Strategic evolution of tokens
#IOST is at a critical moment in transforming into a leading Layer 2 payment solution. This strategic shift urgently requires a comprehensive economic framework to support the grand vision for the future. The evolution of IOST tokenomics is driven by four fundamental market opportunities: Firstly, the demand for efficient, low-cost payment infrastructure in the Web3 space is experiencing explosive growth, with expected leaps in transaction volume in the future; Secondly, the trend of tokenization of real-world assets (RWA) has emerged, indicating a massive market with a value potential of hundreds of billions of dollars; Thirdly, the rise of decentralized physical infrastructure networks (DePIN) signifies a fundamental change in the financing, operation, and incentive mechanisms of real-world infrastructure; Lastly, as decentralized infrastructure services become widespread, economic incentives for node operators and infrastructure providers become critical, directly related to the reliability and scalability of the network.
The convergence of four major opportunities provides IOST with an unprecedented strategic innovation opportunity to establish itself as the cornerstone of Web3 payment infrastructure. IOST's outstanding technical strength is demonstrated by successfully processing over 930 million transactions with no downtime, giving it a unique advantage in connecting traditional payment systems with Web3 innovations. However, building this bridge requires a complex economic framework that meets the needs of modern financial infrastructure while maintaining the decentralized spirit of Web3 — this drives us to strategically evolve the IOST token economic model.
To seize the opportunities mentioned above, IOST officially launches a strategic token evolution plan, which includes the following key components:
1. Enhanced staking mechanisms: To incentivize long-term participation and infrastructure development, thereby supporting the secure and efficient expansion of the network, IOST introduces a sophisticated staking system. This system employs a dynamic doubling mechanism, rewarding not only based on the length of the staking period but also considering the amount staked, laying a solid foundation for the network's security and sustainable growth.
2. Community priority allocation: A new quota arrangement, where 97% of ecosystem growth reserves are used to empower community development, node operations, and ecological expansion, with the remaining 3% allocated for sustainable operations. This initiative reflects IOST's commitment to community-driven growth, ensuring that the results of network expansion directly benefit all participants.
3. Multiple value protection measures: To ensure the long-term value of tokens, IOST has implemented a series of mutually reinforcing token burn mechanisms, including transaction fee burns, miner extractable value (MEV) redistribution, and burns initiated by decentralized autonomous organizations (DAOs). The synergistic effect of these mechanisms will create natural deflationary pressures as network usage increases, providing strong support for token value.
4. Growth acceleration pool: The ecosystem growth reserves will focus on supporting the following key initiatives to accelerate network development:
Deployment and maintenance of PayPIN node infrastructure
Development and operation of cross-chain bridges
Geographical expansion into key emerging markets, initially entering the Latin American (LATAM) and Southeast Asian (SEA) markets
Integration of real assets (RWA) and merchant adoption plans
Developer grants and community incentives
DePIN infrastructure support and incentives
Development of Layer 2 sequencer networks
Security audits and system upgrades
IOST's economic framework is further enhanced through multi-layered value protection and growth strategies:
1. Sustainable scaling: This framework aims to support exponential growth in transaction volume while ensuring the stable operation of the economic system through carefully designed incentive mechanisms.
2. Infrastructure investment: A significant amount of resources will be allocated to build and maintain the robust infrastructure required to support a global payment network, including high-performance nodes, cross-chain bridges, and security systems.
3. Market expansion: Implement a series of strategic initiatives to expand IOST's influence in key markets, focusing on Web3 payment adoption and regions with high potential for tokenization of real-world assets (RWA).
4. Technological innovation: Continuous investment in cutting-edge technology to enhance core network capabilities, including Layer 2 scaling solutions, privacy protection technologies, and advanced security measures.
To support the continuous development of IOST and ultimately become the global leader in payment infrastructure while preserving long-term value for all stakeholders, the dynamic nature of IOST's token economics has undergone precise adjustments based on extensive market research and in-depth community feedback. This comprehensive strategy aims to ensure that as the ecosystem continues to grow, value can be effectively created and sustained through multiple mechanisms:
1. Transaction fee optimization: IOST adopts a dynamic fee structure aimed at precisely balancing network accessibility with value accumulation for token holders.
2. Staking rewards: Strengthened staking mechanisms aim to further encourage long-term participation and effectively enhance network security.
3. Burn mechanisms: Multiple token burn mechanisms will create natural deflationary pressures as network usage increases.
4. Value capture: Introduce innovative value capture mechanisms to efficiently capture and reasonably allocate the value generated in network activities, including miner extractable value (MEV) redistribution and fee sharing.
Through this series of comprehensive strategies, we can not only expand the network but also build a sustainable economic model to fully support the next generation of Web3 payments and create tangible value for the entire ecosystem. The strategic evolution of tokens fully reflects IOST's firm commitment to building a resilient, highly scalable network with long-term value.
This carefully designed economic framework lays a solid foundation for IOST to achieve its grand vision of becoming the leading Layer 2 payment solution while ensuring all stakeholders can achieve sustainable growth and long-term value retention. In the implementation process, we will always adhere to the principle of high transparency and actively encourage community participation to ensure that our development direction aligns closely with the fundamental interests of the entire IOST ecosystem.
