An introduction to the V3 TFT development plan
The ThreeFold Grid 3.0 release is coming soon, with a more robust deployment system, a simplified billing model, and a fuller set of primitives to cover the expectations and use cases of cloud computing consumers. We have also been collaborating with several partners to bring substantial utilization onto the expanding capacity of the ThreeFold Grid. Along with these technological and ecosystem developments, a few updates are also being implemented for a more resilient token economy.
Avoiding unfounded hype strategies such as pump and dump schemes has always been important to the ThreeFold team. We prefer to build first, with a truly sustainable development plan for the peer-to-peer Internet and cloud economy we’re creating.
In this post, we will guide you through some of the latest tokenomics updates that will go live with Grid 3.0.
V3 TFT Tokenomics incentivize both supply and demand.
Since the ThreeFold Grid went live with its first version in 2019, the Proof-of-Capacity (PoC) algorithm was implemented to reward Farmers for providing Internet capacity to the ThreeFold Grid. Earlier this year, we announced our plans to introduce a second algorithm in our tokenomics to incentivize a decentralized and inclusive model for the sales of the ThreeFold Grid’s capacity - Proof-of-Utilization (PoU).
While Farmers can increase their yields by selling their capacity themselves, PoU incentivises solution providers and sales channels with a portion of the proceeds to support the demand for capacity on the ThreeFold Grid. Solution providers can be decentralized software providers or IoT networks that use ThreeFold as an infrastructure layer in their offering.
PoU is split amongst different actors involved in the sales process of the Internet capacity:
- 60% goes to solution providers and sales channels that bring utilization of the Internet capacity
- 25% of the TFT gets burned to maintain a scarce token economy. With significant usage, the burn can even lead to deflation.
- 10% of the proceeds is earned by the Farmers, and if Farmers are able to sell their capacity themselves, they are also eligible to earn the sales channel reward.
- 5% is awarded to the Threefold Foundation for the promotion and marketing of the ThreeFold Grid and its available solutions.
Learn more about ThreeFold Tokenomics here.
Farming V3 staking mechanism.
Under farming V3 (which will likely go live before Grid 3.0), tokens are staked for 2 years, or until 30% utilization is reached on the farmed capacity. This staking mechanism will allow the ecosystem to balance the expansion of the ThreeFold Grid and the supply of TFT that’s available to trade.
Ensuring scarcity in the Token Economy.
A maximum circulating supply of 4 Billion TFT was set with the launch of the ThreeFold Grid V2. A maximum supply in the token economy ensures the right incentivization for early adopters and ecosystem actors. With rising demand and a limited supply, token value naturally rises with the value of the ecosystem.
Earlier this year, we implemented a vesting mechanism which allows anyone to place their TFT into a pool on a voluntary basis. The tokens will gradually unlock over 48 months according to the development of TFT. As of today [Aug 23, 2021], only 283m TFT are liquid as of today, representing about 34% of current supply and 7% of the total supply.
Token Burning and its benefits.
Burning crypto tokens is a fairly common practice in blockchain ecosystems. The goal of token burning is to remove a certain quantity of a token from the circulating supply.
When utilization happens on the ThreeFold Grid, 25% of the TFT spent is burnt. Burning allows to continuously create a buffer in the token economy for the PoC to continuously reward current and future Farmers for expanding the ThreeFold Grid. Also, once utilization picks up significantly, burning should have an impact on the total circulating supply of TFT, allowing the token to appreciate in value.
Implementing a staking mechanism for utilization.
Staking is a way of earning rewards for holding tokens, which is common in many projects to support the growth of the ecosystem
With Grid 3.0 going live, the main objective of ThreeFold is to attract utilization. Therefore, we created a personal staking mechanism that provides token holders with discounts on the capacity they purchase.
The discount is expressed in relation to the number of months one commits to use the ThreeFold Grid, By staking TFT, users express their loyalty to the ecosystem, and by buying TFT upfront they become like co-investors in the growth of the ThreeFold Grid. The amount of TFT staked will define the discount level. It will be possible for anyone to leave the personal staking pool at any point of time.
For example: If 120,000 TFTs are staked and that 10,000 TFTs are used in 1 month, the total expected spending time is of 1 year and the discount will be of 40% (silver plan).
This plan has been carefully and strategically developed and we hope you see what we see… Now’s the time to buy TFT. If you need some help getting TFT on BSC, please see the forum post here. And as always, we’re here to help!
Also, find more information on future utilization here.