users of the basic services within the IDNTTY infrastructure, it is they who have to perform actions within the network with the corresponding transactions. For this group of users, the basic transactions will be the following set:
- Set feature ~ 0.99 $IDN — transaction that allows you to set the parameters of your public digital identity
- Validate feature ~ 4.99 $IDN — transaction that allows you to validate one or more parameters of someone else’s digital identity
- Data notary ~ 0.24 $IDN — transaction allowing to notarize data and documents in public network
In our opinion, such a set of transaction fees on the one hand will allow users to comfortably create their digital identity profile and conduct signature and document notarization operations on the IDNTTY public network. Of course we have a few more ideas on how to motivate end users to also be interested in using the network tokens, including voting for delegates, but we’ll describe that in a separate post a bit later.
Group #3 — Public & corp authorities
The last, not very large, but nevertheless very important group of participants in the public infrastructure. It is the members of this group that must add value to digital identity, validating them by providing public services to users. For this group the following set of transactions is targeted:
- Set feature ~ 19.99 $IDN — transaction that allows you to add public information and descriptions for authorities
- Delegate ~ 4.99 $IDN — transaction that allows you to delegate credentials to public authorities
Thus, by designing the $IDN token economy we wanted to make transaction fees comfortable for target end-user transactions and provide sufficient motivation for Web 3 Ambassadors who are interested in supporting and developing projects related to decentralization.
If you have any comments or any other feedback on the economics of the token — please leave your comments below the post.
