Conflux Economic Model — Ecosystem Development Incentives and Governance
Introducing the ecosystem development incentives and governance model.
In previous articles, we introduced the distribution logic and rules for a miner’s income on Conflux Network: block rewards, transaction fees and rewards for storage and maintaining the network. As the maintainer of the whole system, miners receive reasonable rewards to promote the stable running of the system. In this article, we will introduce the ecosystem development incentives and governance model.
The issued tokens exist in two forms: liquid and illiquid. In the liquid form, they can be immediately transferred/used on Conflux Network. There are three ways in which tokens can be locked up — making them illiquid. Illiquid tokens cannot be transferred! Locking can take three different forms:
- Tokens can be staked to earn interest (staking)
- They can be utilized as collateral for storage space on the network (e.g., for running dApps)
- Tokens can be locked up for a predetermined amount of time in exchange for voting rights in the network governance
Ecosystem Building Incentive Model
All tokens on the network can earn interest at an annual rate of 4%.
For illiquid tokens, the interest will be distributed to users according to the locking methods:
- Users who earn interest through staking will get the interest automatically when unstaking the tokens
- Tokens deposited as a collateral for network storage will receive interest on the collateral that was deposited for storage space
- Users who lock their tokens in exchange for voting rights will get interest on the locked tokens
For liquid tokens, the interest flows into the Conflux Public Fund.
The public fund is set to provide sustainable incentives for the development of the Conflux ecosystem. After the initial Ecosystem Fund and the Community Fund run out, there will be few incentives for community members and projects to continue ecosystem building. The Conflux Public Fund will be taken over by Conflux DAO governance when the DAO is established.
Ecosystem Governance Model — CFX Voting
All funds that are used to develop the ecosystem will be ultimately governed by the DAO. All Conflux ecosystem participants can obtain voting rights by locking up their tokens for a certain period of time. The voting rights will be awarded as such:
number of quarters × number of tokens × 0.25
For instance:
- Locking maturity less than a quarter: No voting rights
- Locking maturity more than a quarter: One CFX has 0.25 vote
- Locking maturity more than half a year: One CFX has 0.5 vote
- Locking maturity more than a year: One CFX has 1 vote
While tokens are locked to obtain votes, users retain the right to staking interest. They cannot withdraw the tokens or decrease the locking duration once tokens are locked up.
CFX voting website: https://governance.confluxnetwork.org/
Tutorial for CFX voting: Conflux CFX Voting Tutorial
CFX votes of an option are the sum of the votes for the option.
Ecosystem Governance Model — FC Voting
FC holders have the same voting rights for Conflux governance as CFX holders, but they do not need to lock up FCs to receive voting rights. FC holders obtain voting rights as long as they hold FCs.
FC voting website: https://stampers.app/#/FansCoin
FC votes of an option = Balance of CFX that can generate yield× Percentage of a voting option’s result
Ecosystem Governance Model — Voting Totals
The votes of an option will be a total of CFX votes of the option + FC votes of the option
Get Connected
Web: https://confluxnetwork.org/
Twitter: https://twitter.com/Conflux_Network
Discord: https://discord.com/invite/aCZkf2C
Telegram: https://t.me/Conflux_English
About Conflux Network
The only state-endorsed public, permissionless blockchain project in China, Conflux Network is an open-source, layer-1 blockchain protocol delivering heightened scalability, security, and extensibility for the next generation of open commerce, decentralized applications, financial services, and Web 3.0. Conflux Network is overseen by a global team of world-class engineers and innovative computer scientists, led by Turing Award recipient Dr. Andrew Yao. Fostering entrepreneurship and innovation, Conflux elevates startups and organizations across industries and continents to generate decentralized marketplaces and digital assets for meaningful business and social impact. Founded in 2018, Conflux has raised $35 million in capital from prominent investors including Sequoia China, Metastable, Baidu Ventures, F2Pool, Huobi, IMO Ventures, and the Shanghai Municipal Science and Technology Commission.
