The Economy of the SYGON Token
Actors, responsibilities, mechanisms and value creation flows.
In this article I present the economy of the SYGON token that was introduced here and defined here.
The SYGON token has a fixed maximum supply of 7500000000 tokens that can be ever released. This supply will be gradually released to support the development of the SYGON technology and its products.
Token release
The release of SYGON tokens is performed by a Creator directly to contributors that build the technology, through development projects. Any such project is rewarded through one or more token releases.
Each token release is performed according to a predefined Release Structure. This ensures that the released amount of tokens is distributed simultaneously at the moment of the transfer to a few different release destinations.
There are five release destinations:
- Development (DEV)
- Promotion (PRO)
- Operational (OPR)
- Other two destinations that are reserved for future use (generically named RD3 and RD4).
The amount transferred to the DEV destination represents a direct reward for contributing in a development project.
The PRO destination is owned by the operating entity and it constitutes a budget used for financing the communication and promotion activities of any form, related to the developed products/ services.
The OPR destination is meant to be used by the operating entity to make the product/ service available on the market.
The amounts allocated to the PRO and OPR destinations are conceived to support the specific processes for a limited time-frame and the objective of the involved contributors is to make the respective product/ service economically viable. Rewarding for themselves.
Currently the token release follows the structure: 20% DEV, 30% PRO, 50% OPR, 0% RD3 and 0% RD4. This can be adjusted at any time in the future based on several factors like: opinions of contributors, market prices, operational costs etc.
Every project that is financed with a SYGON token release will be publicly described and with its status permanently updated and publicly available.
With this approach, the SYGON tokens flow to the contributors as a reward for their work and they further put tokens on the market through exchange mechanisms.
Monetization
The end users access the knowledge services and products created with the SYGON technology by paying with SYGON tokens. Payments are performed through aliases. This is a mechanism that collects all amounts paid by end users in a common account, called Alias Target.
All collected amounts are periodically distributed strictly to the contributors of the corresponding products. The mechanism is completely transparent and all builder contributors are guaranteed that the realized monetization of their contributions is distributed among them, only.
The builder contributors develop software components that are further integrated within the technology or its products. Some quick examples are data builders, reward applications, the KPN, the platform itself etc.
In the early development phases the operating entity is responsible for pricing the products. But for later milestones of the technology development, the objective is to allow contributors to directly participate in the pricing process and find the best market fit.
Distribution of revenues
The distribution of revenues will be performed automatically by the Alias Target Manager role. For example, revenues generated by a product will be distributed to the contributors of the applications that built the respective product. The distribution is calculated based on 1) an allocation scheme and 2) the amount spent by end users in order to access the knowledge produced by the respective product.
The allocation scheme defines the fraction of revenue as weight from total generated by a product that is received by a distinct software component that participates with computations within the respective product in any sense.
The distribution of revenues is performed through splitters. The splitter is a mechanism that forwards any amount transferred to it, to a few other destinations. Destinations in a splitter are accounts of the contributors.
So for distributing the revenues, the operating entity defines one or more splitters for a product. Further, the realized revenue amount is transferred to its splitters and finally the amounts reach the contributors’ accounts.
The example in the figure above is merely an abstraction of a complete flow of payment with SYGON tokens, spending SYGON credits and the revenue distribution performed by the Alias Target Manger through a splitter to two contributors.
For simplicity, this example does not represent the fees. However, in the real implementation, the amounts transferred will be reduced with the related fees.
Credits are an internal mechanism used by the SYGON technology and products as a fixed reference value for measuring and accounting purposes.
A notable aspect here is that the operating entity participates to revenue distribution as merely a contributor in splitters, receiving revenues simultaneously with other contributors, without having any preferential treatment.
The Alias Target Manager is played by a software component that owns the Alias Target and has access to the ledger containing spend records.
Token burn
Any user can burn SYGON tokens from own balance. The total quantity of token that can ever be burned is limited to the Total Maximum Burnable Quantity.
Also, the restrictions exist that:
- the Creator can not burn tokens from the total initial supply and
- the generated revenues can not be burned (but only distributed to contributors).
Fees
Fees are applied to SYGON token transfers. The fees are collected to an account from where a software mechanism that is configured in a decentralized manner by sygons distributes the amount to two destinations:
- burn and
- the operating entity.
The Fee Manager is a role responsible with managing the fee settings and distributing the collected fees. The settings are weights from the total amount of fees, corresponding to the burn and the operating entity destinations respectively.
The Fee Manager role is played by a software, as a decentralized mechanism that allows all sygons to decide over the fee settings, by voting. The voting power is defined by algorithmic meritocracy.
Until the entire supply of token is released, 100% of the collected fees are burned. After the entire supply is released, periodically, a fraction from the collected total will be burned and the rest will be transferred to the operating entity.
So the contributors have a high degree of transparency and control over the distribution of the realized revenues and the collected fees.
Thank you for reading this article!
You can find more details on the technical implementation of the SYGON token.
