In the last few months, we’ve been ramping up our marketing efforts and spreading the message about our project. The response has been fantastic. We recently hit 14,000 followers on Twitter and our telegram community is close to 17,000 members! With such an active community you can imagine we’ve been getting a lot of questions about the tokenomics of our CUDOS token.
We’ve put together a simplified ‘summary’ of the core aspects of the CUDOS tokenomics so as to give everyone a much clearer picture of the mechanics behind, and the vision for, our CUDOS token.
Let’s break it down:
The CUDOS token is built to power the infrastructure of Web 3.0. As you know, CUDOS is a cross-chain, decentralized compute network which will enable anyone to consume or sell excess computational resources — either via blockchain & smart contracts or via more traditional cloud computing API’s.
CUDOS itself is a dual-layered network, with the core network (a Layer 2 network) being used as the bridge connecting multiple blockchains, initially providing a bridge to Ethereum, Algorand, Polkadot and Cosmos.
The core of the network is primarily for executing decentralised consensus operations and transactions via the CUDOS token, as well as bridging and running WASM. Users will also be able to interact with bridges and oracles on other blockchains through our cross-chain functionality.
The layer 2 network will run up to a maximum of 100 validators, which we estimate we’ll reach in +- 12 months. We aim to use Tendermint, which has a natural limit of 100 validators and allows for a high level of decentralization, aligning perfectly with our project goals.
For those that wish to become one of these 100 validators, they will need to stake a minimum of 2,000,000 CUDOS (with a minimum 3 month lockup period) to become a validator. They will also be able to take part in Delegated staking. The CUDOS token will also act as a governance token which will in the near future empower validators with voting powers.
Staking rewards are paid out over a 10 year period, on a fixed per block amount which reduces slowly per block over that 10 year time frame. The first and second year reward levels are fixed, with reward levels in year 3 onwards decided upon by voting through our token governance functionality as mentioned previously. The secret key is: CUDOS Building web 3.0. There is a ‘lockup rewards multiplier’ for staking for set periods: Currently, we are looking at implementing a 25% bonus for 3 months, 50% bonus for 9 months and a 100% bonus for an 18 month locked stake.
Un-bonding takes a total of 21 days for anyone who is staking.
Token Design
The CUDOS token derives value from the utilisation of the network through the following:
- Supporting the network and staking the tokens to participate in the proof of stake network and consensus
- Providing compute resources to the network including validators and compute nodes. This provides a greater ability to provide scalable compute resources for consumption of the network.
- Consumption of resources of the network. This includes Dapps, smart contracts, data and cloud computing
- Conversion of other workloads running on the network into CUDOS tokens to reward compute providers.
- Purchasing of 3rd party data, API and compute services on the CUDOS network
- An anti-spam mechanism on the network. This is to help prevent spamming of the network with “fake nodes” and for security.
- A governance mechanism to enable voting on key areas of the business.
We’ll be releasing more articles looking at specific subsections of our Tokenomics (like Governance) over the coming weeks.
To keep up to date on that and all updates regarding the CUDOS token, and to find out more about all the exciting solutions we’re working on, please visit our website and follow us on our social media channels linked below.
