The New Radix Economics – a primer
Radix Economics Proposal v2
Radix is pleased to announce the release of the Radix Economics Proposal v2.
This economic paper lays out the Economics of the Radix token (XRD), a fixed supply token that grants anyone the ability to use the Radix Network.
Here are some highlights:
The total Radix Token (XRD) supply will be 12,000,000,000 XRD, all issued at genesis.
This should leave plenty of room to grow without the token becoming so expensive per unit that it can only be used by a few people/entities. We see the Radix token as a lightweight, instantly clearing, store of value can be used in transactions of any size.
Fees will be set in USD but paid in Radix Tokens. This will start at US$0.001 XRD equivalent. At the start this rate will be adjusted daily.
This allows companies and individuals to calculate the cost of using the Radix network at any time. This predictability helps those that rely on the Radix network to be comfortable deploying critical systems of any size and throughput on the Radix public network without having to worry about being put out of business by fee spikes.
50% of the transaction fee must either be donated to the Foundation or be burned. The other 50% goes to the Node Runners.
This provides both a security and a governance mechanism for the network. Security because it prevents fee recycling in spam attacks, and governance as each user has the choice to support the foundation or to choose not to. Provided the Foundation is acting in the best interests of the network, this will provide a sustainable, long term source of donations.
This mechanism also creates the basis for the deflation of the Radix Token over time.
Different unlocking periods for different allocations in the genesis atom.
We would like to align the incentives between all existing stakeholders of the network, as well as anyone that decides to buy the token at the time when it’s released. In order to do this, there is a different unlocking schedule for each.
These periods range from a year, unlocked pro-rata day-to-day, for the Genesis Community, to 7 years for the Radix Foundation. In the case of Radix DLT, the company where the team has its token allocation stored, it has a lockup period of 1 year and then 3 years of equal daily unlocking.
20% of the total supply of XRD will be locked (for the foreseeable future) for the Stable Coin Fund.
These funds will *only* be unlocked if there is a decision to deploy a decentralised stable coin. To make this stable coin truly decentralised, the protocol would rely on a Reserve of XRD as a market based stabilisation mechanism for a secondary token. This secondary token would be available for purchase directly from the protocol in exchange for XRD, which would be added to the Stable Coin Reserve.
If released, this would provide a path to the issuance of an asset-backed stable coin that doesn’t compromise on decentralisation for either itself or the XRD. However, the decision to release such a coin is not expected to be taken for at least the next few years, and if never taken, the Stable Coin Fund would be burnt to permanently remove it from supply.
Radix Tokens will be available to purchase from the Foundation supply in 2020.
Before the launch of the network, it will be possible to purchase tokens directly from the Foundation. These tokens will be subject to a 1 year daily unlocking schedule from launch of the Radix public network. If you would like to register to purchase these tokens, please sign up here:
Get involved in the conversation!
As always, we invite you to join our community to discuss any aspect of the Radix ecosystem:
You can also go to our developers’ knowledge base to discover how you can start building on top of the Radix protocol.
By Radix DLT