This is the second blog on our series on Centrality’s token economics. Check out the previous blog here.
When the CENNZnet token economy launches, several tokens will be used in Centrality’s ecosystem. Here’s an introduction to the different types of tokens that will be made available.
Firstly, the CENNZnet token economy has been designed for both developers and users in mind. As a result, it will be cost-efficient to run applications on CENNZnet and good applications will be incentivised to grow. Those who use the network and help it grow will be rewarded. We’ve also aimed to reduce friction for onboarding for DApps and consumers. The network will be governed by people who have a stake in CENNZnet and as we have more people using the network, the more the value of CENNZ will appreciate.
CENNZnet will utilise four types of tokens: staking tokens, spending tokens, reserve tokens and user tokens.
CENNZ is the staking token
- CENNZ will enable users to participate in the network consensus
- CENNZ will be required to join CENNZnet as a validator and contribute to securing and governing the network
- Validators will receive block rewards in the form of the spending token, CentraPay
CentraPay is the spending token
- CentraPay will be used to pay transaction fees on the network
- It will also be used as the reward for validators
- The spending token is designed to be stable and predictable for users and businesses who operate on CENNZnet
- With the dual token model, CENNZnet aims to correlate the value of CENNZ with network activity, while keeping fees stable and reasonable for continue network growth
- Not every protocol or DApp requires a token to operate. In fact many tokens produced to date have no genuine utility. However, we believe some core functions in the platform do justify the need for a separate utility token.
- These tokens often provide a discrete function with its own economic needs separate to that of general-purpose computing, like Storage for SYLO or Managing permissions and identity with CERTI.
- Reserve tokens have special access to the network and APIs to allow them to perform their special function in a much more tightly coupled way.
- Anyone can propose a new reserve token function and economy and the validators can decide to include this in the networks reserve token pool
User tokens will also be available
- There will also be an opportunity for DApps to create their own economy and community through user tokens, similar to generic ERC20 tokens.
- User tokens can be created by anyone
- CENNZnet will support several standard token models for things like non fungible or asset backed tokens.
Transaction fees can be paid in any asset, provided there’s liquidity in the CENNZX spot exchange. CENNZX will then seamlessly convert the asset into CentraPay for fees. This will streamline both onboarding and in-app experience by eliminating the need for new users to learn about CENNZ or CentraPay when they use their favorite DApp.
That’s our CENNZnet tokens in a nutshell. Centrality’s token economy whitepaper will be available once our Developer Portal launches. Keep an eye out for more information on the launch of our network and how you can prepare for staking.