$SLN Token Utility
The Smart Layer ecosystem token, $SLN, has been launched.
Smart Layer is a new infrastructure layer for token utility and liquidity. The $SLN token is designed to capture value across the entire ecosystem inclusive of Smart Layer Network, Smart Layer Launchpad and all tools and technologies.
It has a maximum supply of 100 million tokens with detailed tokenomics here
Every token project represents potential demand for $SLN. And $SLN is positioned at the forefront of several rapidly growing narratives, from Gaming to DePIN to DeFi and more.
This article answers 4 important questions:
- What are the utilities of $SLN?
- How is $SLN circulating supply optimized?
- What will drive demand across the ecosystem?
- What’s the bullish case for $SLN in an exploding token-economy?
Let’s get into it.
What are the utilities of $SLN?
The token has 3 fundamental utilities across the ecosystem:
1. Staking
Projects and users can stake to earn $SLN rewards, $SLN fees, receive discounts on usage, receive discounts on sales price, vote in governance, or to become eligible for Launchpad projects.
2. Payment
Projects and users can use $SLN to pay for the usage of the Tools, Network or Launchpad, hire services, and much more.
3. Gas and transaction fees
All the transaction fees paid across Tools, Launchpad and the Network are collected in $SLN, similar to how Ether is used for gas.
How is $SLN circulating supply optimized?
The Smart Layer ecosystem leverages these utilities to control circulating supply, and puts a model in place to drive healthy price and ecosystem growth.
What will drive demand across the ecosystem?
Demand is designed to come from the use of 4 key components of the Smart Layer Ecosystem, and the various ways Stakers, Projects, Developers, and Holders can engage with them and benefit from $SLN. Each of these actions generate a fee in $SLN for Stakers, Projects, and Smart Layer.
These components are:
- ERC-5169 Standard Tooling
- TokenScript Framework Tooling
- Smart Layer Launchpad
- Smart Layer Network
When using any one of Smart Layer’s components or tooling, users pay in $SLN, stake in $SLN or incur a fee in $SLN. The token can be used with each of these in several ways:
- Stake $SLN to setup Service Nodes and earn inflationary rewards and fees
- Stake $SLN to earn from Launchpad projects, become eligible for third party airdrops, promotions and other benefits.
- Stake $SLN to vote in governance
- Delegate $SLN to earn yield from Node Operators
- Use $SLN to pay for services in the marketplaces and within projects
- Projects pay in $SLN to use key components or tooling from the Smart Layer Ecosystem
- Use $SLN to pay for gas transactions
These are but some drivers of project demand, secured by a network of staking node operators.
Stakers are rewarded with inflationary rewards over a 48 months period, issued on a diminishing curve that promotes early adoption and long-term investment. For instance, at launch, you could receive 10% in $SLN Rewards and 3% in fees paid in $SLN (subject to change).
Inflationary rewards trend to zero and are gradually replaced by $SLN fees, which rise with demand, growing yield for Stakers.
And as demand for use of the Ecosystem components grows, more participants stake and spend $SLN, reducing its supply. Collected fees may be used to buy back and further decrease supply.
An Example
A Gaming Company decides to tokenize their user accounts and sign ups. They begin by using 3 core elements of Smart Layer: ERC-5169, TokenScript and the (Smart Layer) Network. For every new player who joins, a 1.5% fee is collected. The Gaming Company then promotes the game to the 600k Smart Layer community via Launchpad, using $SLN. Finally, they tokenize some of the high value items, adding an interface to each item, again using $SLN.
What’s the Bullish case?
Because of the way Smart Layer Ecosystem combines on and off-chain capabilities, it means endless integration opportunities across crypto and traditional markets.
- Every traditional industry innovating with tokenization.
- Every token on the planet represents potential demand.
- Every chain will be compatible, starting with EVM.
The ecosystem is in a position to capture value from the growth of the entire Web3 universe. Consider the growth of some promising industries:
- Gaming is expected to grow from 245 billion to 682 billion by 2030, with over 1.4 billion global users [s] [s]
- The Web3 Gaming market is projected to expand from $24 to $133 billion, from 2023 to 2033 [s]
- DeFi is forecasted to reach $70-$90 billion by 2030, growing annually by 40%. Revenue is projected to grow from $26 billion in 2024 to $230 billion by 2030, with 22 million users. [s] [s] [s] [s]
- DePin currently has 650 projects with a market cap of $20 billion, underpinning trillion dollar industries: Data Computation, CDNs, Wireless Networks, Energy, AI, Sensors [s] [s]
- Loyalty Management Market is projected to grow from $11.98 billion $28.65 billion, from 2024 to 2030 [s] [s]
Smart Layer token infrastructure layer delivers utility and liquidity benefits across all these industries and use cases, which will lead to substantial demand and opportunity for Stakers and Projects.
It’s bigger than any single blockchain
Smart Layer is an infrastructure layer that will support all chains.
Value capture extends beyond the ecosystem and projects using key components incur a fee, whether they operate on NFT marketplaces like Blur or OpenSea, DEXes like Uniswap, or even off-chain.
This is an advantage compared to chains that require value to first be bridged and locked in their closed ecosystem before they can benefit. The way Smart Layer is designed removes this limitation.
Smart Layer is an entire ecosystem and $SLN is not just another gas token, but rather a key player in a comprehensive value-creation framework.
How the system works: Examples
All values are for example ONLY and subject to change.
Staking
Why should someone stake $SLN?
- Earn emission rewards (e.g. 5% to 15% per year)
- Earn network fees (e.g. 1% to 5% per year)
- Receive discounts on usage fees (e.g. 10%, 5% or 0%)
- Discount on sales prices (e.g. $10 buy in for a project when staking 75 $SLN, or $12)
- To be eligible for Launchpad projects, where staked funds are used to buy Smart Tokens at launch.
Fees are generated from the Network, the use of the tooling, or deployed projects.
Using example numbers:
- Your stake earns 11% yield — 9% from inflationary emissions rewards and 2% in network fees as $SLN
- If you stake 1000 $SLN, you will have 1090 $SLN by the end of the year, plus around 20 $SLN variable to the additional fees
Stake-To-Earn
Besides being able to participate in early Launchpad projects, Stakers can earn airdrops, digital and physical benefits from new projects.
Using example numbers:
- You stake 75 $SLN and get the option for early project access
- You stake 125 $SLN and are now eligible to get early access and direct token airdrops
- You stake 175 $SLN and can now get early access, airdrops and real world rewards
For Payments
Projects can use $SLN as payment, and the Smart Layer Ecosystem can capture a percentage of every payment for buybacks and distribution to stakers. Using fictional numbers, here’s an example:
- A user pays $100 in $SLN for an in-game asset
- 3% of this amount is collected and distributed back to Stakers, adding to the overall yield
$SLN can be used to pay for using Tools or the Network. It can also be used for buying tokens on Smart Layer Launchpad or in Marketplace transactions to buy, sell and hire.
For Gas
All the transaction fees paid across Tools, Launchpad and the Network are collected in $SLN, similar to how Ether is used for gas. Using fictional numbers, here’s an example:
- A user claims an on-chain Branded Smart Pass
- The user pays 0.003 $SLN to mint this Pass which gets redistributed to you as a Staker
- The Project who issued the Smart Pass pays a $SLN fee to mint this pass — also redistributed to Stakers
Buyback or Burn Mechanism
Under consideration is for a percentage of all Ecosystem fees to be used in a buyback and/or burn program.
$SLN tokens would be bought back from the open market and kept or burned, removing them from circulation, lowering circulating supply and placing upward pressure on the $SLN price.
