Tokenomics V2: Unlocking our Power

Rationale for Revision

The original Cirus Token model assumed only one source of ecosystem revenues driving remittance to users: Data Sales. As the entire system was fleshed out and further conceptualized over the last year and a half, multiple additional revenue sources were developed and implemented throughout the product. i.e., The product and plan were improved and matured.

The following question then arose: What do we do with the additional (non-core) revenues? It didn’t seem quite right to integrate that revenue into the existing model, as it didn’t really fit. As a team that embraces the Web3 philosophy, it also didn’t seem right to keep 100% of the extra revenue.

Combine that question with some of the challenges experienced with the current model and it became clear that we had both the need and the opportunity to re-assess the token model.

Ultimately, we settled on the changes below, as they provide a good mix of long-term sustainability, while retaining value for existing ecosystem participants.

The structure of the Cirus Token will be modified to match the planned end-state of the Cirus Network — a (mostly) user-operated hybrid data/blockchain system. Further details on that plan will be provided at a later date.

As we build toward that end-state, the ERC-20 Cirus Token will fulfil the needs of the Ecosystem through each phase as the network grows. The functions of the ERC-20 token will match those of the native Cirus Network token, once implemented.

This will eventually (in the long term) enable a 1-for-1 swap from the ERC-20 token to the network-native token once the network is live and stabilized.

In the interim, the following changes will be made to the structure of the ERC-20 Cirus Token:

• Reduction of Total Supply.
• Re-allocation of remaining supply to fit the new model.
• Change Data Rewards structure to a Remit-Buy-Burn model.
• Transition to a deflationary model.

1) Reduction of Total Supply

This will be done by burning tokens from the Ecosystem Development Fund, as these tokens will not be required going forward. Current circulating tokens (held by users) will not be affected.

The burn will be performed in multiple stages, over the course of a few months, and will have already been initiated by the time this document is released. Target for the total amount to be burned is 50 to 100 million Cirus, with the exact amount subject to several factors as product and network growth continue.

2) Re-allocation of the remaining token supply:

Example of new token allocation, assuming maximum token burn (100 million):

The new allocations will be established by consolidating existing treasury, and re-designating Cirus Foundation Wallets. Updates will be made on the various token-tracking websites (CMC, Coingecko etc.*) to keep track of the new treasury wallets, as well as updated Total Supply following token burns.

*Note: In the interim, Total Supply and Circulating Supply numbers will likely be inaccurate on these services.

The new allocations are as follows (from the table above):

• Data Rewards — for Cirus Wallet users — discussed below.
• Team Allocation — for vested tokens as well as allocations for future team members.
• Treasury — for Exchange liquidity, Pools, DEXs, staking etc.
• Future Node Rewards — discussed below.
• Partnerships & Grants — for future partners / contributors to the Cirus Ecosystem.

3) Change Data Reward structure to a Remit, Buy, Burn model

The fixed allocation (pool) of Data Rewards in the table above represents a change to a purer Web3 model, where users are “mining” tokens by sharing their data.

This is a change from a Buy-and-Remit model to a Remit-Buy-Burn model.

This model views each Cirus Wallet Holder (miner) as an integral part of a big data network from which real-world value is derived, and into which that value is reinserted.

Data Reward Tokens will be awarded daily with fixed total outflows every day/month/year. The total outflows will be reduced by 4.5% every three months (90 days), making the token more difficult to “mine” over time, and introducing a component of scarcity over time.

The total possible outflows of baseline reward tokens with this model will be 10,000,000 CIRUS, assuming a starting monthly outflow of 150,000 CIRUS (See chart below).

Each user’s share of the daily reward will be based on a number of factors, tied to the Four V’s of big data (Volume, Variety, Veracity and Velocity), essentially mirroring the real-world utility, or value, of the data being shared.

This logic is already somewhat reflected in the “Cirus Score” and “Earning Level” system, currently in place within the Cirus Wallet, and therefore will require minimal adjustments to be implemented. Over time, the algorithm will be further tweaked as more features are added to the product and the system is fine-tuned.

External Value will still enter the Token Ecosystem from real world revenues, where 50% of Cirus Revenues will be allocated to purchase and burn the Cirus Token from the open market.

This Buy & Burn process will continue until the Total Supply of the Cirus Token is reduced to approximately 100,000,000. At that time, a Community / Governance vote will take place. This backstop is a simple mechanism to check-in on the progress of the ecosystem, assess its performance, and decide on a go-forward strategy for how the revenues will continue to enter the ecosystem.

For Example:

Option 1: Buy & Burn to continue until Total Supply is a lower number e.g. 90,000,000

Option 2: Stop Buy & Burn at 100,000,000. Divert revenues to:

• Data Rewards (buy & remit)
• Real-revenue staking pool
• Nodes etc.

Alternatively, this assessment/decision may take place sooner if the need dictates. More on Governance later…

Allocations, Remittance, Reserve & Bonuses:

Data Reward tokens for users will still be remitted using the existing method (via the Cirus Wallet), and no major changes to the product are needed to facilitate this update.

The Data-reward allocation includes an incentive structure, whereby users are incentivized to hold their data-reward tokens in order to earn (up to) a 50% Bonus* (Boost) on their daily earnings. E.g.:

• Hold your Data Reward Tokens for 1 month = 10% earning boost on all rewards
• Hold your Data Reward Tokens for 2 months = 20% earning boost on all rewards
• …..up to 5 months = 50% boost
• Boost resets to 0% if user moves or sells any data-reward tokens.

