An Overview of the Radix Economy
Radix Economy is the foundation on which all transactions are executed. Without this, engagements on the network are as good as that on a dummy model: irrelevant. The success of Radix is premised on how favorable its economy is for all users hence the commitment of Radix’ team of designers and developers to the economy’s upgrade. Recently, Radix released a consensus white paper called Cerberus designed to alter the Sybil model for the Radix Foundation’s Public Network to Proof of Stake. As projected, this new model surpasses previous versions of the Radix Economic Model.
In blockchain concepts, Proof of Stake represents a value-based protection mechanism. This means that the higher the token’s value, the higher the number of tokens staked. in addition to this, the platform becomes more expensive to tackle. Why the change in Radix Economy? This is to accommodate all the necessary network security incentives.
Currently, the Radix Foundation’s Economic Model composes of tokens that are emitted intermittently. These tokens are the equivalent of a yearly inflation rate of 2.5% to the summation of the token supply. And how is this emission earned? Using Staking Nodes for the process of securing the nodes. This new model can inflate and deflate via emission when employed with Radix’ use-based fee burn. Irrespective of Proof of Stake, the Radix Economic model has an automatic mechanism that allows the public to control up to 67% in the first 140 days of the Public Network’s life.
With Cerberus, the groundwork for the design of a decentralized, scalable public network can be achieved by the Radix Foundation. However, there’s a limitation to how much of Cerberus’ features can be available in the first version of the Radix Public Network. Rather than have all Cerberus features enabled in the first version, the Network will be released in multiple stages.
The Radix Foundation’s novel consensus mechanism, Cerberus, is the Radix Foundation’s blueprint of how we plan to build a scalable, decentralized, public network that can support and connect billions of users. In this case, the first Network to be published is the Radix Public Network 1 or RPN-1 through an unsharded version. With this basic version, sharding will be implemented after the foundations of ensuing networks have been established. After testing the security model in RPN-1, sharding will then be executed in subsequent phases. While it can be argued that this method is a bit too traditional, it guarantees a much higher staged security testing and briefer timeline to the first release.
Let’s take a look at a few vital components of the new Radix Economy Model.
Proof of Stake Considerations
As we mentioned in this article, Proof of Stake is the process of unlocking Radix tokens by users so they can participate in consensus and earn Network Emission. After this, such users can pass down their stake to another Node Runner or run the Node Runner client. In Radix network, all Node Runners with Radix are referred to as Staking Nodes. Using this, transactions and subsequent on-ledger transactions can be enacted.
This is an essential requirement of all Network operations which need to change ledger state before submission. Some of these operations include token creation, conditional state creation, transaction, messaging, etc. After the Network operation has been submitted and approved, the transaction fee is burnt to forge a direct relationship that would be shared between the frequency of Network use and frequency of token burn.
This is the final stage of a brief bootstrapping period for security and for ensuring long term commitment of key parties. On implementation, these schedules are carried out by the Network.
1. Public: 1-year of daily unlocking (1/365 per day)
2. Radix Foundation: 1-year full lock followed by 6 years of daily unlocking (1/2190 per day)
3. Radix Team: 1-year full lock followed by 3 years of daily unlocking (1/1095 per day)
Radix Foundation plans to use four token distributions to achieve its goal of wide token distribution to the Public. These four tokens will be spread within four years. They are:
- Sale of 25% of the total initial supply before the launch of RPN-1.
- Sale of an additional 10% of the total initial supply within two years of launch.
- Sale of an additional 5% of total initial supply within three years of launch.
- Sale of an additional 2.5% of the total initial supply within four years of launch.
New Radix tokens created by the Network intermittently, which automatically pay this token to all Staking Nodes in the consensus. How are these tokens earned? Through valid Staking Nodes commensurate to the total amount of stake affixed to the node.
Unlocked regularly for a projection of 10 years for daily distribution, the Radix Network Subsidy is a 600m distribution of extra Radix token fee for Node Runners. What role does Network Subsidy play in the Foundation? It simply improves the performance of the Network, preventing Staking Nodes that meet or exceed specific requirements for responsiveness, computing power, and bandwidth.
As a branch of Radix, the Radix Foundation is non-profit, limited by guarantee, and registered in the United Kingdom to boost the Public Network and organize as well as supervise the ecosystem and the community at large. The Foundation holds executive power over three grants of tokens which possess their objective and unique unlocking schedule.
Radix’ foundation Grant is allotted to the Foundation to advance the Foundation’s objectives which would be guided by Network Governance and community engagements. Without the engagement and adoption of the community, this Network cannot survive. It explicitly requires a careful balance of interest, commitment, publicity by every possible means, and lots of hard work.