IoTeX Tokenomics — Part 3: Burn-Drop to Bootstrap 1 Million IoTeX Devices!
Welcome to the IoTeX Tokenomics series. In Part 1, we explained the utility of the IOTX coin. In Part 2, we introduced the DAO-based tokenomics design. In Part 3, we share how the “Powered by IoTeX” ecosystem will be bootstrapped.
Introduction
The IoTeX Network has limitless potential. With 25 billion IoT devices in the world today and 100 billion IoT devices coming by 2025, IoTeX will empower the next generation of human-centered smart devices. The biggest challenge for any new ecosystem is bootstrapping (i.e., going from 0 → 1) — we are excited to share new tokenomics-based initiatives to bootstrap the first 1 million “Powered by IoTeX” devices.
The IoTeX Network unites device builders, service providers, and consumers. Devices are at the core of the IoTeX Network — without a critical mass of devices, service providers and consumers will be limited in their ability to service and evangelize. The journey to 1 million “Powered by IoTeX” devices will jumpstart a dynamic cycle of innovation and adoption. More “Powered by IoTeX” devices will attract new service providers, more diverse/reliable services will enable new devices, and so on — this perpetual cycle will ultimately drive long-term growth and value for the IoTeX Network.
In the IoTeX Network, 18% of the total IOTX supply (i.e., 1.8 billion IOTX) has been reserved for the Ecosystem Fund, which will be used to bootstrap the “Powered by IoTeX” ecosystem and incentivize device builders, service providers, and consumers to contribute to IoTeX in unique ways. In this article, we outline new network-wide initiatives — Burn-Drop, Halo grants, Referrals — to bootstrap the first 1 million “Powered by IoTeX” devices.
Burn-Drop: 1 Billion IOTX for 1 Million Devices
Introducing Burn-Drop, an innovative tokenomics design where 1 Billion IOTX (10% of total supply) will be Burn-Dropped as we onboard the first 1 million “Powered by IoTeX” devices. Out of the 1 Billion IOTX to be Burn-Dropped, 90% will be burned and 10% will be “dropped” (i.e., distributed to voters that auto-stake for ≥ 91 days).
Throughout the Burn-Drop program, a total of 900 million IOTX (9% of total supply) will be burned and taken out of circulation, while 100 million IOTX (1% total supply) will be “dropped”. This process will be facilitated by smart contract and a new Burn-Drop will be triggered immediately after every new “Powered by IoTeX” device is onboarded in a cumulative fashion.
Burn-Drop will have a total of ten phases with earlier phases having a higher Burn-Drop rate. In Phase 1 (i.e., the first 1,000 devices), a total of 100,000 IOTX will be Burn-Dropped for every new “Powered by IoTeX” device. In subsequent phases, the Burn-Drop rate will be halved (i.e., Phase 2 = 50,000 IOTX Burn-Dropped per device) while the number of devices-per-phase will be doubled (i.e., Phase 2 = 2,000 devices). We provide the full Burn-Drop schedule below:
After 1 million “Powered by IoTeX” devices are onboarded, the Burn-Drop program will be finished and the “Burn-to-Certify” program will be activated. From then on, builders (e.g., device manufacturers) will burn IOTX to obtain access to special services and capabilities for each new device. This will continue in perpetuity and the total supply of IOTX will decrease with every new “Powered by IoTeX” device. The ongoing “rate of burn” will be set towards the end of the Burn-Drop program and may be adjusted over time via network voting. In the graph below, we provide an illustrative graph of Total IOTX Supply vs. Total “Powered by IoTeX” Devices based on various “rate of burn” assumptions and the current $IOTX price.
The Burn-Drop program directly incentivizes builders (i.e., device manufacturers) by covering device certification costs and also incentivizes IoTeX stakeholders by returning value to the network for every new device. Burn-Drop will bring diverse benefits to energize the IoTeX Network:
- Support device builders by covering certification costs
- Encourage stakeholders to evangelize “Powered by IoTeX” devices
- Catalyze the device builder + service provider innovation cycle
- Reward long-term stakers and drive value to IOTX coin
Halo Grants
To fuel the development of new “Powered by IoTeX” devices and services, we are proud to launch Halo, the official IoTeX grants program. Halo is targeted at developers interested in building IoT and privacy-related projects on the IoTeX platform, as well as ecosystem builders that want to expand the capabilities and reach of IoTeX. Halo will pave the way for new trusted devices and applications to fuel the next generation of IoTeX.
The Halo Program provides funding and technical support to empower projects that benefit the IoTeX ecosystem — 8% of the total IOTX supply from the Ecosystem Fund will be allocated to Halo Grants. In the future, additional IOTX may be allocated to Halo Grants at the discretion of the IoTeX Foundation. There are two types of Halo grants that you can apply for:
- Open-ended Proposals (OEP): receive hands-on support from the IoTeX Foundation to turn your next big idea into reality. Approved OEPs will receive a grant of ≥1.2 million IOTX, which will also allow them to become an IoTeX Delegate and receive votes/awareness from the IoTeX community. Pitch us your idea and build it on IoTeX!
- Request for Proposals (RFP): claim projects from a “wishlist” that have a pre-defined scope of work and funding limit. Although technical support is available by request, RFP applicants should have prior experience building similar projects. Funding is delivered in phases after specific milestones are met — make the IoTeX Network more robust, apply today!
Referrals Program
In addition to Burn-Drop and Halo Grants that will bring new device manufacturers and developers to the IoTeX ecosystem, another core pillar of bootstrapping is referrals to welcome new consumers to the IoTeX Network. The global IoTeX community (like you!) plays an important role — not only can you purchase/use “Powered by IoTeX” devices to take control of your privacy, but you can also receive rewards for helping to drive sales of “Powered by IoTeX” devices through various eCommerce platforms. The full details of our Referrals Program and the Ucam launch date on Amazon will be announced in July 2020.
With Ucam set to launch on Amazon in early Q3 2020 and Pebble Tracker coming soon, the ways to support the IoTeX Network as a community member will expand greatly. If you are interested in working with the IoTeX Foundation to bring “Powered by IoTeX” devices to your country, please reach out to an Admin on Telegram.
What’s Next?
Throughout our IoTeX Tokenomics series, we introduced new utility for the IOTX coin (Part 1), new DAOs to enforce tokenomics (Part 2), and new plans to onboard the first 1 million “Powered by IoTeX” devices (Part 3). The three pillars detailed in this article — Burn-Drop, Halo Grants, Referrals — provide clear near-term incentives for device manufacturers, developers, consumers, token holders, and more to bootstrap the “Powered by IoTeX” ecosystem. Once the ecosystem is bootstrapped, IoTeX’s sustainable tokenomics design will kick-in to drive continued transparency, utility, and value to the IoTeX Network.
As the Internet of Trusted Things comes to life with the first blockchain-powered IoT products like Ucam and Pebble Tracker, the potential impact of IoTeX has never been greater. Furthermore, the roles of various network participants — device builders, service providers, consumers — and the spectrum of interactions between them are evolving by the day. With this foundation, we are now ready to transform the Internet of Things forever. We are now one step closer to our vision for the Internet of Trusted Things — join us!
About IoTeX
Founded as an open source platform in 2017, IoTeX is building the Internet of Trusted Things, an open ecosystem where all “things” — humans, machines, businesses, and DApps — can interact with trust and privacy. Backed by a global team of 30+ top research scientists and engineers, IoTeX combines blockchain, secure hardware, and confidential computing to enable next-gen IoT devices, networks, and economies. IoTeX will empower the future decentralized economy by “connecting the physical world, block by block”.