Native Token
An Introduction to our Token Model and Staking
At a high level, Native Token has two primary functions:
- Stake into Communities to register interest and generate local currency
- To act as a reserve currency that provides liquidity and convertibility between currencies
At a local level, this model will have impact on many components related to a community’s economic system including:
- More efficient infrastructure for things like lending and developing projects
- Clearly defined community value and more transparent spending
- Smaller economic cycles and independent, but connected, monetary systems allow for users to benefit directly from their contributions as the community grows
Staking
A primary function of tokens is the ability to allocate interest to projects, or into new types of assets. Prior to the emerging ICO phenomenon, there has never been such a seamless method of wealth distribution into various projects, on top of having instantly liquid markets. Token launches can be viewed as staking at a large scale, as contributors are directing funds in one form to support the development of a project they are interested in. At a smaller scale, even purchasing a CryptoKitty has an element of staking. By acquiring one, a user is signaling that an asset has value, and is thus supporting the reputability and legitimacy of the asset type.
Within projects, meaning once the tokens are already purchased, there are some interesting staking models taking place as well. In District0x you can vote on upcoming Districts, which is essentially staking interest into them. Another example is Decentraland you can stake MANA into various districts to support the development an aspect of the decentralized VR world. You can also stake MANA to acquire LAND which converts the MANA into parcels that you can build on.
In some instances we spend to utilize tokens to access the service or application. A payment transaction is useful with things like ETH or SALT because you pay a little bit to use the service, either each time a transaction is executed, or as a one time fee at a predefined frequency — like in SALT’s model. Staking often just requires ownership of certain tokens to participate. In other cases, staking one form of token into a contract generates another form.
Native Token utilizes staking as a membership function. When a user decides to join Native, they send ETH or BNT into the Native Token contract. This sends Native Tokens to the user. Next, the user takes their Native tokens and sends them into the Community of their choice. Community Tokens are generated at a set conversion rate and sent to the user’s wallet.
This is in some ways a conversion as well, but it is important to note that the underlying staked Native Tokens are sent to the Community Fund, which can be utilized for projects and tasking. The value of the Native Tokens is not lost from the staking process and that the primary function of the token is to provide access to the Community.
Reserve Currency for Liquidity and Convertibility
Bancor introduced a method to algorithmically price tokens based on a calculation that takes into consideration three variables:
- Fluctuating token supply
- Reserve weight or the amount of base currency to convert back into ETH or BNT
- Value of base currency tokens
With the calculated price based on these variables, any token created on the Bancor Protocol inherits a unique set of functionalities including:
- Instant liquidity
- Single party exchange
- Standardized convertibility
We touched on some of the model above, but let’s break it down more fully here:
You can see how funds are allocated into Native Token and then flow down into the Communities. The split that takes place between the reserve pool and the development fund allows for instant liquidity for the tokens, allocation of a pool of capital for platform development at the Native Token level, and the execution of goals at the Community level.
The Future of Native Token and Staking
Native Token is taking the opportunity to put into practice some of the core philosophies of community economics discussed by these incredible minds:
- Robert Swann — Sustainable Community Currencies
- Hakim Bey — Temporary Autonomous Zones
- Simon De La Rouviere — Curation Markets
- Dimitri De Jonghe — Curated Governance
- Friedrich Hayek and the team at Bancor — Global Liquidity Network
Native’s synthesis of content curation, local currencies, and sustainable communities will allow for effective experimentation of economic systems and governance models.
Thanks for reading. To learn more about Native and to stay up to date on the project, here are some useful links:
