To bootstrap our vision for the Internet of Trusted Things and incentivize network growth, IoTeX launched Burn-Drop v1 in October 2020 where IOTX is burned and dropped for every new device (e.g., Ucam) registered to the IoTeX Network. To date, ~3,000 IoTeX devices are active across 55+ countries, which has fueled 180M+ IOTX (~$9M USD) Burned and 20M+ IOTX (~$1M USD) Dropped to token holders. With new devices like Pebble Tracker launching soon, the number of IoTeX devices will grow exponentially in the coming years.
Burn-Drop is an elegant tokenomics design that links network growth to stakeholder value — it not only makes the total supply of IOTX deflationary over time via “Burns”, but also incentivizes stakeholders to onboard new IoTeX devices via “Drops”. Since the launch of Burn-Drop v1, we have iterated on our tokenomics design and are proud to introduce Burn-Drop v2, a major tokenomics upgrade that:
- Delivers “Airdrips” of mimo LP tokens (i.e., IOTX-XRC20 token pairs) to Burn-Drop eligible stakers on a continuous basis, enabling new projects to bootstrap their communities and engage with IoTeX “true believers”
- Provides boosted IOTX rewards (“Drops”) to Burn-Drop eligible stakers in line with network growth via adjustments to the Burn vs. Drop ratio
- Sets the foundation for decentralized governance to give Burn-Drop eligible users voting power for future changes to Burn-Drop tokenomics
In the rest of this blog, we outline the key features of Burn-Drop v2 that will be activated starting Phase 3 (i.e., after crossing 3,000 devices).
Airdrips of IoTeX Ecosystem Project Tokens
The IoTeX Network is expanding rapidly with a multitude of amazing ecosystem projects launching XRC20 tokens on the IoTeX Network. The addition of “Airdrips” to our Burn-Drop tokenomics will create a win-win situation for ecosystem projects and long-term stakers — projects can directly engage the “true believers” of the IoTeX Network, and long-term stakers can earn a variety of new mimo LP tokens (i.e., IOTX-XRC20 token pairs) on a continuous basis.
To fund Airdrip, we have allocated 25% of the total Burn-Drop IOTX supply, which will be contributed gradually to a new Airdrip DAO after every new device is registered to IoTeX. This Airdrip DAO will utilize a points-based system where Burn-Drop eligible users will be “dripped” non-transferrable points on a continuous basis proportional to the size and duration of their stake, which they can then use to claim mimo liquidity pool (LP) tokens that represent ownership of various IOTX-XRC20 token pairs. The longer you participate in Burn-Drop, the more points you will earn, and the more mimo LP tokens you can claim! Here is how it all works:
To celebrate the launch of Airdrips, IoTeX is hosting a special kickoff campaign called Airdrip IGNITE — we have teamed up with ecosystem projects Cyclone $CYC, Metanyx $METX, Vitality $VITA, Unifi $UP, and SonicDiamond $SDI for “Coin of the Week”. For five consecutive weeks, a new ecosystem token will be delivered to Burn-Drop eligible stakers starting the week of April 26 — get ready and join Burn-Drop today by staking your IOTX ≥91 days with stake-lock on!
Boosted IOTX Rewards via New Burn vs. Drop Ratio
For Burn-Drop v1 (i.e., Phases 1 & 2 up to 3,000 total devices), every new Burn-Drop event consisted of a 90% Burn vs. 10% Drop. Starting Phase 3 (i.e., after 3,000 total devices), the Burn vs. Drop ratio will be adjusted to 50% Burn vs. 25% Drop vs. 25% Drip, which provides boosted IOTX “Drops” for long-term stakers in addition to the continuous XRC20 “Drips” detailed above.
- “Burn”: IOTX is burned and removed from circulation by sending to a “zero address” that is inaccessible by anyone
- “Drop”: IOTX is dropped to the wallets of long-term stakeholders (i.e., those that stake-lock ≥91 days)
- “Drip”: IOTX is sent to the Airdrip DAO to incentivize ecosystem projects to contribute XRC20 tokens to the DAO on a continuous basis;
With this adjusted Burn vs. Drop vs. Drip structure, stakers can receive significantly larger and more diverse rewards for being a long-term believer in the IoTeX Network. In the future, the Burn vs. Drop vs. Drip ratio may be adjusted further via decentralized governance detailed below — for now, take advantage of these boosted IOTX rewards by joining Burn-Drop!
Decentralized Governance of Burn-Drop
Burn-Drop tokenomics are designed to drive network growth (e.g., # of devices) via on-chain incentives for stakeholders. As the IoTeX Network continues to evolve, the design of Burn-Drop will need to be adjusted to include new growth metrics that are critical at each stage of our long-term journey. Burn-Drop v2 applies this philosophy by incentivizing community engagement with new ecosystem projects, which benefits both projects and stakeholders. In the future, growth metrics such as users, data, and transactions may be added to Burn-Drop with new incentives for stakeholders We want these decisions to be driven by our “true believer” Burn-Drop eligible stakers, which is why decentralized governance will be a core part of Burn-Drop going forward. Soon, Burn-Drop eligible stakers will have the opportunity to make proposals and drive discussion around the future of Burn-Drop putting power in the hands of the community.
Join Burn-Drop today — all you have to do is stake your IOTX for ≥91 days with stake-lock on! Reach out to us on Telegram with any questions.
Founded in 2017, IoTeX is an EVM-compatible blockchain platform to fuel the Internet of Trusted Things, an open ecosystem where humans and machines can interact with guaranteed trust and privacy. IoTeX envisions a future where everyday people can own and control their smart devices, as well as the data and value they generate. Backed by a global team of 30+ top research scientists and engineers, IoTeX combines blockchain, decentralized identity, and secure hardware to enable user-owned IoT devices and networks. By connecting the physical and digital worlds, IoTeX will empower the future machine economy and redefine the trillion-dollar IoT industry.