The AKRO tokenomics 101: Part I — validation rewards
Hello AKRO community! After a busy week with Huobi Global, we’re back with our technical updates. The team has been researching to find the perfect token model for a long time, and it’s time to start explaining everything you can do with your AKRO, and the rewards you can get for your network activities. In this installment, we will introduce the staking feature of the AKRO.
Akropolis native token (AKRO) is used for bonding (staking), and is required for user participation in the AkroChain consensus which works as DPoS.
AKRO is the fuel of the incentive mechanism designed to get users to participate in elementary units of the network — in short, AFOs taking part in block validation. Other functions of AKRO token are participation in the network governance and use as collateral in case of attracting a loan, but we will describe them in a second installment of this blogpost series.
Back to the validation: every holder of AKRO tokens can participate in the validation process or delegate tokens to any other validator and earn a part of the corresponding reward.
How does this work?
AKRO is used for participation in the AkroChain consensus as a validator. Each validator needs to bond (stake) tokens. The minimal stake is defined automatically so that only predefined number of nodes validates the network, others stand as nominators. The initial number of validators is established by the Akropolis team and can be changed by token holders’ vote.
AFOs and Validation:
We consider AFOs as an core unit of our network. Based on this, we want to motivate AFOs to be validators of our chain. To achieve this, we have to provide sufficient rewards for our validators, in order to motivate their activity in the network. Therefore we decided to implement a fee (cost of our service) for the majority of operations inside the AFOs to provide sufficient rewards for the validators. This fee is variable, and its value is determined in the governance process.
So, each AFO that also acts as a validator in the Akropolis network would receive transaction fees + part of all fees (cost of service), that is paid by all AFOs in the network.
Thus, if AFO is an active validator, it can reduce commissions and even earn additional money to its members by participation in blocks validating. In opposite, any AKRO holder, who is not participating in block validation has zero profits. On the market layer tokens can be partially slashed in case of default on debt taken by AFO.
All AKRO holders can participate in block production. The reward for block producers is a sum of the transaction commissions on the ledger layer and commissions, charged on the market layer In the case of dishonest behavior of validator, tokens are slashed.
This is all for now — please remember that so far, we have only covered validation and block production and its subsequent rewards, and evaluated scenarios for the participation in consensus.
In the next blogpost, we will explain how AKRO token holders can stake their tokens and access other incentives in the network, by taking part in governance, staking to signal trust, and other exciting functionalities.
Learn more about Akropolis:
Website: https://akropolis.io/
Twitter: https://twitter.com/akropolisio
Telegram: https://t.me/akropolis_official
Do you have any questions? Please ask by email! team@akropolis.io
