Sep 28, 2024
Tokenomics
Reflexive and Dynamic Ecosystem Incentive Emission Algorithms
Reflexive and Dynamic Ecosystem Incentive Emission Algorithms
Static token economies have been a long-standing model for crypto projects, using fixed emission schedules and predefined reward structures. However, some projects have been exploring reflexive and dynamic incentive emission algorithms that adjust incentives in real time, based on a variety of metrics and indicators like user behavior and ecosystem health. These dynamic economies promise more sustainable growth, active participation, and enhanced value for token holders.
In this report, we explore how some projects DIMO, Helium, Filecoin, Inverter Network, and Monitize.ai (through VADER’s tokenomics) are implementing dynamic token economies. From real-time reward adjustments to performance-based issuance, these ecosystems are an example of a potential upcoming trend in tokenomics.
DIMO
DIMO is a blockchain-based open and secure mobility platform that is aiming to make cars smarter and more programmable. Through DIMO, drivers and fleets are able to connect their vehicles, access innovative apps and services, and earn rewards. Devs and enterprises can also build mobility products using DIMO’s tools, connectivity, and dataThey explain how Bitcoin is an example of a rigid and predictable token economy which fulfills its purpose of it being a digital gold. However, they explain that the DIMO token is not meant to act the same as BTC, and thus, it’s meant to be an asset that powers a dynamic ecosystem that will change throughout time.
DIMO Token Utility
Incentives and Rewards
For generating valuable data
Spend in the marketplace, hardware manufacturers, and ecosystem developers
DIMO Design Principles
Be technically feasible to implement
Be reasonably predictable and sustainable
Be simple and understandable
DIMO Dynamic Vesting Mechanisms
Some of the features are currently live, but many others will be live until later stages.
Baseline rewards are calculated using a points formula. All users earn points based on several variables, and the number of points they earn dictates their share of that week’s issuance.
Baseline Issuance: drivers are rewarded for connecting their cars and streaming data to the network. It ensures consistent engagement even without direct demand for the data.
Marketplace Issuance: Rewards users when their data is consumed by developers and partners through licensed DIMO apps. These transactions are also tied to token burns, enhancing the deflationary economy
Baseline Issuance ends in 40 years, unless modified by a future DIP (DIMO Improvement Proposal)
Tokens are distributed on a weekly basis based on connection type, duration, and hardware:
Hardware Impact: Different devices contribute differently:
Full-Size OBD Dongle (DIMO AutoPi): Higher rewards due to advanced data capabilities.
Mini OBD Dongle (DIMO Macaron): Lower rewards, as the data functionality is more limited by the device.
Points increase over time as users maintain consistent connectivity (through streak bonuses)
The distributions are proportional to the total number of points collected that week and each users’ contributions (for example if 10,000 connected cars generate 60M points and User1 earns 9,000 points, the user will receive 0.015% of the week’s tokens). The distributions are also distributed regardless of if a customer is using the users’ data.
The amount that is distributed each week will start at 1,105,000 $DIMO and will decrease 15% each year.
Users climb rank levels for consistently connecting into the network, and in the same way, can fall back if they don’t connect.Users have the ability to lock up $DIMO tokens to increase their weekly baseline earnings, similar to the streak bonus.
Hardware manufacturers, node operators, and client publishers have to stake tokens as a security deposit as a condition for receiving a license, but they receive no yield for staking
Additionally, as a mechanism for the platform’s maturity and anticipating demand for vehicle data matures, baseline rewards will taper off, shifting focus to marketplace-based rewards to ensure long-term sustainability.
Helium HIP51 Omni-Protocol PoC Incentives
Helium has adapted their token economy with the aim of scaling the network and supporting the anticipated growth of users, devices, and types of decentralized network protocols. Each subnetwork built atop Helium is called a Decentralized Network Protocols (DNP) which has a subDAO and their own Decentralized Network Tokens (DNTs). Through the Helium HIP-51, they introduce the allocation and management of rewards through subDAOs with flexibility given to each Decentralized Network Protocol (DNP).
HNT Dynamic Vesting Mechanisms
Each DNP operates as its own subDAO with its own governance token (DNT). DNTs have predefined emission schedules but are independently managed by each subDAO. Stakeholders like miners and oracles are rewarded in DNTs, with specific distributions established by subDAO governance
HIP51
On the other hand, veHNT (vote-escrowed HNT, Helium’s native token) acts as the governance mechanism for the broader Helium DAO. Users gain voting power by locking up HNT tokens, with a multiplier based on the lockup duration (e.g., 6 months = 1x, 4 years = 100x). veHNT holders influence subDAO creation, reward distribution models, and network-wide parameters.
Helium’s dynamic vesting model allows subDAOs to adapt their emission schedules and rewards based on their growth stage, ensuring alignment between incentives and network development.
There are additional improvement proposals that make this a 3-part foundation for Helium’s economic model that will maintain their scaling ecosystem
Reflexive and Dynamic Ecosystem Incentive Emission Algorithms
Static token economies have been a long-standing model for crypto projects, using fixed emission schedules and predefined reward structures. However, some projects have been exploring reflexive and dynamic incentive emission algorithms that adjust incentives in real time, based on a variety of metrics and indicators like user behavior and ecosystem health. These dynamic economies promise more sustainable growth, active participation, and enhanced value for token holders.
In this report, we explore how some projects DIMO, Helium, Filecoin, Inverter Network, and Monitize.ai (through VADER’s tokenomics) are implementing dynamic token economies. From real-time reward adjustments to performance-based issuance, these ecosystems are an example of a potential upcoming trend in tokenomics.
DIMO
DIMO is a blockchain-based open and secure mobility platform that is aiming to make cars smarter and more programmable. Through DIMO, drivers and fleets are able to connect their vehicles, access innovative apps and services, and earn rewards. Devs and enterprises can also build mobility products using DIMO’s tools, connectivity, and dataThey explain how Bitcoin is an example of a rigid and predictable token economy which fulfills its purpose of it being a digital gold. However, they explain that the DIMO token is not meant to act the same as BTC, and thus, it’s meant to be an asset that powers a dynamic ecosystem that will change throughout time.
DIMO Token Utility
Incentives and Rewards
For generating valuable data
Spend in the marketplace, hardware manufacturers, and ecosystem developers
DIMO Design Principles
Be technically feasible to implement
Be reasonably predictable and sustainable
Be simple and understandable
DIMO Dynamic Vesting Mechanisms
Some of the features are currently live, but many others will be live until later stages.
Baseline rewards are calculated using a points formula. All users earn points based on several variables, and the number of points they earn dictates their share of that week’s issuance.
Baseline Issuance: drivers are rewarded for connecting their cars and streaming data to the network. It ensures consistent engagement even without direct demand for the data.
Marketplace Issuance: Rewards users when their data is consumed by developers and partners through licensed DIMO apps. These transactions are also tied to token burns, enhancing the deflationary economy
Baseline Issuance ends in 40 years, unless modified by a future DIP (DIMO Improvement Proposal)
Tokens are distributed on a weekly basis based on connection type, duration, and hardware:
Hardware Impact: Different devices contribute differently:
Full-Size OBD Dongle (DIMO AutoPi): Higher rewards due to advanced data capabilities.
Mini OBD Dongle (DIMO Macaron): Lower rewards, as the data functionality is more limited by the device.
Points increase over time as users maintain consistent connectivity (through streak bonuses)
The distributions are proportional to the total number of points collected that week and each users’ contributions (for example if 10,000 connected cars generate 60M points and User1 earns 9,000 points, the user will receive 0.015% of the week’s tokens). The distributions are also distributed regardless of if a customer is using the users’ data.
The amount that is distributed each week will start at 1,105,000 $DIMO and will decrease 15% each year.
Users climb rank levels for consistently connecting into the network, and in the same way, can fall back if they don’t connect.Users have the ability to lock up $DIMO tokens to increase their weekly baseline earnings, similar to the streak bonus.
Hardware manufacturers, node operators, and client publishers have to stake tokens as a security deposit as a condition for receiving a license, but they receive no yield for staking
Additionally, as a mechanism for the platform’s maturity and anticipating demand for vehicle data matures, baseline rewards will taper off, shifting focus to marketplace-based rewards to ensure long-term sustainability.
Helium HIP51 Omni-Protocol PoC Incentives
Helium has adapted their token economy with the aim of scaling the network and supporting the anticipated growth of users, devices, and types of decentralized network protocols. Each subnetwork built atop Helium is called a Decentralized Network Protocols (DNP) which has a subDAO and their own Decentralized Network Tokens (DNTs). Through the Helium HIP-51, they introduce the allocation and management of rewards through subDAOs with flexibility given to each Decentralized Network Protocol (DNP).
HNT Dynamic Vesting Mechanisms
Each DNP operates as its own subDAO with its own governance token (DNT). DNTs have predefined emission schedules but are independently managed by each subDAO. Stakeholders like miners and oracles are rewarded in DNTs, with specific distributions established by subDAO governance
HIP51
On the other hand, veHNT (vote-escrowed HNT, Helium’s native token) acts as the governance mechanism for the broader Helium DAO. Users gain voting power by locking up HNT tokens, with a multiplier based on the lockup duration (e.g., 6 months = 1x, 4 years = 100x). veHNT holders influence subDAO creation, reward distribution models, and network-wide parameters.
Helium’s dynamic vesting model allows subDAOs to adapt their emission schedules and rewards based on their growth stage, ensuring alignment between incentives and network development.
There are additional improvement proposals that make this a 3-part foundation for Helium’s economic model that will maintain their scaling ecosystem
Simplicity Consultancy FZ LTD
Social
Simplicity Consultancy FZ LTD
Social
Simplicity Consultancy FZ LTD
Social