Published Mar 21, 2022
By Josh Goodbody, COO Qredo
Qredo Tokenomics Update
We’ve been listening to your feedback and concerns.
Our tokenomics model is complex and – not surprisingly, perhaps – there are some important features that have been overlooked. This includes the future release of new Custody Mining and Utility Mining rewards.
But, we’re also making some important changes to address the FUD:
We’re flattening the token release curve – nearly doubling the existing vesting periods for all Team and Investor vesting.
We’re introducing two new deflationary features to our tokenomics model: The ability to pay fees in QRDO (most of which will then be burned), and a new insurance fund that will initially take 100m QRDO out of circulation from the Reward Tokens pool.
Token burns: We will burn 40m QRDO imminently, followed by another 100m during the course of 2022. This will dramatically reduce the existing QRDO total supply by 140m through 2022 (14% of Total Initial Supply).
New Validator Program: Validators will be required to hold a Validator NFT and the validator staking amount will be sent to a burn contract.
It’s been six months since QRDO was first listed on an exchange. What a ride we’ve had since!
QRDO has seen over $5bn dollars of trading volume and been listed on over 25 exchanges. The Qredo Network has also flourished, seeing upwards of $7bn of assets secured, and top-tier partnerships with the likes of Metamask Institutional.
As you know, Qredo is a project on course for full decentralization, with the ultimate goal of being governed and operated by a DAO. All QRDO holders will then have a voice in the direction and path that Qredo takes.
Until we get there, we see it as our duty to listen hard to the feedback and input we receive from our much-valued token holders and community members.
We know there has been concern around our tokenomics and I will address this below. Included are some exciting new changes to the token inflation schedule.
The value of Qredo tokenomics (sometimes overlooked!)
It’s clear we could have done a better job at communicating the advantages of Qredo’s user-centric tokenomics model and the distribution of Reward Tokens over the next 50 years.
Here are three important aspects I want to emphasize:
Qredo’s tokenomics model incentivizes all participants on the network – not just validators, as the majority of other blockchains do. By rewarding usage in this way, we can grow faster and create an ever-increasing demand for QRDO that far outpaces inflation. Through this, we believe the Qredo Network can become one of the fastest growing blockchains in the market.
How will this work in practice? Qredo already offers crypto staking rewards but, in the future, will also provide some very tasty Custody Mining and Utility Mining rewards. These Reward Tokens (the second billion of QRDO tokens to be issued) will be used to reward all users who either hold their assets in Qredo Wallets (“Custody Mining”), or build on the Qredo Network (“Utility Mining”). Further rewards will also be available to those driving Qredo Network usage (which creates transaction fees, further driving QRDO demand).
Our tokenomics model has also been designed to incentivize large TradFi banks and asset managers to build on Qredo, making it their default crypto infrastructure. Exchanges will also be rewarded for integrating our Connected Wallets, allowing their users to trade directly on a centralized exchange – but with full self-custodial control of their assets. This future growth will skyrocket our TVL, and the fees the Qredo Network generates.
Are you starting to see the value of the Qredo tokenomics? We have in place a model that can drive future, long-term network growth – to the benefit of all QRDO holders. The best is yet to come!
Addressing the FUD
We know our tokenomics has been a major source of FUD for the community. I’m pleased to announce three new initiatives that address this in a meaningful way:
1. Flattening the Curve
To reflect our long-term vision, we are “flattening the curve” by nearly doubling the existing vesting periods for all Team and Investor vesting. This has been endorsed by the largest token holders, who are all in this for the long haul.
The distribution curve is now very flat and the July 2022 vesting event is significantly smaller. Our aim here is to eliminate all unnecessary FUD and create confidence that we have built a healthy and sustainable circulating supply model.
2. Let’s Get Deflationary
We’re introducing two new deflationary features to our tokenomics model:
We are dramatically increasing the utility of the Qredo Token by introducing the ability to pay fees with QRDO. The incentive to pay with QRDO is that it will unlock the lowest fees possible. We estimate that this will significantly boost QRDO demand. In addition, QRDO used to pay fees will be mostly burned (we’ll be sharing more details on this in the future).
We’re also setting-up an innovative captive insurance model! Think of it as Qredo’s own SAFU fund. We are planning to start with 100m QRDO from the Reward Tokens pool and lock them in a Qredo Insurance Fund. This QRDO will only be released in the case of a major insurance event, where our users need protection.
And, finally, one more thing…
3. Burn Baby, Burn! 🔥
As we have reached the equinox – spring for the northern hemisphere and autumn in the south – it’s time for a new beginning.
To show our commitment to building a deflationary tokenomics model, we will burn 40m QRDO imminently, followed by another 100m during the course of 2022. This will dramatically reduce the existing QRDO total supply by 140m through 2022 (14% of Total Initial Supply).
This deflationary burn also marks the inception of our Validator Programme. Participants in the Validator Program will not be required to have a minimum QRDO stake. Instead, they will hold a Qredo Validator NFT that represents staked and burned QRDO.
To be eligible to run a validator node, and mint this Validator NFT, the required QRDO validator stake will be sent to a burn contract.
We believe this is a powerful incentive for attracting the right validators, as a validator won’t be able to sell back onto the market their initial QRDO stake if they stop validating. They will only be able to transfer or sell the NFT to the next validator.
I hope this update has been useful and you’re as excited about our future path as we are.
Qredo is not a flash-in-the-pan project. Our tokenomics model, with its system of rewards and incentives, is designed to drive a long-term revolution in the way that digital assets are stored and managed.
Your feedback on the QRDO inflation schedule has been important to the team. We’re optimistic that the new deflationary measures will do much to address concerns.