How to make people act? KYODO Tokenomics
KYODO is the cross-platform incentive tool to build the crypto economy for DAO based on Impression revenue model.
Economy model
We BUIDL KYODO to manage Decent.Fund
KYODO is the tool for organizing DAO — decentralized community with common goals. Members accumulate commonwealth by a relevant activity performing tasks in different domains. This wealth is represented by DF token and stored in the Fund — multisig wallet of the community.
Every community that is built on KYODO can issue its tokens and give its name. Also, the set of domains is optional and can be created according to the professional interests of a community.
Decent.Fund mission is to contribute to the mass adoption of the decentralized solutions, making the concepts of the new crypto economy closer to the unchained world. According to the mission Decent.Fund focuses on the following types of activities which are divided between domains*:
- BUIDL domain (UI/UX design, Programming, Digital marketing)
- SOCIAL domain (research, articles, infographics, meetups, hackathons, social)
- FUND management domain (smart investment, crypto assets management)
- GOV domain (strategy)
The productivity of every member in a domain is being recorded during a period (e.g., one month) and evaluated with points by other members. At the end of every period earned points are converted to the corresponding share of issued DF tokens for the bounty as inflation within the network. A member receives earned DF tokens to a member’s ETH address at the end of a period.
Governance
Decent.Fund chose Axiarchy governance model that supposes that the decision making is based on merit. Only members with merit represented by NFT token* have access to the Gov domain.
One of the Gov domain’s function is to define the distribution of tokens between domains to stimulate members activity. The amount of DF tokens defines the importance of a domain in a certain period. As soon as KYODO implements Impression revenue model — the instant tipping, DF tokens members hold are converted to points at the beginning of each period. We implement tips to reduce the transaction cost that would be very high on blockchain considering a good workflow velocity. Domains’ members use points to reward completed tasks.
Also, DF token emission is regulated by the GOV domain.
DF token emission = Total supply * inflation rate
Token model
KYODO has continuous token types : DF token and DF merit.
Token model is described in terms of Token classification proposed by Untitled INC.
DF token
Purpose: Cryptocurrency. The DF token serves as payment for tasks and as the medium of exchange . The DF token is tied to the fund of the community.
DF token price = Total cap / Circulating supply
DF token also is a Network token that gives:
- Ability to set a task
- Ability to claim a task
- Ability to initiate a dispute
Underlying value: The value generated by the Decent.Fund increases the DF token value and wealth of every member in a community.
Utility: DF token is the hybrid token that has traits of both Usage and Work tokens:
- Grants access to system functionalities
- Allows owner to contribute to the system
Legal status: Utility token, closely tied to functionality. Grants owners to contribute to the system vs. passive investor role.
Tech layer: Ethereum ERC20 token.
How to obtain DF token: buy in the FUND domain or on a decentralized exchange, and earn by completing tasks in domains of Decent.Fund.
DFMerit
Purpose: Network token, not intended to be cryptocurrency, has the functionality within the system — gives access to participate in GOV domain.
Utility: Usage token — the token provides access to Gov domain
Underlying value: doesn’t have a monetary value.
Legal status: Utility token
How to obtain a merit: apply to the GOV domain. Consensus on voting will be reached by majority voting “yes”.
Tech layer — Ethereum ERC721 (NFT) token
Incentives
Incentives involve both monetary and non-monetary rewards and punishments, including the pay-for-performance reward systems (Impression revenue model) and Inflation:
- Impression revenue model — DF tokens received for appreciated contribution to the community;
- Holder value —DF token value increases throughout time due to increase of assets holding by the fund;
- Inactivity punishment — Passive members’ share is decreasing due to inflation.
Inflation
As a negative incentive, KYODO uses inflation mechanism to stimulate members activity. The personal asset of an inactive member is affected by inflation up to 5% in a period. The Inflation is dynamic and depends on fund revenue. KYODO doesn’t apply the inflation if there is no activity shown and doesn’t have an income, for example. Also, we are researching a proper solution in the case if any significant income dilutes members share and increases the inflation for inactive members. We are not interested in bankrupting our members.
FUND management
The FUND domain members specialize in smart investment searching for projects that make mass adoption closer and bring more value to the ecosystem for the ecosystem of the decentralized world. Decent.fund invests on the early stage in such projects and holds an index fund for tradable ones.
All the fund’s holdings are transparent; members can see the changes of the portfolio on KYODO Fund stats page.
As soon as DF token is tied to the community fund, we are planning to integrate Set protocol to manage the Decent.Fund portfolio automatically. It means that the FUND domain’s members vote for a share of the fund they want to have in certain tokens then the Set protocol rebalances token automatically at the right time for the good price.
Opened issue
The question is how to implement the inflation to reward the active members for demanded contribution and motivate passive members to do minimum efforts to support the system and not to lose his stake because of long-lived inflation. Please, share your thoughts and leave a comment under this article. 🙏🏿
Credits
coauthor Igor Line
cover picture by Alina Loseva
edited by Masha Pipenko
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