Soarchain has a comprehensive token economy model centered around its native MOTUS tokens. This blog post is a simplified overview of the token economy mechanics. It provides an overview of the Soarchain Token Economy, focusing on its token allocations, distribution mechanisms, and reward calculations.
MOTUS Token: Utility and Functionality
The primary purpose of MOTUS tokens is as an exchange currency throughout the Soarchain network through dual purpose mechanics.
Primarily, it acts as a means of exchange across the network, facilitating payments for services, dApps, and transaction fees. On top of that, MOTUS tokens are rewarded to participants for contributing their vehicle's connectivity and computational resources, aligning with the network's Proof of Availability (PoAv) mechanism.
To sustain the dual purpose of the token exchange, each epoch is dynamically calculated and portions of tokens are minted based on the network activity and then distributed amongst participants who prove their availability within the network through Proof of Availability (PoAv). This ensures that users who actively contribute to the security and stability of the platform are rewarded accordingly.
Soarchain's token model provides users with a secure way to exchange value within the platform and receive rewards for participating in its network. Having both uses for its tokens creates an incentive structure that encourages active engagement from those involved for them to reap maximum benefits from their interaction with the Soarchain network. This balance between usage and reward makes Soarchain stand out.
Soarchain's token economy is built on several foundational pillars
Utility and Demand: The MOTUS token serves as the primary means of access to the rich ecosystem of mobility-related applications and services, creating consistent demand for the token. As more users, developers, OEMs, and other stakeholders participate in the ecosystem, the demand for the token will naturally grow. Additionally, token usage in services such as insurance, vehicle maintenance, energy distribution, road safety, and more will further drive demand. The diverse range of users, including non-crypto individuals, will further contribute to the growing demand for the token. These users will engage with Soarchain not simply for the rewards, but for access to a myriad of applications. We are creating an app store for cars where the main transactions are handled by MOTUS tokens.
Network Effects: Following Metcalfe's Law, the value of MOTUS tokens is directly linked to the network's growth, establishing a positive feedback loop that fosters increased participation and value.
Token Economics: The gas-based nature of the token economy ensures continuous circulation, supporting a healthy, sustainable economic environment.
Data Monetization: Data shared by vehicle owners represents a lucrative resource, offering additional revenue streams that bolster the token's value.
Scarcity: A limited supply of MOTUS tokens, coupled with staking mechanisms, introduces scarcity, potentially driving value appreciation as the ecosystem expands.
Token Allocation and Distribution
The Soarchain ecosystem is powered by 1.9 billion MOTUS tokens. 51.4% is earmarked for distribution as rewards to network participants. This allocation is designed to ensure long-term sustainability and encourage ongoing engagement within the network. The rewards are designed to provide long-term sustainability into our economics model development that encourages continued engagement within these parameters over time. These 51.4% are mainly attributed to three groups: i) V2N rewards 22.6%, ii) V2V rewards 15% and iii) Staking rewards 13.8%.
The Network Rewards
51.4% of the total supply will be distributed as a reward for network participants under three main categories.
In the framework of Soarchain's token economy, a pivotal component is the Vehicle-to-Network (V2N) rewards system. This system is designed to distribute network incentives to participants who are actively involved in V2N challenges, primarily segmented into two categories: V2N Broadcasters and V2N Runners.
1. V2N Broadcasters: The Data Collection and Transmission Agents
V2N Broadcasters play a crucial role in the Soarchain ecosystem, primarily involving data collection and transmission from vehicles to the network. These are typically vehicles or devices outfitted with advanced technology capable of interfacing with the Soarchain network.
Functions of V2N Broadcasters:
Data Collection: They gather a variety of data from vehicles, including performance metrics, location, environmental conditions, and more.
Data Transmission: The collected data is transmitted to the Soarchain network, usually via an internet connection, enabling real-time or near-real-time data flow.
Token Rewards: V2N Broadcasters, or their operators, earn MOTUS tokens as rewards.
2. V2N Runners, The Processing and Validation Nodes: V2N Runners are specialized nodes within the Soarchain network that serve as intermediaries between the V2N Broadcasters and the Soarchain blockchain. They play a vital role in data handling, processing, and validation.
Functions of V2N Runners:
Data Reception: Runners are responsible for receiving data from multiple V2N Broadcasters. They are capable of handling large volumes of incoming data efficiently.
Data Processing and Validation: Upon receiving the data, Runners process and validate it. This process can involve checking the data for completeness, accuracy, and integrity. They might also be involved in formatting the data for blockchain compatibility.
Data Storage (Temporary): Some Runners may temporarily store data as part of the processing or validation process.
Token Rewards: Just like V2N Broadcasters, Runners also earn tokens for their role in the network. Their rewards are typically based on the volume of data they process and the efficiency and accuracy of their operations.
Emission Schedule and Reward Mechanism
The V2N reward system employs an algorithm intricately linked to network activity and participant count, ensuring equitable distribution of rewards. This algorithm is designed to reflect each participant's contribution to the network accurately.
Key Aspects of the V2N Reward Algorithm:
Diminishing Returns: As the number of undertaken challenges increases, the tokens minted per challenge decrease, indicating a diminishing return of V2N rewards per challenge.
Decay System: Initially, tokens are minted per challenge at a constant rate. After every 192 epochs (equivalent to one day), this rate decays, aligning with the dynamic nature of the network.
