Token economics for the Evrylife utility token
For a platform to be governed by its users and run in a decentralized fashion. The initial distribution of tokens is important. For an application such as Evrylife to operate as intended, it is important to reduce the risk of the Evrylife native token being considered as a security. Therefore, the Howey Test needs to be taken into account.
The token release for any anti-greed community focused decentralized application should be done in a way that allows for governance to be distributed as wide reaching as possible in a fair way.
The original idea was to have a fair launch auction. A fair launch auction platform helps to ensure a fair distribution of tokens by allowing participants to have an equal chance in acquiring the tokens. There would be no private sales, no team or advisor allocations. A problem that arises with this original 'crowd-sale' token distribution event is that it requires 'an investment of money/digital assets' by the participants. Secondly, this fair launch crowd-sale would generate funds that would be used 'towards the building of the platform'. Both of these create red flags that would put the Evrylife native token under the scrutiny of security regulations which hinders the ability for a decentralized social networking application to flourish. So although a fair launch does help to keep the anti-greed mindset and allow equal opportunity to all those who would like to participate it comes at a cost.
What can work better is if there is 'no crowd-sale' meaning there is 'no investment of money' or digital assets by any participants. Instead the Evrylife native token is gifted and/or earned. This can be accomplished through an airdrop process and also through the token smart contracts community governed treasuries which function to distribute tokens to those who perform tasks in the Evrylife application such as content moderation tasks and app development tasks.
Another issue that many projects face that crosses the line from utility token to security token is the payment of dividends. In place of dividends the smart contracts for Evrylife will provide users with reward tokens that are used for benefits and services in the Evrylife application. Rewards can therefore be designed to pay for decentralized storage services, decentralized bandwidth usage, discounted products and services being sold by other users, subscription based content being offered by other users, and so forth.
The token economics for this type of token distribution can look something like this:
# Token Allocation
Airdrop (early user/wallet app and ecosystem interactions)
DEX Liquidity Pool
Staking Rewards Treasury
Mod Task Rewards Treasury (flag audits)
Mod Task Rewards Treasury (database improvements)
Mod Task Rewards Treasury (dev fixes/bounties)
App Operational Costs (Hosting/Storage/Computing)
The total inflation amount of new supply is a community governed variable. It is suggested to be as small as possible as to not negatively affect the ecosystem to help preserve the longevity of the network and keep a healthy balance between supply and demand. A new mint supply of [suggested 3-4.5%] of the total token supply per year is suggested. New mint supply in combination with transaction fees, burns, user donations, etc that occur throughout the app allow for the ecosystem to operate, remain moderated, and evolve.
- 1.Moderation and Development rewards treasuries
- The % of new mint allocated to the mod rewards treasuries is to be a feature where votes by staked token holders determine the % as a community governed variable. Rewards to users that perform mod tasks are distributed from the balance of these treasuries based on a fixed linear period (for example a rolling 10 years). The amount available comes from previous end of year balance, plus new mint allocation, plus any transaction fees, slashing amounts, and donation amounts which are allocated to this particular treasury.
- The % of new mint allocated to the development rewards treasuries is to be a feature where votes by staked token holders determine the % as a community governed variable. Dev treasury rewards are used to incentivize developers to complete pending upgrades, app improvements, and new features requested by the community.
2. Staking rewards treasury
- The % of new mint allocated to the staking rewards treasury is to be a feature where votes by staked token holders determine the % as a community governed variable. The reward amount for staked token holders depends on things such as the total amount they are staking (weighting), the total amount of tokens staked as a percent of total supply, and the balance of rewards available in the staking rewards treasury based on a fixed linear period (for example a rolling 10 year period).
3. Application operating costs treasury
- Application operating cost holdings is a community governed variable. This treasury automatically pays for any decentralized services and protocols that the Evrylife app needs to run. It is suggested to hold a few years' runway of the projected app costs. When this treasury reaches the amount the community decides is a good holding level, excess supply is suggested to be allocated to the other community governed treasuries.
4. Causes treasury
- The % of new mint allocated to the causes treasury is chosen by the staked token holders as a community governed variable. This can be set at 0% as this treasury is more for donations for when the app or users wish to contribute a portion of their rewards or net earnings from things like their subscription earnings, product and service sale earnings, or other revenue streams.
5. Airdrop treasury
- This treasury allows for the possibility of new people wanting to use the Evrylife app for free 'as a gift'. They can receive airdropped tokens through performing a series of tasks. This can allow users to get their foot in the door by creating an account and exploring the Evrylife app as a signed in user. From here users can choose to participate in mod tasks to earn rewards and increase the storage space they have available with their account by keeping their airdropped tokens staked. It is suggested that users be required to perform a zero knowledge verification to prove human individuality and non duplicate account in order to be eligible to receive 'new account related airdropped tokens'.
Recycling token supply and making tokenomics more of a circle (Sustainable). The goal is to have these feel like they are not even there, yet they help to keep the ecosystem more sustainable.
- Subscription payments
- Purchase of products/services
- The transfer of any rewards earned that are sent to a user will not have any unnecessary fees or burns involved.
- Transactions involving donations from users to community treasuries will not incur any unnecessary fees or burns. This includes both direct donations and percentage allocated donations.
Slashing is a way to discourage bad behavior in the Evrylife ecosystem. All users are required to have Evrylife tokens staked in order to run an account, to add content, to perform mod tasks, to flag other users content, and to provide necessary services to the platform which other users need. Slashing is a way to deter things like poor quality flag system mod task responses, posting content that violates community guidelines, and abusing the flag system.
Community governed variables allow staked users to adjust variables that govern the smart contracts which run the Evrylife application and token module. Community variables are the weightings and rates for things such as rewards, slashing, new mint, transaction fees, and burns.
Anyone can choose to help fund causes or the community governed treasuries by direct donations or by choosing to allocate a percentage of their accounts rewards or revenue earned to them. This is optional and comes with the benefit of having content displayed in additional content sections which showcases content that is helping to fund evrylife causes and able to be purchased by users at a discount using Evrylife tokens.
Users can also choose at the individual product/service level and from their own subscription packages in which they offer their subscribers to allocate anywhere from 0% to 100% of the revenue they earn to donate into community treasuries.