*Note: The specific numbers above are not final as-of the time of publication. See product documentation at the time of release.

A further Reserve Allocation will be used on an as-needed basis, to fund additional incentives, or to boost the reward pool if deemed necessary. This may be structured so that the release of funds from this allocation will only be authorized by Community Vote.

Due to the fixed, time-based structure of the Bonus Reward pool, there will likely be un-awarded tokens from every period. The fate of these tokens can also be the subject of a periodic Governance Vote (more on that later).

Reward Token Outflow Chart:

4) Transition to a Deflationary Model

A transition to a deflationary token model will be accomplished through the following mechanisms:

• Reducing token outflows over time (data rewards) — discussed previously.
• Burning of tokens from circulating supply using data revenues — discussed previously.
• Consumption of the Cirus Token by the product Ecosystem — discussed below.

An initial increase in Circulating Supply, in line with current outflow rates, will take place as Data Rewards are issued. The Buy & Burn (as revenues increase), combined with Ecosystem consumption will match and eventually exceed outflows, resulting in supply deflation.

Consumption of the Cirus Token by the Product Ecosystem

The Cirus Product Ecosystem already has several mechanisms which consume the Cirus Token, including Earning Level Upgrades and Wallet Transactions of various types. Tokens collected from these mechanisms are also considered secondary revenue and will be burned accordingly (at 50%).

Additional product features and functionalities will be added to the Web3 Labs section of the Wallet going forward. Some of these features are nearing completion, and some are still being assessed by our Research Team, awaiting the green light for development. Specific details on each will be provided before they are implemented. Some of these new features will include a revenue component (in Cirus Tokens, or otherwise), which will be considered secondary revenue like the existing mechanisms mentioned above.

Node Deployment

Cirus Tokens will also be required to deploy a Node on the network. Details on this process are not finalized at this time, however a token lock and/or burn will likely be required to activate a Node. The initial Node architecture has been drawn up but is still being worked on. Nodes are not intended to be Blockchain nodes initially, as the need for decentralized architecture within the Cirus Data Network will come before the need for a dedicated blockchain.

This means that Cirus Nodes will be functional parts of the data infrastructure (and compensated as-such), well before they are upgraded to support a dedicated blockchain.

At a later date, a separate briefing document will be published to outline the objectives and buildout of the Cirus Data Network, with more detail on the network architecture and components.

The Node reward allocation is set aside as incentives for users to participate and become more of an integral part of the network. The exact structure of node rewards will likely mimic the Data Reward structure, with a potential blending of, then switch to 100% real-revenue over time, as-appropriate.

As with the other reward bucket(s), there may eventually be un-allocated tokens which can be re-allocated, burned etc.

Governance

With the implementation of this new token structure, there will be multiple points in the future where decisions must be made on various aspects of the Cirus Token Ecosystem, like what to do with excess allocated tokens, or how to proceed with Buy & Burn strategies, as highlighted previously. As these decisions primarily affect Cirus product users and token holders, it is important that they are involved in the decision-making process.

To facilitate this, we are evaluating two options:

1. Add a direct Governance function to the Cirus Token.
2. Create a separate Cirus Governance Token (tied to the Cirus Token) to facilitate governance votes for those who wish to participate.

Both options have benefits and drawbacks, so the decision is being assessed carefully.

In either case, some modifications to the Cirus Foundation will have to be made to create an appropriate structure, and officially recognize the decisions made by the voting group. There remains ample time to assess the options and make any requisite changes, however some smaller decisions may come up in the interim. In these cases, decisions will be referred to the Cirus Discord Community where announcements will be made, and votes set up.

Other Considerations

Cirus Staking

There are currently two Cirus staking pools: The Cirus Community Staking Pool (operated by Cirus) and the MantraDAO Cirus staking pool (operated by MantraDAO).

Switching to a deflationary token model is somewhat at-odds with the philosophy of staking as it is currently implemented (constant supply inflation), however the ecosystem value of locked (staked, non-circulating) tokens is recognized.

The plan is therefore to maintain one staking pool in the short-to-medium term, and then wind down slowly (with lots of notice) after we’ve fully transitioned into the new model.

Important Note: The staking and token hub will not be decommissioned. The rewards will simply be reduced to zero over time, with new staking disabled, so no user tokens will get stuck or lost.

After that point, there are multiple options, including introducing real-revenue staking, or diverting unused Data Reward-Boost tokens into the staking pool. Again, these decisions can be put through a Community Governance process to be voted on and implemented.

Implementation Timeline

As mentioned previously, some adjustments must be made to the Cirus Wallet User Interface and Backend systems to accommodate the proposed changes. While they are not major changes, it is important that we run through our full Quality Assurance process before releasing the updated build, as these are changes to a major component (the reward system). We may also take the opportunity to add some quality-of-life improvements to the product which have been requested by the community.

As such, we anticipate a 2–3 month period between the release of this document and the official kickoff of the new reward system. Finalization of the token allocation and burn numbers should take place within a transition period after the new system is implemented. Further announcements to that end will be made in time.

All other changes (burns, reallocations, CMC Updates etc.) will start immediately.

Cirus Foundation Mission — Our mission is to accelerate the ownership economy by building the on-ramp for individuals to own, manage and monetize their largest digital commodity — Data.