PLEASE SEE JUNE 19th UPDATE: https://medium.com/@invarch/tinkernet-tokenomics-update-7107447a5c8c
The InvArch Tinkernet is coming to Kusama & the community has been asking, “wen crowdloan?” The answer to this question is the same as the answer to the Ultimate Question of Life, the Universe, and Everything.
The answer is the 42nd slot auction on Kusama.
The 42nd auction will:
🗓️ Start on June 29th, 2022 (block #13305600)
🛑 End on July 6th, 2022 (block #13404600)
Please note the following updates to the Tinkernet ($TNKR) tokenomics announced on June 19th, 2022:
Overview of the updated $TNKR tokenomics
> Initial Supply: 11,700,000 $TNKR (10% Annual Inflation)
> KSM Hard cap: 20,000 $KSM (Previously: 15,000 $KSM)
- InvArch Network: 8% (Previously: 9%-25%)
- Private Funding: 5% (Previously: 6%-10%)
- Crowdloan Rewards: 0–15% (Previously: 0%-30%)
- Inducement Bonus: 0–10% (Previously: 0%-20%)
- Crowdloan Reserves: 10–35% (NEW Reservation)
- OCIF-SIPA Staking: 10% (NEW Allocation)
- Liquidity Support: 10% (NEW Allocation)
- Tinkernet Treasury: 20% (Previously: 15%-45%)
- Community Sale: 2% (Previously: 2%-3%)
- Ambassador Incentives: 5% (Previously: 2%-4%)
- XCA Incentives: 5% (Previously: 9%-10%)
Let’s explain what is going on here, what changed, & why these decisions were made by the team. In a nutshell, the Tinkernet needs to ensure a strong sense of decentralization but it also needs to ensure a strong value & framework to succeed as a service for innovators; more importantly, to effectively incentivize participants of IP Staking & empower users to kickstart their innovations.
These adjustments strike a fine balance between decentralization of the $TNKR supply, security of the network & its token holders, incentivizing crowdloan support, & rewarding developers & individuals who use the power of the Tinkernet.
Read the next section below for a deeper breakdown of this new token economic structure.
Initial Supply: 11,700,000 $TNKR
The network’s Tinker Token ($TNKR) will have an initial supply of 11.7m tokens. The Tinker supply will experience an annual inflation rate of 10%.
The reason for this inflation rate is to sustain the IP Staking mechanism of the On-Chain Innovation Funding (OCIF) protocol, which rewards owners of community-supported & staked IP Sets with network tokens to help kickstart the development of the innovations.
KSM Hard cap: 20,000 $KSM
The team recognizes that this rejects the 15,000 $KSM hard cap chosen by the community; however, due to the amount of the supply being administered through the crowdloan rewards mechanism, it is important to ensure that the hard cap is not achieved by too few participants.
In light of the market events since first choosing to launch the Tinkernet on Kusama, which consisted of an approximate 50% decline in the Kusama network’s market value since first announcing the Tinkernet, it is imperative for the future of the parachain to raise a higher amount of $KSM to more widely distribute the $TNKR token supply.
The team wishes to apologize but hopes that the reasons for this can be easily understood & agreed upon.
InvArch Network: 8%
A small portion of the $TNKR supply is being reserved for both the current team and for hiring incentives for future members of the InvArch team.
All tokens received this way will undergo a 1-year lock-up. Afterward, they will see 10% of their allocations unlocked, and the remaining 90% experience linear vesting by block over a 2-year duration. This is twice as long as the vesting period set for the community.
Private Funding: 5%
Following the winning of a Kusama parachain slot, a small portion of the $TNKR supply will be provided toward private backers to supplement the development & ecosystem costs of fully maintaining a second parachain.
Minimum contributions of $50,000 & maximum contributions of $100,000 will be accepted as the project raises $500,000 for the Tinkernet at a $10m valuation for the network.
All tokens received this way will undergo a 3-month lock-up. Afterward, they will see 10% of their allocations initially unlocked, and the remaining 90% experience linear vesting by block over an 18-month duration.
Crowdloan Rewards: 0–15%
Originally starting at 0%, this number will scale up to 15% as the $KSM hard cap is reached.
Due to the decline of the price of $KSM & still maintaining a low & achievable $KSM hard cap of 20,000 for the Tinkernet crowdloan, the maximum number of tokens going toward the crowdloan rewards allocation has been reduced from 30% down to 15%. This is to prevent the $TNKR supply from being farmed & held by too few individuals through the crowdloan process. To supplement this, 10% of the $TNKR supply will be reallocated toward a liquidity bootstrapping event!
All tokens received as crowdloan rewards will see 30% of their allocations initially unlocked, and the remaining 70% experience linear vesting by block over a 9-month duration.
Inducement Bonus: 0–10%
Originally starting at 0%, this number will scale up to 10% as the $KSM hard cap is reached. The Inducement bonus is designed to be two-thirds (2/3) the size of the total crowdloan rewards.
The inducement bonus is distributed proportionately depending on the total participation weight a contributor earned during the Tinkernet $KSM crowdloan. As more $KSM is contributed, earlier supporters get an exponentially increasing participation weight. A participant will get participation weight for each $KSM contributed. The amount of participation weight a participant’s $KSM earns will depend on both when the $KSM was contributed & how much $KSM is contributed in total.
