IOV Name Service upgrade — Economic Review
On August 26th, 2020, we upgraded the IOV Name Service to its new version on Cosmos SDK. This version offers a more complete IOV Name Service, offering open and closed starnames in addition to the *iov names available until then.
It implements also a more complete reward distribution. The transactions fees and the turnover of the IOV Name Service are now redistributed in a fully decentralised way to the IOV Token holders. The current design implements the Staking module from Cosmos SDK, which has already been battle-tested on Cosmos SDK chains for over a year now.
The Name Service Economy
IOV is launching a fully decentralised name service, with a decentralised Name Service Economy. The guiding principles have been explained early in the project in the previous blog post series.
Reward Distribution — where does it go?
Since the upgrade, the IOV Name Service is implementing the Proof of Stake design designed by Cosmos. The core technical documentation is here, and the IOV documentation is here.
Practically, it means that any IOV Token holder may delegate their IOV Tokens. To delegate means to lock their tokens with a specific Validator for a certain time. During this delegation period, these tokens are at stake and qualify for reward. These tokens would also be penalised would the chosen Validator act wrongfully, hence the need to choose the Validator carefully. You can see Validators identity and references through our explorer Big Dipper https://big-dipper.iov-mainnet-2.iov.one/validators (thank you Forbole :) )
The Delegator’s reward is proportional to the Delegator’s amount at stake vs the total IOV tokens at stake.
The long term vision of reward distribution is to weight each individual’s stake differently to reflect their contribution to the IOV Name Service, it will come in future versions. As of today, anyone can start receiving reward in line with the tokens they hold.
How to delegate and claim your Rewards
Thanks to our partner Cosmostation, you can Delegate and claim your Rewards in their mobile app. All the details are in this article.
Total Reward — where does it come from?
The total reward to be distributed is the total service fees coming from the IOV Name Service transactions plus some inflation tokens. In effect, in this version of the IOV Name Service, there is a double source of reward.
- The IOV Name Service fees: they are coming from transactions on the chain, like registering a *Starname. The price of the transactions are adjusted over time to help adoption and usage. They are intended to be fairly stable vs fiat and adjusted for IOV token price moves. At launch they are:
So the more transactions, the more reward. All the tokens paid to register, transfer or update a name are transferred to the reward pool and eventually distributed to the Delegators. This is implementing the economic cycle described in the previous articles.
- Inflation: This is a new feature in this version of the IOV Name Service. New tokens are minted at every block in line with the inflation rate and distributed as a reward. The inflation rate can be observed on our Big Dipper explorer (thank you again Forbole)
The exact inflation formulas are presented in this Cosmos SDK documentation. In practice, IOV’s annual inflation rate started at 12% on August 26th, and is increasing up to a maximum of 25% until there are 80% of IOV Tokens delegated to the network. The increase slows down linearly as we get closer to the 80% target, with a max speed of 13% inflation point per year when there are 0% delegated tokens and 0% at 80%. The inflation tokens are the total amount of tokens (120.72m initially) multiplied by the inflation rate per block. They are sent to the reward pool and eventually distributed to the Delegators.
Conclusion
With this release, the IOV Name Service brings the IOV token to life with a fully functioning economic cycle. The long term success of the service will come from the increasing number of name transactions, which is the real value brought into the IOV Name Service from outside and accumulating in the value of the IOV token. Inflationary reward clearly incentivises all token holders to stake their tokens until the reward from Starname transactions become strong enough.
We will keep working on making the Starname easily accessible and usable for everyone, get yours now while it is still available!
Thank you! 🤗
IOV is very grateful for the awesome help from all its partners and Validators and would not have accomplished this milestone without them! In particular, special thanks to:
- Cosmostation who is also an IOV Validator and who is providing a state of the art staking wallet integrating the Starname resolver; and
- Forbole who is an IOV Validator, who provided our block explorer Big Dipper and launching soon the Desmos project, where the Starname will integrate;
Thank you as well obviously to Cosmos for having created an awesome and fully functioning SDK and a great collaborative ecosystem!
