Token Minting
Token Minting Overview
The ICNT minting process is carefully designed to ensure a controlled release of tokens over time, promoting the long-term sustainability of the network while incentivising key contributors like Hardware Providers (HPs), SLA Oracles, and nodes (Oracle Nodes and Delegated Staking NFTs).
Initial Supply and Minting Cap:
Initial Distribution: At launch, the ICN reward pool starts with an initial supply of 700 million ICNT.
Minting: Over the first five years, up to 300 million additional ICNT may be minted, depending on network needs and subject to governance approval. This minting is capped at 300 million tokens, but minting is subject to network requirements and may not reach the cap if not deemed necessary.
Minted Token Allocation: Newly minted tokens are allocated to support rewards for network participants, primarily through the Rewards Reserve, which funds incentives for HPs, SLA Oracles, and potentially subsidises Service Providers' access requirements. A portion of the minted tokens is also allocated to the Node Sale, ensuring nodes are incentivised during their maturation period.
Node Sale and Pro-Rated Allocation:
Node Sale Incentives: At month 0, 20% of the newly minted tokens are allocated to nodes to support their value and incentivise decentralisation. Over the first 48 months, this allocation decreases in proportion to the remaining unvested tokens of the Node Sale. This means that the percentage of newly minted tokens allocated to nodes gradually declines as their vesting progresses.
Pro-Rated Reduction Mechanism: As nodes mature, their share of newly minted tokens decreases in line with the vesting schedule. Initially starting at 20% in month 0, the percentage of minted tokens directed towards nodes decreases proportionally as their vesting progresses, ensuring that the allocation to nodes tapers off as their need for incentives reduces.
Rewards Reserve:
Starting Allocation: The Rewards Reserve initially receives 80% of minted tokens at month 0. This share gradually increases as the node allocation decreases over the four-year vesting period.
Dynamic Reallocation: The proportion of tokens minted into the Rewards Reserve grows as the allocation to nodes diminishes. By the time nodes are fully vested, the Rewards Reserve will receive the entirety of the minted tokens.
The Rewards Reserve funds incentives for HPs, SLA Oracles, and can be used to subsidise Service Providers' access contributions if needed, supporting the network's growth and stability.
Summary of Allocation Mechanism:
Month 0 Allocation: 80% of the minted tokens go to the Rewards Reserve, while 20% are allocated to nodes.
Proportional Reallocation: As nodes vest and mature, their allocation percentage decreases proportionally, with the Rewards Reserve receiving an increasing share.
Long-Term Sustainability: By year five, all minted tokens are allocated to the Rewards Reserve, creating a self-sustaining reward mechanism for network participants and ensuring stability as the network matures.
This token minting strategy ensures a balanced approach, rewarding early node participants while progressively moving towards a more stable and sustainable reward structure through the Rewards Reserve. This way, the incentives adapt as the network matures, supporting both early growth and long-term sustainability.
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