All tokens received as inducement bonuses will see 30% of their allocations initially unlocked, and the remaining 70% experience linear vesting by block over a 9-month duration.
Crowdloan Reserves: 10–35%
Initially starting at a 35% allocation, the number of tokens allocated towards the future crowdloan reserves will decline down to 10% as the $KSM hard cap is closer to being reached.
During this time, three-fifths (3/5) of these reallocations are directed toward the crowdloan rewards, up to 15% of the $TNKR supply in total. In tandem, two-fifths (2/5) of these reallocations are directed toward the inducement bonus, up to 10% of the $TNKR supply in total.
In total, this is up to 25% of the total $TNKR supply being released through the network’s first Kusama crowdloan & slot auction.
OCIF-SIPA Staking: 10%
When On-Chain Innovation Funding (OCIF) goes live on the network, a portion of $TNKR tokens will be dedicated to fueling a scaled staking program powered by a Scaled Incentivized Proof of Attendance (SIPA) protocol.
Liquidity Support: 10%
Before pursuing any listings on any centralized exchanges, the Tinkernet will first seek to establish a market for the community using decentralized exchange services native to the Kusama Ecosystem.
The team will first seek to host a community bootstrapping event on either Karura or Mangata Finance. After the bootstrapping of the token ($TNKR/$KSM), the team will then look to provide liquidity pools on available & practical decentralized exchanges in the Kusama ecosystem.
In combination with the 25% of the $TNKR supply allocated toward crowdloan rewards & the inducement bonus, this brings the total of community-held tokens within the first year of launch up to 35%.
Tinkernet Treasury: 20%
These funds are reserved for multiple network needs & growth incentives. The majority (X>50%) of the Tinkernet Treasury is intended for the InvArchitects Assemble program, which will incentivize developers to build on the Tinkernet & InvArch parachains.
Additionally, funds are reserved to supplement any ecosystem growth demands, needs, and community opportunities.
Funds administered through the InvArchitects Assemble Program will see 10% of their allocations initially unlocked, and the remaining 90% experience linear vesting by block over a 1-year duration.
Community Sale: 2%
A private community sale will be held for whitelisted community members. The community sale will only be accessible to InvArch Ambassadors, owners of an InvArch NFT banner, and owners of a Brainstorm Badge NFT (distributed to participants of the 1st & 2nd Brainstorm community workshop).
The community sale, known as the “Think Big” event, will experience a discount on the 2% of the $TNKR supply reserved for this event. The community will be notified five (5) days in advance of this event & must undergo KYC verification. This event will last up to three (3) days & participants will experience a cap of 0.2% (23,400) of the TNKR supply.
All tokens received through the community sale will see 30% of their allocations initially unlocked, and the remaining 70% experience linear vesting by block over a 1-year duration.
Ambassador Incentives: 5%
These funds are reserved as incentives & rewards for ambassadors in the InvArch Ambassador Program. These rewards are earned by participating in the InvArch Embassy & assisting in the grass-roots growth of the network.
A portion (20%) of these tokens will be retroactively awarded & airdropped for the previous contributions of past & current ambassadors. The remaining (80%) will be allocated as rewards for future ambassadors in the program.
All tokens received this way will see 10% of their allocations initially unlocked, and the remaining 90% experience linear vesting by block over a 1-year duration.
XCA Support Integrations: 5%
These tokens are reserved as incentives for communities from parachains & ecosystems that integrate XCA technologies into their network. This may include, but is not limited to, upgrading their runtimes with xcINV4 pallet(s) or successful proposals to bridge XCA with other ecosystems, or upgrading to enforce XCA enforcement at the protocol layer.
The Information below is outdated but kept for public transparency.
In brief summary, the crowdloan reward supply scales as more KSM is raised; however, a separate “Inducement Bonus” fund also increases its allocation in tandem with increasing KSM rewards.
The funds from the Inducement Bonus are then allocated to community members who participated in the Tinkernet KSM crowdloan. These rewards are distributed proportionately depending on the total participation weight a contributor earned during the Tinkernet KSM crowdloan.
How does a user earn participation weight? This is determined by the amount of KSM contributed & when the KSM was contributed. As more KSM is contributed, earlier supporters get an exponentially increasing participation weight. The chart below uses a hard cap of 25,000 KSM as an example and shows the increase of participation weight distributed as the number of KSM contributed increases as well.
A participant will get participation weight for each KSM contributed. The amount of participation weight a participant’s KSM earns will depend on both when the KSM was contributed & how much KSM is contributed in total. If you have any questions about this process or are otherwise unclear about this process, please reach out to the team on our official InvArch Discord server via the questions channel. We will be happy to answer any and all questions from the community!
The community can expect future announcements regarding crowdloan support from other ecosystem partners soon. In the meantime, start stacking up your KSM & get ready to fill your $TNKR bags 💰. The community will ultimately decide the fate & future success of the Tinkernet crowdloan, but the team is determined to make this one of the most rewarding crowdloan events that the Kusama ecosystem has ever seen!
Have a comment, question, or concern? Please reach out on our official InvArch Discord server via the questions channel. A member of the InvArch team (or a knowledgeable InvArch Ambassador) will be happy to answer any and all questions from the community!
Don’t forget, the Tinkernet Crowdloan will kick off on June 29th, as it makes its bid for the 42nd slot on Kusama. Stack that discounted $KSM while you can & get ready for an exciting event!
