Question: “Wen Tokenomics?”
We are pleased to announce the SNOW (ICZ) Tokenomics plan. SNOW crowdloan supporters will be able to contribute $KSM and receive the native SNOW parachain token ICZ as a reward shortly after the SNOW parachain goes live. Let’s break down the ICZ token’s utility and allocation.
ICZ is the native token for SNOW network with multiple functions in the ecosystem.
- Transaction Fees: Powers micro gas fees and smart contract execution
- Node Incentivisation: Incentivizes network nodes to monitor and relay messages to Kusama.
- Governance: Empowers the community to vote, elect council members, and drive the development of SNOW.
- Bridged Staking: When a user locks up ICZ in staking, they may choose to lock up an additional amount of ICX to ’boost’ their stake.
The total supply of ICZ will be 2.66B, with token allocations that can be derived into 4 categories:
- ICX Holders (ICON Airdrop)
- Crowdloan Rewards
- Community Incentives (Retention Rewards, Liquidity Incentives and Developer Incentives)
- Future Reserves
ICX Holders (ICON Airdrop)
SNOW represents the first ever L1 extension layer parachain, serving as the dApp layer for the ICON blockchain. It is also the first BTP-optimized and EVM compatible parachain. Through BTP, SNOW will connect Kusama to an interoperability network that includes ICON, Binance Smart Chain, NEAR, Harmony and more. ICON holders will receive an immediate airdrop representing 35% of the ICZ supply. This will provide significant liquidity and active users for SNOW’s first dApps and platforms. ICZ tokens will be available to claim by eligible wallets after the launch of the SNOW network.
A crowdloan is an essential component for generating a successful bid in the parachain auction. To win a parachain slot auction on the Kusama Relay Chain, projects must offer to lock up large amounts of Kusama (KSM) tokens for the duration of their parachain lease.
Crowdloans allow community members to stake their KSM or DOT tokens in support of a parachain’s auction bid. In return, supporters receive a variety of bonuses and incentives once the slot is secured. The ICZ crowdloan allocation will account for 5% of the total supply.
- Crowdloan supporters will receive a base reward of 4,000 ICZ per delegated $KSM. Early supporters can receive up to 4,000 extra ICZ per delegated $KSM (this early bird reward decreases linearly with cumulative $KSM raised).
- Referrals will also yield a double bonus 5% - 5% extra awarded to referrer and 5% extra awarded to referee. To access the referral code, connect your wallet and click the referral button at the top of the crowdloan page.
Please note that all ongoing reward allocations will stop as soon as SNOW secures a parachain slot. Any $KSM tokens that are contributed after the SNOW parachain slot is secured, will not be eligible for SNOW token rewards.
A large part of SNOW token supply (50%) will be allocated towards the community incentives treasury. This treasury is designed to heavily favor and reward crowd loan supporters and community members who actively stake or provide liquidity on SNOW. The three main aspects of the treasury are:
- Retention Rewards (20% of SNOW token supply): Users that stake their ICZ tokens will qualify for the early staker incentive. This is released to users over a set period, as an additional bonus for staking.
- Liquidity Incentives (15% of SNOW token supply): Incentive fund to encourage liquidity pools and emergent DeFi applications in the SNOW ecosystem. These funds will be released to users who lock ICZ and other assets in liquidity pools, or similar DeFi applications.
- Developer Incentives (15% of SNOW token supply): This pool of funds is used to incentivize the growth of the ICZ developer ecosystem, tools and dApps across all application domains.
Finally, 10% of the token supply will be saved for future parachain slot renewal auctions.
The SNOW team will not receive any token allocation. Instead they will prove the value of the SNOW parachain and receive allocation from the initial issuance of tokens for SNOW’s sister Polkadot Parachain, ICE ($ICY).
Inflation & Fees
The token supply will have 5% inflation annually. This inflation will be split between the following recipients:
- Growth Fund
Users will pay transaction fees to submit transactions, with 80% being burned and 20% sent to the Growth fund.
A Growth fund will be created from inflation and fees to ensure the network’s long term position on the polkadot/kusama blockchain. Initially, the Growth fund will hold extra ICZ tokens, which will be converted to stablecoins to award as grants for ecosystem growth projects.
Staking and ICX Interactions
When a user locks up governance tokens, they may choose to lock up an additional amount of ICX to ’boost’ their stake. The final equation for the boost will be released at a later date. The return on the locked ICX, which will be payed in ICZ, will have to start out greater than the return earned from simply staking ICX on ICON. To determine that return will require a stable market price for ICZ which may take a month or longer to settle after launch. Before that time the return will be determined solely on the amount of staked and delegated ICZ.
We are excited to share this tokenomic roadmap with you. Hopefully it provides clarity on the distribution of ICZ tokens and demonstrates the versatility of the token and network. SNOW represents a landmark milestone for the DOTSAMA ecosystem, offering a gateway to a fully on-chain and generalizable interoperability network. SNOW’s ability to extend the security of XCM to external blockchains makes DOTSAMA the only blockchain ecosystem to have interoperability and ‘outeroperability’. As holders of the ICZ token, you will help shape the future of the project through the token’s governance utility. Join us in our calling to connect all blockchains.