TL;DR
- v1 XOR holders will have their tokens converted into VAL such that the total amount held will constitute approximately 1/3 of the VAL supply (VAL tokens were formerly called STK in some documents)
- ERC-20 XOR will simply become XOR, without any changes
- ERC-20 XOR holders will be given approximately 1/3 of the VAL supply, after the SORA v2 network launch, via an airdrop and in exchange for performing certain actions
- The SORA Parliament will be given approximately 1/3 of the VAL supply after the SORA v2 network launch and after the Parliament is operational; the Parliament will vote on how to allocate these funds
- After the SORA v2 network launch XOR will become a token with supply elastically managed by a token bonding curve smart contract
- Voting for this referendum will take place in the SORA mobile app, between September 23–27, 2020 23:59 UTC
Background
On October 17, 2019, the SORA v1 network was launched, issuing approximately 1,618,033,988 XOR. In March of 2020, approximately 350,000 XOR were moved from the SORA v1 network to the Ethereum network and trading was started on Uniswap. The goal of the initial launch on Uniswap was to perform preliminary price discovery and build the SORA community by incorporating users of the Ethereum network. However, our technology has improved, giving us the possibility to shape a new and more ambitious type of crypto ecosystem. Whereas our medium-term goal remains generating value for our community, our analysis of the SORA economy has led us to embrace the long-term goal of realizing a supranational world economic system.
To realize this system, we proposed SORA: The New Economic Order and the VAL validator reward token, as a bold and profound upgrade to the SORA network and SORA tokenomics. Because the SORA New Economic Order tokenomics upgrade is sweeping in its consequences, only via community referendum can such changes be made.
This article explains the referendum process in more detail. The referendum will take place between September 23–27, 2020 23:59 UTC.
SORAnomics: A Summary
The proposed tokenomics update for the SORA New Economic Order has two broad parts:
- introducing the VAL token and converting v1 XOR to VAL, then giving VAL to ERC-20 XOR holders and the SORA Parliament
- modifying the model for the v2 XOR token so that supply is managed by a token bonding curve, backed by reserves
The conversion from v1 XOR to VAL is a Procrustean transform that truncates approximately 2/3 of the supply and then rescales the amounts so that it will fit into approximately 33,900,000 VAL tokens (specific number may change slightly). Tokens held by large holders will be truncated to fit within this allotment, without diluting normal holders proportionally.
The modification of the v2 XOR token model such that the supply will be elastically managed by a token bonding curve will not be finished until some time in 2021, as the model must be developed on the SORA v2 network and deployed along with Polkaswap.
The next steps, assuming the referendum is ratified, would be as follows:
- Distributing 1/3 of the VAL supply to v1 XOR holders and removing v1 XOR
- Creating a bridge from the SORA v1 mainnet to Ethereum for VAL
- At the SORA v2 network mainnet launch, VAL will be distributed to ERC-20 XOR token holders and then the SORA Parliament
- All ERC-20 XOR becomes v2 XOR automatically. This initial supply will be capped at 350,000 XOR.
- All ERC-20 XOR token holders will be airdropped VAL at the SORA v2 network mainnet launch, proportionally for each XOR they hold at a snapshot event (will be defined later, but most likely the instant of v2 launch)
- It is not yet decided how much the VAL airdrop to ERC-20 XOR holders will be. The rationale for the airdrop is that the initial price of the SORA token bonding curve will be set at less than the market price at the time of launch, so the VAL airdrop is to compensate for this expected loss.
VAL DAOs and liquidity voting won’t be ready at the launch of the SORA v2 mainnet. Instead, liquidity will automatically be provided to XOR-KSM and XOR-DOT pairs and PSWAP rewards will be sent out based on this, when this feature will be ready. It is understand that there will likely be a release of Polkaswap that is a preview release that is not fully featured with respect to the tokenomics.
Our previous article SORA VALidator Rewards describes the v2 economic system design and dynamics, and includes a mapping of its causal loops based upon simulations conducting using the BPTK-Py library.
Ratifying the New Economic Order
Starting on September 23 and continuing until September 27, 2020 23:59 UTC, the community will be asked to vote on the SORA New Economic Order tokenomics referendum using the SORA mobile app.
If the referendum does not pass, then that indicates a rejection of the current SORA tokenomics proposal. This means that for the time being, the VAL token will not be released and XOR will not be managed by a token bonding curve. Additionally, v1 XOR and v2 XOR will also not be separate tokens any longer, and will be understood as the same token: XOR.
For the sake of clarity, here is a list of anticipated pros and cons for the referendum passing and failing.
If the referendum passes:
Pros:
- XOR will have a state-of-the-art tokenomic model with supply managed elastically
- There will be a new token, VAL, which can incentivize validators to secure the network
- v1 XOR holders and XOR ERC-20 token holders will get a VAL airdrop
- Community will likely be positive about the future of the SORA project, as the v2 tokenomics have been highly anticipated
- The SORA ecosystem will likely remain very positive and overall the value will be increased for both v1 XOR and v2 XOR holders
- XOR will become a token with predictable price dynamics and VAL will be a volatile token, thus promoting token diversity in the ecosystem to meet different economic needs
Cons:
- This is a major restructuring of the tokenomics and requires v1 XOR holders to make some sacrifices for the good of the network
If the referendum fails:
Pros:
- v1 XOR holders will get XOR tokens
Cons:
- v1 XOR holders will lose a lot of value as the community is fractured and declines
- There is no VAL token to reward validators to secure the network. Instead this should be done through XOR inflation
- XOR will not be predictable in price dynamics and will become less useful because of this
- The community will likely be negative about the future of the SORA project, as the v2 tokenomics have been highly anticipated
Referendum Text
We, the SORA community, are united in thought and mind to collaborate together to establish the new tokenomics of the SORA ecosystem. The following articles represent the key points in our community-driven proposal to enhance the SORA economy, and by voting YES on this referendum, we together as a community officially accept the realization of the contents of the following articles. However, we as a community may also reject the articles and maintain the current economic model by voting NO on this referendum.
May the will of the majority come to pass.
Referendum Articles
Article 1. SORA v1 mainnet XOR shall be reduced and rescaled to become 33,900,000 units. These units will then be converted into 33,900,000 VAL tokens. After conversion, the bridge from SORA v1 mainnet to Ethereum shall be opened and ERC-20 VAL shall be operational.
Article 2. 33,100,000 VAL shall be given XOR holders to incentivize the common good, such as burning XOR, with a portion of this amount airdropped. This transfer should happen when the SORA v2 network fully launches and shall take place on the SORA v2 network.
Article 3. 33,000,000 VAL shall be given to the SORA Parliament, some time after SORA v2 network launch and after the SORA Parliament is operational. The use of these VAL shall be in accordance with the rules of the SORA Parliament.
Article 4. After the SORA v2 network launch and the Polkaswap dApp, the XOR token shall be managed in supply by a token bonding curve.
Article 5. Until the SORA v2 network launch and the introduction of the token bonding curve, the supply of XOR shall be capped at 350,000 or less.
Article 6. Projects that have been voted on up until now shall not get any distribution of tokens until after the SORA Parliament is established, and only then, after the full review and consent of the Parliament.
Article 7. All executable deliverables (software, smart contracts, etc.) shall be released in a disabled form and enabled by community vote. In this way, the specific variables and details of the XOR and VAL tokens will be available for public inspection and decision, so they are not specified in this referendum.
