We are pleased to bring you our updated $VRA tokenomics article and with it, an updated whitepaper. The expanded tokenomics will give us a fresh approach for Q2 as we work towards a clear path for enterprise adoption and renew our business focus on generating revenue alongside our B2B partners.
Before we get started, we want to make our tokenomics position clear. Verasity ($VRA) tokenomics, in our opinion, has not fundamentally changed. What has changed is the way in which we position this information and make it clear and transparent to our community.
Please note: With this article, all past articles on our tokenomics are made obsolete. Please use this article as a single source of information for tokenomics in the future.
1) Tokenomic Information
- Token name: Verasity
- Token ticker: $VRA
- Smart contract address: 0xF411903cbC70a74d22900a5DE66A2dda66507255
- Smart contract audit
- Etherscan entry
- Maximum supply: 110,356,466,695 $VRA
- Total supply: 110,356,466,695 $VRA
- Circulating supply: 10,356,466,695 $VRA
$VRA maximum and total supply includes PoV marker tokens that are used within our ad stack and do not contribute to circulating supply (i.e. they are not traded in the market). Total supply, which is reflected on third-party information sites, includes all $VRA issued minus tokens that have been burned, while the max supply refers to all coins that will ever come into existence. For simplicity, maximum supply and total supply have been made the same, and all $VRA tokens in existence, including marker tokens, are minted at the time of writing. We elaborate on marker tokens, other activities, and our planned buy-back and burn mechanism below. Firstly, we would like to address top $VRA wallet addresses and why they hold large amounts of VRA.
2) Tokens Held on Exchanges and Third Parties
At any given time, large $VRA wallets may be present on centralized exchanges. Tokens held on exchanges are not made available to trade on the open market at any one time. Instead, they are used by market makers to provide buy and sell-side liquidity. This is commonplace in crypto markets and exchanges require tokens in order to provide a listing for $VRA. Therefore, exchange wallets appearing in our top wallet holders by token amount is a normal part of providing liquidity to trading pairs.
Like the majority of projects in the crypto space, Verasity deploys market makers to encourage stable and predictable trading action in line with the wider market conditions. Market-making services, many of which are operated by the exchanges themselves, require tokens to be held in exchange accounts to facilitate trading. As our daily trading volume is now high, we are required to make an adequate proportion of our tokens available for liquidity, held in exchange wallets.
In the specific case of the ‘Kucoin 6’ wallet, Verasity holds $VRA tokens there in custody. It is common for projects to use secure, institutional-grade offline storage solutions for crypto assets. As third-party solutions are insured against loss, this is the lowest risk solution for the storage of team tokens and those used for delivering staking rewards. As we have seen with many other projects in the crypto space, losses arising from hacks and exploits cannot always be recovered. This would not only hinder our ability to do business effectively but it would also impact staking rewards to $VRA holders in the VeraWallet.
Therefore, a third-party insured custody arrangement is utilised in addition to our own custodial wallets (VeraWallet) to diversify our risk and protect both our users, wallet holders and Verasity. We are freely able to utilise the $VRA held in cold storage as we require for our business purposes and objectives (e.g. paying out staking rewards as detailed below) and it remains in the Verasity organisation’s possession. It is not a wallet designed for trading. We hope this gives context as to why a significant portion of $VRA appears to be held on KuCoin when examining our top wallet holders.
3) Team Tokens and Staking Rewards
Further to the tokens mentioned above, a portion of $VRA tokens, almost 2.2 billion in total, are reserved for operational and team requirements. Tokens reserved for operational and team requirements are held in cold storage in the aforementioned Kucoin 6 wallet. We use them primarily for marketing expenses (e.g. embarking on co-marketing initiatives or trading competitions with exchanges) and for operational purposes (e.g. deal flow for Esports tournaments etc.) if and when required.
Our staking reward wallet was established with an initial $VRA balance of 847,500,000 tokens. This number will reduce as we distribute staking rewards to our VeraWallet staking participants. Staking rewards have also been funded through market purchases using operational funds from other Verasity-owned wallets. Staking was extended from the 1st April 2022 at 15% until the 31st March 2023.
4) Proof of View Foundation Tokens and the Creation of a Corporate Acquisitions War Chest
In total, 100 billion Proof of View Foundation Tokens will be minted, as previously discussed on August 23, 2021, in this Medium article. Proof of View Foundation Tokens, as we have shared above, are essential to the functioning of our business goals and ad tech stack technology. For PoV we make 90bn marker tokens available (again, do not impact circulating supply) and 10bn foundation tokens necessary for meeting our business requirements as we discuss in detail below. As we shared in our recently updated whitepaper, PoV marker tokens (90bn) are exclusively minted and made available to our enterprise partners purely for PoV utility. They do not affect the $VRA circulating/tradeable supply. Our centralised exchange partners have been notified of our plan to issue PoV tokens and are likewise satisfied that they do not and will not affect the circulating supply of $VRA.
Proof of View Foundation Tokens are minted to serve as marker tokens for data circulation within Verasity’s ad tech stack (VeraViews, powered by Proof of View) during ad campaigns; for NFTs within the VeraVerse ecosystem; for digital resource management, and for related activities for the benefit of achieving the business objectives of the company.
