Introducing UTK 2.0 — The Tokenomics Upgrade That Will Transform The Utrust Token Into A Powerful Digital Currency Ready For Global Adoption
Today is a big day for Utrust and Elrond. It is the day we present a new economics model for UTK 2.0.
One designed to reshape payments, putting Utrust, our community and merchants at the epicenter.
Time to enter the next level.
So what does this new model bring?
- powerful and new utility;
- a potent value accrual mechanism;
- a new economics model;
- a remarkable bootstrapping process;
- a much wider distribution to a larger community.
What is the core utility of the UTK 2.0 token? The purpose of the UTK 2.0 token is threefold:
- to incentivize accepting crypto, and paying with crypto;
- to capture value as more payments are made through the platform by combining a buy & burn mechanism for each transaction;
- to align the interests of all actors, users, merchants, etc. by transitioning to a DAO governed by token holders.
1 — Core Utility Model 💡
You know the reason why we are here: we want to further enable Web3 payments. Not for some, for all. The purpose of the token is to accelerate this. To incentivize not just the usage of crypto, but its usage as money 💰
So we are going to make it really advantageous for everyone to accept crypto and pay with crypto.
Cashback, staking and premium features for all!
First things first: you use Utrust products, you get cashback. Even if it’s only a little teeny tiny purchase. Even if you only own a very small amount and you don’t have anything staked.
You still get cashback.
If you do stake some UTK, though, we will increase your cashback. Because you are taking UTK out of circulation, which is good for the economic model. The more you stake, the more you get back with every purchase.
The exact figures and tiers will be announced closer to the launch of the staking and cashback program, but here’s what we’re working with:
*Values need to be locked for a certain amount of time.
*All cashbacks are paid in UTK.
But how about merchants? Do merchants not get a staking model?
Yes, yes they do. If merchants decide to stake their UTK with us, they too will unlock several tiers of our brand new premium feature:
Merchant yield 💸
This is just a working model, and all figures and rates will of course depend on market and business conditions, but here’s how the Premium model will look to merchants:
— Premium Merchant Features
* All figures and rates are not guaranteed and are subject to be changed depending on market and business conditions.
* Merchant and user cashback will have a monthly cap per merchant/user.
*All cashbacks are paid in UTK.
Depending on the amount of UTK staked, they will unlock the possibility of receiving up to a whopping 25% interest on crypto-native payments they keep with Utrust. This is what we are offering merchants: if instead of moving their money from our platform to a bank they choose to keep it with us, we will turn their payments from a source of expenditure to a brand new source of income.
We have said it in the past, and we will say it again: a payment gateway needs to make merchants money, not the other way around.
Now, thanks to UTK 2.0, that’s exactly what will happen.
On-chain staking ⛓
If you watched our Town Hall (shame on you if you didn’t! 😳), then you will know that we promised several staking models.
And, once again, we deliver 💥
There are several features that will enable the token to accrue value over time, specifically building demand for the token while at the same time decreasing circulating supply. This is one of the ways we will be achieving this:
The 5-year on-chain staking program will allow for extremely appealing dynamic rates. It couldn’t be simpler: the longer you keep your UTK in staking, the better your rewards. The estimated APR (Annual Percentage Rate) in the first year will be somewhere between 15%-35% depending on the amount staked.
Staking rewards allocated per each year are as follows:
Not only will the rewards be awesome, but long-term staking is also how you will unlock some of the premium features mentioned above, such as the multiple tiers for merchant yield functions and the payments cashback for both merchants and users.
2 — Economics model 👨🎓
So let’s talk about bootstrapping. For those unaware, bootstrapping is the word we use to describe a process that is self-starting and continues to develop and grow without the need for much intervention.
This is exactly what we want for the UTK economy. We want to put the right incentives in place, and let this brand new economy flourish.
How will we do this?
This one couldn’t be simpler either. We want people to use our platform, and people will be using it more and more. We will reward this with UTK, as explained above.
By using cashback on both the merchant and the user side we will incentivize the usage of the platform: accepting crypto, and paying with crypto. This is, of course, an inflationary model, but with a twist. With the merchant yield and staking programs, we will incentivize merchants and users to lock the Utrust tokens and by doing so they will get more rewards in UTK and access to higher tiers and premium features. This will put pressure on the market by reducing the circulating supply 💸
Here’s how we envision the distribution of tokens, as mentioned above:
*The goal is through the burning mechanism the economic model to evolve to a deflationary one with a max supply equal to 250M tokens, excluding the community treasury DAO (it’s all explained below).
Here are a couple of visual allocations of the distribution:
If you’re wondering about what “Meta Bonding” is, just keep reading. We will get to it.
Of course, we want to do even better. We will put the incentives in place so the model can devolve to a deflationary model.
The buy and burn mechanism ⚙️🔥
For every single time someone uses our platform to make a payment with crypto, we will look at the value of that transaction and we will do two things:
- Purchase 0.5% of that value on the open market and destroy those UTK;
- Purchase 0.5% of that same value on the open market and add those UTK to the community DAO treasury.
Ultimately, as the usage and adoption of the Utrust platform grows, the number of transactions and volumes will increase. For each transaction, 0.5% of the value will be used to buy UTK and burn it. Another 0.5% will be purchased at the same time and will go straight to the DAO treasury. Since the supply is fixed, and the maximum supply is to be reached in 5 years, the sooner and the greater the volumes increase the faster the supply will decrease.
Once the supply reaches the value of 250 million tokens, the burning will stop and buybacks will go to the DAO treasury, their usage to be decided in a decentralized way by the token holders.
3 — DAO and Web3 🔮
This is a very important part of this document. We want to build payment and financial systems and services that aren’t just more efficient. We need them to be more inclusive, fair, and transparent
This is at the very core of what we do.
On Web2, value flows inwards. It goes to the centralized institutions and corporations that are at its center. By transitioning to a DAO, where a part of the fees from all transactions goes straight to the DAO Protocol treasury, we will enable value to flow outward.
The treasury DAO will be governed by token holders and every key decision regarding the funds held in treasury will be voted on and decided democratically.
4 — Bootstrapping process and Meta Bonding 🔁
At the end of the day, we want this economy to run itself. We want everyone involved with Utrust and everyone who uses and holds UTK to take full advantage of what we’re building. That means bringing the core Elrond and Maiar DEX community of holders, builders and contributors in as well.
They are part of our family, and we are a part of theirs. We are one community now, and together we are unstoppable. So to make sure they seamlessly become a part of this economy, we are offering a 2 year snapshot and claiming program.
We know who these core community members are, and that’s the ones that already have skin in the game. EGLD stakers and LKMEX farmers, we mean you guys. We will be using the Meta Bonding program in close connection with the new staking incentives to set a new economic flywheel in motion 🎉
As such, in the first months, in order to ignite the bootstrapping of the UTK token on the Elrond community, a time-limited Supercharger Bonding process will take place.
EGLD stakers and LKMEX holders will be able to claim a limited number of UTK. This is what we call Meta Bonding.
So, and to recap:
When will this start?
While not every step of the way depends on the team, we will be doing everything we can to deploy the token swap bridge in March through a simple to use interface. From March onwards we will deploy on-chain staking and release main features into the products. Everything else will follow.
Until then, cheers!