🔄A Circular Economy
$PAID v2's New Circular Economy
The updated $PAID v2 token economics and additional token utility aims to establish a self-sustaining economic cycle, continuously generating value for the protocol as well as its users.
Dissimilar to most other protocols present, $PAID Ignition v2’s profits derived from its operations, including transaction fees and Community Fund returns, will be reinvested into the system, providing rewards to its devoted user base.
A Glimpse into the Past: Old Participation Mechanics
Let's take a moment to look back at where we started. It's been a wild ride full of challenges and triumphs, especially when it came to how you, our community, could jump in and grow with us.
We kicked things off with two main pools: Moon and Galaxy
Moon Pool: This was our way of making every token count. For every 1,000 tokens you staked, you snagged a lottery ticket, a chance to strike gold in our ecosystem.
Galaxy Pool: For the big players staking 75,000 x tokens or more, the Galaxy Pool was your ticket to guaranteed IDO allocations. It was our hat tip to your belief and commitment. In addition to 1 guaranteed allocation, users also received 1x lottery ticket for every 1000 $PAID staked.
Pool | Eligibility | Result |
Moon Pool | 1000 $PAID Tokens | 1x Lottery Ticket |
Galaxy Pool | 75000 $PAID Tokens | 1x guaranteed IDO allocation and 75x Lottery Tickets |
There were multiple staking options available for users from no time commitment to a 5 year stake with varying rewards such as increased APY and Moon ticket multipliers.
But as the industry evolves, so must we.
Recognising the need for a more inclusive and sustainable model, we've been hard at work crafting a new participation paradigm. Before we took a glimpse into the future, it was essential to appreciate our roots, to understand where we began and why change became not just desirable but essential.
The sources of value for $PAID are:
2% transaction tax on staking and unstaking activities.
Participation fees collected from crowdfunding activities. They are tentatively designed to collect 15% of your total investment amount only from crowdfund participants. The use of the collected participation fee will be used for $PAID token buybacks for burning, dual-sided liquidity provisioning, marketing and lastly, to fill the PAID Community Fund for future investments.
Example #1 - The Detailed Example of $PAID's New Circular Economy
The above diagram (Example #1) depicts the complete circular economy of Ignition v2.
Let’s break it down from the perspective of start-to-end money flow.
$PAID’s Circular Economy Explained: Examining The Money Flow Based On Example #1 Above
The $PAID team is supporting Project A’s fundraising activities with the intention to raise $1M USD.
Participants are NOT required to hold any $PAID tokens to participate in the fundraise. Instead, they will just need to pay a percentage-based service fee on their investment amount, similar to how you would when you go to a restaurant or any service-based organisation.
$PAID whales will have priority access via the Early Pool where they will get a head-start in participating in their own Early Pool as well as the Open Pool. The rest of the participants will participate in the Open Pool, on a first-come-first-serve (FCFS) format.
The participation fee collected from the participants are then split into four activities, aimed at decreasing $PAID’s circulating supply, providing additional utility to the $PAID token and providing value for $PAID token holders. The four activities are:
Token Burn: Aimed at decreasing $PAID’s circulating supply and will involve $PAID buybacks to help facilitate this activity, thereby improving $PAID’s price action.
Liquidity Provisioning: Having deep liquidity is a strong signal for any project, it allows more trade volume with less slippage and provides a more desirable environment for traders.
Community Growth & Marketing: To build a marketing treasury to help with $PAID’s business development activities and community building efforts. The larger the community grows, the greater the demand for $PAID will be.
$PAID Community Fund: The 2% transaction tax for staking and unstaking is used to fund our “Community Fund”. This will later be used to invest in early-stage projects (e.g. Seed / Pre-Seed) that would typically not be available to launchpads at all. The rewards of the Community Fund will be sold and converted to $PAID tokens and provided to $PAID stakers as incentives. The Community Fund is not only filled via the aforementioned participation fees but also the 2% on-chain tax applied to all staking related transactions.
Self-Sustaining Token Economic Model Via On-Chain Taxation
Platform-related interactions such as staking and unstaking will have a 2% fee that will be used to fill up the PAID Community Fund. These transaction fees will enable the platform to become more sustainable.
Real Yield APY With the shift to Ignition v2, $PAID will adopt Real Yield APY and no longer provide linear APY as it did in the past. The core reason for the transition can be summarised into two primary points:
Blockchain’s industry shift to more sustainable token economic models:
The blockchain industry is relatively young, and given its high innovation cycle, there are constantly new ideas & strategies to explore and employ. Thus, it is highly beneficial for companies operating within the space to constantly evaluate their approach against new approaches presented, to pave the best way forward.
Ever since the discovery of Real Yield Strategies & APY, we’ve seen several well-known protocols adopting it with immense success (e.g. GMX, SNX, IMX etc). Real Yield is not based on unsustainable token emissions, like other manipulative and outdated strategies.
Shifting towards a more sustainable future for $PAID:
The linear $PAID staking emissions previously established were unsustainable with the high APY (15% to 60%) causing significant token emissions. As such, this shift to more sustainable APY based on token revenue will increase the longevity of $PAID as an entity.
Commitment to providing real value: This shift puts the onus on us to ensure we deliver in providing real value to the users as we won’t be able to rely on ponzinomics or high APY.
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