We have also recently decided to set aside 10 billion tokens, as discussed above, in a ‘war chest’ to fund potential corporate acquisitions to advance the adoption of Verasity’s technology. This could include for example a publisher or advertising technology business. That may also include incentivising new or existing management in connection with any such acquisition. We also intend to use some of these 10 billion tokens for any other use which in the judgement of senior management is useful for the furtherance of the business interests of Verasity. This may include incentivising senior talent for the company’s benefit (i.e. bringing senior talent to Verasity from a company we acquire).
We have identified potential acquisition targets which we believe will serve the company and community interests well, but which are commercially sensitive to name at this time. We wish to make one or two good strategic acquisitions this calendar year, but we will only proceed in doing so if we are confident that the purchase price will be in our interest. As and when Verasity makes acquisitions, the tokens used for purchasing the acquired companies (from our 10bn corporate acquisitions warchest) shall be locked and vested for a predetermined period of time by the target company and therefore not impact circulating supply for years.
Eventually, the 10 billion tokens we have allocated for acquisition purposes will make their way back into the circulating supply should we make acquisitions, but we would expect the value of any company acquired to add value to our own market cap, through the growth of Verasity as a whole. This would proceed in a similar fashion to the well-established mergers and acquisitions process in traditional publicly-listed companies, whereby an acquisition of a target company tends to exert a net positive on the acquiring company’s market position and market cap over the long term. We hope this gives our community some context into our strong growth strategy and pursuit of opportunities that will enable us to expand our enterprise offerings.
We would like to take this opportunity to remind the Verasity community that Proof of View marker tokens, of which 90bn have been issued, will never be made available for trading outside of circulation within the Proof of View system or used for our corporate acquisition purposes. In turn, Verasity’s enterprise clients who use marker tokens have no means to manipulate, trade, or sell marker tokens, and they never have control over these tokens outside of our ecosystem (i.e. they cannot send them outside VeraViews).
We chose to use $VRA for use as Proof of View marker tokens because it will carry an intrinsic, market-defined value by which we can establish the portion of $VRA required for an advertising partner’s ad campaign. Outside of the use of the 10 billion tokens reserved for corporate acquisition purposes, these tokens are only used within the Proof of View system for the purposes of recording PoV data.
The rest of this article will now focus on why we require the remaining 90 billion marker tokens for our ad stack to function, and how their use influences and powers our solution for enterprise partners.
5) Accommodating Enterprise Partner’s Needs
Our partnership with Brightcove has opened the door to a multitude of enterprise opportunities, making the VeraViews ad tech stack available to be deployed by leading publishers and advertisers worldwide.
While VeraViews now sits on the Brightcove Marketplace through VeraPlayer, and will soon be available natively through the widely adopted Brightcove Player, it’s important to remember that it is Brightcove’s ~5,000 clients — not simply Brightcove themselves — who will be adopting our solution and generating revenue for us.
However, each client that comes on board through 2022 and beyond, either through Brightcove or other avenues, will require a significant amount of $VRA tokens as marker tokens in order to properly utilise VeraView’s PoV technology. This has necessitated the need to issue 90 billion tokens to power our solution, but as we have mentioned, these tokens will not affect our tradable supply. Instead, we can view these tokens as being essential for the growth of Verasity as a project and necessary to deliver on our business case.
What is the role of the PoV marker token within VeraView’s ad tech stack?
As detailed in this article, when brands, agencies, or publishers use VeraViews or leverage the VeraViews ad tech stack through Brightcove, they must deposit VRA tokens to VeraWallet and create an escrow pool.
This VRA escrow pool is used to fund ad campaigns. Profits generated from this mechanism — for example, Verasity’s revenue share from ads earned — are used by Verasity for operational expenses. As a result, an ample supply of VRA is necessary to function the VeraViews ad tech stack and a sustainable revenue model for Verasity as a business.
Token Buy Backs and Burn Mechanisms and Future Utility
We have also deployed a token buyback and burn mechanism, using a portion of our profits from VeraViews, as described above, to gradually burn the circulating $VRA supply at regular intervals. Tokens to be burnt will be taken from the 10,356,466,695 $VRA circulating supply, thus reducing the amount of $VRA available to trade. Therefore, the supply of $VRA, in our opinion, is deflationary.
Further use cases for $VRA in the near future will be rolled out, including but not limited to its use within the VeraVerse NFT marketplace. Here, we are planning to use $VRA for minting and issuing NFTs, for marketplace purchases, and for paying network fees.
Finally, we have plans during H2 2022 to explore the roll-out of a payments network for $VRA. Intrinsically linked to the VeraWallet and the upcoming VeraCard, this network would leverage our Watch & Earn functionality and our low-cost purpose-built side chain, VeraChain, to provide a platform for transfers of value and a whole host of payments options.
As you can see, we are constantly looking to bring utility and value to the $VRA token, not only through our focus on VeraViews adoption but also by building out an entire ecosystem of supporting infrastructure and other product verticals alongside it.
