Tokenomics
Last updated
Last updated
The updated Layer One X tokenomics are designed to support a growth phase for on-chain transactions, node hosting, and community adoption to build over the early stages of the release of this innovative technology.
Layer One X delivers technology to the market never experienced before. Layer One X's X-talk cross-chain tech connects both EVM and Non-EVM chains and with the ability to connect any public, private or Hybrid chains. Smart contracts both EVM and Non-EVM are able to communicate cross-chain with each other to create a highly evolved developer and user experience.
With the introduction of any new technology to an industry there is always an adoption phase that takes place. A typical adoption model is outlined below.
Stages of the adoption phase:
The adoption model suggests five stages:
Innovators: Early adopters with high-tech awareness and risk tolerance who experiment with the new technology first.
Early adopters: Influential individuals who validate the technology's value and encourage others to follow.
Early majority: Pragmatic individuals who adopt the technology after seeing its benefits proven by early adopters.
Late majority: Skeptical individuals who adopt only after widespread adoption and social pressure.
Laggards: Resistant individuals who adopt only when forced by circumstances or complete obsolescence of their existing methods.
Updating the token release model for the L1X Coin emissions to suit this adoption model allows for these stages to take place alongside a progressive release of L1X Coins into the market.
Token distribution is a key component of any blockchain tokenomics. L1X takes a structured approach, using distinct pools to fuel growth and adoption through balanced incentives, rewards, and community engagement.
The Hard Cap is a fundamental aspect of any token's economic model as it sets a maximum limit on the total supply of tokens that can ever be created. For L1X, the proposed Hard Cap is set at 1 billion tokens, a figure in line with prevailing market norms. To put this into perspective, a substantial number of the top 100 cryptocurrencies by market capitalization also maintain fixed Hard Caps, typically ranging from 100 million to 10 billion tokens.
Vesting of the L1X Coins is used to maintain the project's overall integrity while managing the technology's adoption phase. The diagram below outlines the updates to the tokenomics from the previous model to the new model to achieve a smoother transition of community adoption of Layer One X technology.
Graded vesting as opposed to Linear vesting for team and L1X coin holders allows for a scaled release of the L1X Coin, where the amount emitted each month grows as the vesting period matures. For the details of the graded vesting schedules see the diagram below.
With TGE projected for April 2024, the new token release model of all pools over the first 24 months from TGE adds a more effective structure for Layer One X protocol and technology utilisation to grow through the adoption phase.
The visual representation of this is highlighted below where the new token release schedule over the first 24 months is compared with the previous model
The L1X team's dedication to rolling out a token distribution model to support building a sustainable ecosystem that supports adoption is evident in the revised release schedule for the Team Pool. This transparency is reflected in two additions to the Team Pool: the introduction of a 6-month initial cliff on Team token release, and graded vesting introduced with a vesting period of 24 months.
The visual representation of this commitment by the team is displayed below, by comparing the token release schedule of the new Team Pool model to the previous Team Pool model.
The below diagram shows the release schedule of the total supply of L1X Coins.
The previous token release schedule below shows a difference in the token emissions in the important early adoption stage from TGE. The new token release model above shows a lower initial circulating supply with reduced emissions in the early stages to support the adoption model stages explained previously.
The L1X coin boasts multiple use cases that drive its value and utility within the ecosystem. These include:
1. Means of Payment: L1X facilitates seamless transactions, allowing users to acquire goods and services on- or off-chain by exchanging tokens or coins
2. Staking: Participants can stake or lock up L1X Coins to obtain benefits and rewards, or access specific services on the blockchain.
3. Governance: Coin holders will be able to actively engage in the governance process, shaping the future of L1X through their voting rights.
L1X has utilized three methods to model its economic activity:
1. Resource Allocation (RAM and CPU/NET)
2. Enterprise Licensing
3. Decentralized Application Economic Activity
To incentivise active participation and promoting the utility of the L1X Coin, most transaction fees (estimated at 1 cent per transaction) are distributed to full nodes and validator nodes. This strategic distribution rewards their integral roles in maintaining the network's security and efficiency. As a result, the L1X Coin gains inherent utility value, making it a desirable asset within the ecosystem. Additionally, 25% of the transaction fees are allocated to the L1X Foundation, thereby operating as a powerful deflationary mechanism for the coin.
These funds can then be utilized for protocol development, enhancing the platform's capabilities, or burnt/locked to reduce the overall coin supply. This deflationary measure further contributes to the potential appreciation of the L1X Coin’s value and ensures its long-term stability within the ever-evolving blockchain landscape.
Layer One X technology pushes the boundary of blockchain innovation, with a robust Tokenomics model carefully designed in collaboration with Prysm Group and a steadfast commitment to responsible growth. As you consider becoming part of the L1X community, have confidence in the knowledge that your participation is an opportunity to be part of an ecosystem that is set to revolutionize the way we all interact with blockchain technology.
