Loom Network Update Q2 2022
Exciting stuff has been happening at Loom Network lately!
Cryptozombies Live
As previously announced, in addition to increasing the range of topics covered by the Cryptozombies curriculum, we’re expanding Cryptozombies to cater to different learning styles by adding instructor-led interactive coding sessions. The live events are hosted on the Happen Space Event platform and provide a more dynamic and engaging learning experience, while also giving aspiring blockchain developers ample opportunities to network with other like-minded individuals.
Over the last four years we have taught over 500,000 people the basics of blockchain development through the Cryptozombies courses. Every day new developers discover this fantastic resource, and at this point you’d be hard-pressed to find an experienced blockchain developer who hasn’t heard of Cryptozombies! It’s a very strong brand, and we’re planning on leveraging it to a much greater extent to promote our Metaverse platform.
Metaverse Platform
We’re building an open Metaverse platform, backed by public blockchains like Ethereum, and of course our own production network Basechain. Our Metaverse platform allows developers to easily integrate blockchain-backed digital assets, virtual items, and extensive NFT-based privilege systems into their Metaverse experiences.
Happen Space will be the first company to go live on our Metaverse platform, starting with the integration of blockchain-backed virtual items into their Online and Hybrid Event platform. We have a great working relationship with the Happen team, and with their feedback we’ll refine our platform APIs and SDKs to make it easier to rapidly on-board new projects onto our platform.
Tokenomics
Basechain has been running for four years now, it’s one of the longest-running Distributed Proof of Stake blockchains in the world. In a DPoS chain validators play a critical role in ensuring the security, stability, and performance of the chain. A reliable blockchain requires a solid set of validators, and the Basechain validators have done a fantastic job, thanks to their efforts Basechain has been running incident-free for the last two years. We know that running a validator requires some serious technical expertise, and investment, so blockchains must compete for validators by providing incentives that make it worthwhile to validate blocks.
Initially, we allocated 30% of the LOOM ERC20 token supply towards block rewards, development, and marketing. The block rewards were to be paid out to validators over a four-year period. Now, four years later, the Basechain block rewards pool is running low, and needs to be replenished to keep Basechain operating over the next three years. Similarly to other chains like Cosmos, Kusama, and Solana, the block rewards pool will be topped up by inflation of the token supply. On May 16, 2022 Loom Network will mint 300,000,000 new LOOM tokens, the total supply of LOOM will therefore increase from 1 billion to 1.3 billion tokens on that date. The 300M new tokens won’t all enter circulation right away, instead the circulating supply will increase gradually over the next three years as block rewards are paid out.
Update (Dec 15, 2022): CoinMarketCap currently shows the circulating supply at 1,300,000,000 tokens, this is technically correct because the tokens are not time-locked in the Treasury by a smart contract. However, the effective circulating supply will increase gradually over the next 3 years as the 300M tokens are transferred out of the Treasury in accordance with the schedules found below.
The 300M LOOM will be allocated as follows:
We’ll go into more detail about how the tokens will be allocated and how they’ll affect the circulating supply in the following sections.
In the Basechain DPoS network block rewards are paid out to validators as an incentive for validating blocks, but token holders who don’t want to run a validator of their own can still contribute towards the security of the chain by delegating their LOOM tokens to one of the Basechain validators. In exchange for delegating their LOOM tokens to a validator, a delegator earns a portion of the block rewards that are paid out to the validator. With the replenishment of the block rewards pool Basechain delegators can continue to enjoy 5–20% yields (excluding validator fees) on their staked LOOM well into 2024.
Block Rewards Payout Schedule
Block rewards are paid out every election cycle (30 minutes) and distributed to validators that have validated blocks during that cycle in proportion to the amount of LOOM tokens that have been staked to each validator. The maximum number of LOOM tokens that will be paid out as block rewards each year is shown below:
The actual number of tokens that will be paid out in block rewards will depend on how many tokens are staked on Basechain, and the length of time those tokens are locked up for. It’s possible that in some years the total block rewards will amount to less than the maximum number of tokens eligible for release that year.
Staking Yield
DPoS networks are more secure when more value is at stake, so the Basechain DPoS smart contract was built to incentivize long term staking by offering competitive yields that scale up with longer lockup periods.
The amount of block rewards validators earn is calculated based on two factors, (1) the number of tokens staked, and (2) how long those tokens are locked up for. Longer lockup periods earn validators and delegators a higher yield, as shown below:
The base rate of 5% may be dynamically adjusted by the DPoS smart contract if the total estimated block rewards at any time are projected to exceed the maximum amount scheduled for release that particular year. This ensures that all stakeholders are fairly compensated without exceeding yearly token release limits. You can always find the current effective base rate on the Basechain Staking and Validator Dashboard.