Influence of Previous Activity: The minting rate for each challenge is influenced by the total number of challenges from the previous day, ensuring a responsive relationship between network activity and reward issuance.
Daily Decay Rate: Determined by the number of daily challenges, correlating with the level of active V2N participant engagement in the network.
V2N Reward Calculation:
The calculation of v2nMintedperChallange incorporates several coefficients, A, B, and C, which are predetermined.
These calculations take into account the initial token minting per challenge, the number of minted tokens, and the remaining tokens in the system.
The vehicle-to-vehicle (V2V) rewards mechanism stands as a key innovative feature. These rewards are allocated to participants actively involved in V2V challenges, with the primary categories being Broadcast V2V Messages and Receive V2V Messages.
Categories of V2V Participants
Broadcast V2V Messages: Participants in this category are responsible for broadcasting relevant vehicular data to other network participants. This could include a range of data points essential for vehicular communication.
Receive V2V Messages: This category includes participants who receive broadcasted data from others in the network. Their role is crucial in maintaining the flow and utility of vehicular data across the Soarchain ecosystem.
Equitable Distribution of Rewards
The allocation of V2V rewards is governed by a carefully crafted algorithm that takes into account both network activity and the total number of participants. This approach ensures that the rewards are distributed fairly, mirroring each participant's contribution to the network's growth and functionality.
Key Features of the Reward Mechanism:
Progressive Adjustment: The number of tokens minted per challenge decreases as the total count of completed challenges since inception increases. This design fosters a sustainable and balanced reward system, evolving as the network matures.
Equity and Incentive Compatibility: Soarchain upholds the principles of fairness and incentive compatibility in its reward distribution, aiming to encourage robust participation and sustainable network growth.
Reward Allocation Breakdown
The exact breakdown for the distribution of V2V Network Rewards is detailed in the table provided below. We uphold the principle of fairness and incentive compatibility in our reward distribution, aiming to foster robust network participation and sustainable growth.
Calculation of V2V Rewards
The v2vMintedperChallange is determined using specific equations that factor in the network's dynamic nature:
Setting Coefficients: Coefficients A, B, and C are predetermined and will be set at the commencement of the Mainnet event.
Daily Token Minting: The number of tokens minted per V2V challenge for a given day (d) is calculated based on the previous day's (d−1) activities.
Initial Token Minting: The initial number of tokens minted per challenge is specified, establishing the baseline for reward calculations.
Staking rewards within Soarchain's refined token economy play a critical role in ensuring the network's sustainability and scalability. This system is meticulously designed to align with the platform's overall goals and to ensure the active participation of network validators.
Allocation and Functioning
Total Allocation: A significant portion of the total token supply, precisely 262,200,000 tokens or 13.8%, is earmarked for staking rewards.
Base Staking Reward: This is the foundational quantity of tokens minted for staking rewards each day, calculated over 192 epochs.
Monthly Staking Reward Adjustment: This dynamic component is recalculated at the start of each month to reflect the preceding period's network usage.
Challenge Variation Rate
A crucial aspect of the staking rewards mechanism is the "Challenge Variation Rate". This rate:
Represents the month-over-month change in the cumulative count of V2N and V2V challenges.
Is recalculated monthly to reflect recent network activity.
Directly influences the "Monthly Staking Reward".
The adjustments to the Base Staking Reward continue until approximately 80% of the staking rewards pool (around 210,000,000 tokens) has been minted.
Upon reaching this threshold, the Base Staking Reward undergoes a halving, and this process continues each time half of the remaining staking rewards pool is minted.
By dynamically adjusting the staking rewards based on network activity and employing a measured approach to changes, Soarchain ensures the long-term viability and stability of its token economy. This evolving and resilient system underpins the network's scalability, encouraging continuous engagement from validators and stakeholders alike.
This document outlines a strategic and comprehensive plan for Soarchain Protocol Economics. However, the nature of blockchain protocols is such that they require constant evolution, critical assessment, and innovative thought. The Soarchain community, therefore, must remain vigilant, open to new information, and flexible in its strategies to adapt to the changing landscape.
Regular assessments of key economic indicators like cost structures, revenue models, and protocol expenditure are crucial. For Soarchain to effectively and efficiently scale in a decentralized model, it requires the diverse skills and active participation of its community members.
Soarchain stands as a potential game-changer in the field of sustainable decentralized physical infrastructure networks. The economic model presented in this document is designed to be adaptable and resilient, capable of thriving in favorable conditions and withstanding challenges during more difficult periods. The foundation for the long-term success of Soarchain lies in the collaborative spirit of its community and the continued growth and improvement of the protocol.
Data Provisioning Request Economics: Detailed examination and development of the economic model for Data Provisioning Requests (DPRs), including analyzing the cost-benefit aspects for all involved parties and establishing fair compensation models.
Data Marketplace Economics: Exploration and structuring of the economics surrounding the Data Marketplace within Soarchain, focusing on the valuation of data, market dynamics, and the interplay of supply and demand.
Data Contracts and Dapps: Further refinement of the data contract system, including the flow of data within Soarchain. This will involve a deep dive into the mechanics of data contracts and dapps, understanding the roles and commissions of involved parties, and ensuring a seamless and efficient data exchange process.
We published the complete Protocol Economics here. Please feel free to contribute with comments and feedback.