May 26, 2020
Conflux Network’s Economic Model: Pre-Mined Token Distribution and Proportions
Part 2: An in-depth look at the distribution details of pre-mined tokens.
At Conflux Network, our goal is to build a self-adapting economic model to reduce the discord among community coordination, tokens circulation, and contract incentive. We aim to effectively encourage the various roles within the ecosystem and to properly distribute the limited computing and on-chain storage resources. A loop of positive feedback will be formed among the three parts, shaping a fast-self-rotating coordination circle, as seen in the figure below:
The Incentive Model of Conflux Economic Model
Participants in the Conflux Network ecosystem include three groups:
1) Direct builders: Conflux Foundation and the founding team responsible for developing the underlying technology of the Conflux public chain and the Conflux Network operations;
2) System maintainers: Miners maintaining the normal operation and security of the whole Conflux Network system;
3) Ecosystem contributors: Community Users who continuously generate value for the Conflux Network ecosystem.
From the perspective of the above-mentioned participants, Conflux Network will choose different incentive patterns during different development phases to ensure a stable shift from the initial phase to the operational phase.
Initial phase: the direct builders and the ecosystem contributors are incentivized to resolve the cold start problem of the system;
Operational phase: system maintainers are incentivized to promote continuous system upgrading; self-adaptive configuration of Conflux system resources is promoted through the marketization of system resources.
In part 1 of our economic model series, we published that the amount of pre-mined tokens in the genesis block of Conflux Network is 5 billion CFX. The pre-mined tokens will be offered as rewards to the direct builders and the ecosystem contributors of Conflux Network.
Direct builders are rewarded to constantly improve the ecosystem and to lay a solid foundation for the entire Conflux ecosystem.
Private Equity Funders: 16% of the genesis tokens will be allocated to our private round investors and will be released over two years.
Genesis Team: 36% of the genesis tokens will be awarded to the founding team including the IIIS team (of Tsinghua University), Conflux Foundation employees, and advisors. The genesis team’s tokens will be released over 4 years and serve as a capital pool.
Reasonable marketing activities will be set to solve the cold start problem so that users joining the ecosystem in an early stage and early miners will get extra tokens or higher block-rewards. This will encourage them to contribute more to the ecosystem.
Community Fund: 8% of the genesis tokens will be provided as rewards for ordinary community users for the encouragement of them to participate in the early stages of developing and maintaining the Conflux ecosystem. This part of the tokens will be unlocked within four years.
Ecosystem Fund: 40% of the genesis tokens will be offered to community developers supporting the DApps in the Conflux ecosystem. This proportion of tokens will be unlocked within four years.
Public Fund: 0% of the genesis tokens will be allocated into the public fund account.
In part 3, we are going to discuss how the economic model of Conflux Network solves the problem of system resource marketization.