NOTE: The table above shows yields prior to any validator fees being deducted. Since validators will usually deduct a fee from any rewards paid out to delegators, it’s important for prospective delegators to factor in the validator fee when choosing which validator to delegate LOOM tokens to.
Validator Fees
Basechain validators may choose to share a portion of the block rewards they earn on the tokens delegated to them, and most do! Each validator can set the commission they charge on rewards earned for tokens staked by a delegator, this is the validator’s fee, and can be set anywhere between 10–100%.
For example, if a delegator decides to stake their tokens for 6 months they can expect to earn rewards at 10% per year before taking out the validator fee. However, if they delegate to a validator with a 20% fee, they will see an effective rewards rate of 8% per year.
Even though delegators stake their tokens with a validator, the validator is unable to transfer or withdraw those tokens, the staked tokens are secured within the DPoS smart contract and can only be accessed by the delegators that staked them.
Development & Operations
We have one of the fastest chains and we’re actively building out our Metaverse platform to foster an inclusive Metaverse that anyone can participate in. We’ve partnered up with Chainlink and Happen to expand the breadth and accessibility of our Cryptozombies courses, and we’re in discussions with several prominent blockchain companies about growing the Cryptozombies curriculum further.
There’s going to be a whole new generation of developers that are familiar with our platform, and we are actively looking to hire more developers to help us build core features of the blockchain-powered Metaverse.
Like any business, Loom Network, the company, has a few recurring expenses:
- Payroll for developers, tech writers, sysadmins, and admin staff
- Office space lease
- Server operating costs
- Events, promotions, and partnerships
To date these expenses have been partly paid for from the initial token allocation four years ago. However, as we expand our product offerings our expenses will increase. To help balance the books over the next three-year period we’ve allocated a total of 59,680,000 new LOOM tokens to the company budget. These tokens will be released over the next three years as follows:
Staking LOOM BEP20
LOOM BEP20 now makes up a significant portion of all staked LOOM, and with good reason, LOOM BEP20 can be deposited and withdrawn from Basechain at a fraction of the cost you’d usually incur with the LOOM ERC20 tokens on Ethereum. Having a multi-chain LOOM token is very convenient for token holders, but the ability to transfer LOOM between Ethereum and Binance Smart Chain through the Basechain Transfer Gateway requires sufficient LOOM reserves on both Ethereum and Binance Smart Chain. As LOOM holders deposit their tokens from one chain and withdraw them on another the Transfer Gateway reserves can become imbalanced.
To ensure that the Basechain Transfer Gateway continues to have sufficient liquidity to process withdrawals on both Ethereum and Binance Smart Chain over the next few years we’ve allocated 50M new LOOM tokens to the Transfer Gateway reserves. These tokens won’t enter the circulating supply, they will only be used to rebalance the Transfer Gateway reserves between Ethereum, Binance Smart Chain, and any other chains that may support the LOOM token in the future.
Wrapping Up
The upcoming changes to the LOOM tokenomics will help ensure the security, stability, and performance of the Basechain network — a key component of the Metaverse platform scheduled to launch later this year. Token holders can continue to take advantage of competitive staking yields while helping secure the Basechain DPoS network.
We have big plans for growing Cryptozombies and leveraging the brand to onboard new developers and projects onto our Metaverse platform. Our partnership with Happen Space has already proven itself to be beneficial to both parties — helping our teams to identify issues and refine core features in our respective platforms.
The first Cryptozombies Live event was held a couple of days ago (on April 30, 2022), and we’ll soon publish a separate update about how that went :)
Last but not least, we’re actively pursuing new partnerships, so if you represent a project that’s looking for new opportunities to collaborate please reach out to us at hello@loomx.io
Loom Network is building a Metaverse platform backed by an ecosystem of public blockchains to allow developers to create unique Metaverse experiences with blockchain-backed digital assets, virtual items and NFT-based privilege systems. A key part of this platform is our Basechain network — already live in production, audited, and battle-tested.
New to Loom? Start here.
Want to stake your LOOM tokens so you can earn rewards while helping secure Basechain? Find out how. You can also save a bunch in transactions fees by staking LOOM from Binance Smart Chain, more on that here.
Got experience running Linux servers, and interested in running a Basechain validator node? Reach out to us in our Telegram channel and we’ll tell you all about the current requirements.
Would you like to join us in building the core infrastructure of the blockchain-powered Metaverse? We’re always on the lookout for good Golang, Solidity, and Javascript/Typescript developers, so please email us at hiring@loomx.io if you’re interested.