New token economic model
IOST's new token economic model places sustainability, decentralization, and the vibrant development of the ecosystem at its core. A series of adjustments aim to build a fairer token distribution mechanism, effectively incentivizing long-term participation and ensuring that IOST's economic framework can effectively support ongoing technological innovation and community-driven growth.
Token distribution
To ensure the fair rights and active participation of all ecosystem stakeholders, the existing supply of IOST tokens will undergo strategic adjustments:
97% of newly issued tokens are for the community:
Staking rewards: Incentivize validators and node operators to ensure network security and promote long-term participation.
Ecosystem growth: Promote adoption, optimize technology, and develop the ecosystem through support for the ecosystem, building partnerships, and community airdrops.
Merchant incentives: Provide financial support for integrating IOST into payment systems, encouraging the promotion and expansion of real-world application scenarios.
3% reserved for operating costs and team expansion:
Funding for maintaining infrastructure and supporting the long-term vision of projects, ensuring that the core network remains strong, efficient, and secure.
Distribution of newly issued tokens
a) PayPIN node rewards (60%)
· Establish a robust network of validators
· Support ecological development
· Unlocking in installments over 60 months
b) Airdrops and staking airdrops (20%)
· Airdrops to existing IOST holders and ecosystem contributors
· Including liquidity mining programs
· Provide incentives for ecosystem development
· Unlocking in installments over 48 months
c) PayFi community incentives (8%)
· Support the development of PayFi applications
· Provide subsidies for merchant adoption
· Provide incubation funding for RWA, DePIN, and payment projects
· Marketing expenses · Unlocking in installments over 36 months
d) Community developer grants (5%)
· For infrastructure development
· Support for technological innovation and research
· Including security audit fees
· Develop developer tools
· Unlocking in installments over 36 months
e) Nexus DAO (4%)
· DAO operating funds
· Incentives for community governance
· Funding support for proposal execution
· Emergency reserves
· Unlocking in installments over 48 months
f) Team (3%)
· For recruiting team talent
· Realization of development goals
· Maintain the long-term effective operation of the team
· Incentivize continuous innovation
· Linear release within 36 months after a 12-month lock-up period
Token burn mechanisms — Enhance IOST value
Token burn mechanisms to enhance IOST value: To maintain network health and economic balance while introducing deflationary factors, we have implemented four interrelated token burn mechanisms:
1. Transaction fee burns
· Gas fees will be priced in IOST six months after the launch of IOST L2
· Some fees will be automatically burned
· On-chain governance will adjust the burn rate to ensure fair incentives and overall network health
2. Node MEV burns
· Profits obtained by some validators from MEV will be burned
· On-chain auctions ensure fairness and prevent unethical behavior
3. Ecosystem-based burn
· Ecosystem partners will integrate burn mechanisms into their business models
· IOST Ecosystem Fund supports partners to adopt this feature, reducing token supply as the ecosystem matures
4. DAO governance mechanism burn
· Community-driven proposals and votes will determine additional token burns
· Decentralized governance ensures community co-management of the long-term value of tokens
· Voting once per quarter
Token burn impact analysis
The combination of these four burn mechanisms is expected to bring significant deflation as network adoption grows. Based on our predictive metrics and market analysis:
1. Transaction fee burns
Expected daily transaction volume by the end of 2025: 12 million transactions/day
Estimated average transaction fee: $0.0025
Burn rate: 20% of transaction fees
Annual burn: $2.19M
2. MEV burns
Estimated MEV value: 1% of total transaction volume
Expected monthly transaction volume by Q4 2025: $200M
MEV burn rate: 30% of extracted value
Annual burn: $1.8M
3. Ecosystem expansion-based burn
RWA tokenization goal: Expected to exceed $0.5B by the second phase
Average fee rate for RWA transactions: 0.1%
Average number of transactions per token per year: 10 times
Burn rate: 15% of fees
Annual burn: approximately $1M
4. Governance mechanism burn
Based on network usage metrics
Conservative estimate: 0.5% of network fees
Annual burn impact: approximately $3M
Estimated total annual burn
Based on the provided data, the estimated total annual burn by the end of 2025 is approximately $8 million. This indicates that as the network grows and usage increases, significant deflationary effects will arise, and this effect will proportionally strengthen.
The design of the above token burn mechanisms aims to gradually release greater efficacy as network adoption continues to rise, thereby constructing a dynamic natural balance between the expansion of the ecosystem and the long-term maintenance of token value. To provide deeper background analysis, these burn rates are expected to effectively offset a significant portion of the newly issued tokens in the ecosystem growth reserves, which not only helps maintain the relative stability of token prices but also provides strong support for the continuous growth of the network.
It is noteworthy that the above estimates are based on conservative predictions of our preliminary goals. As network adoption and transaction volume increase, the actual burning impact may significantly increase. The dynamic nature of these mechanisms ensures that increased network usage will automatically lead to more token burns, thereby forming a sustainable economic model that adapts to ecosystem growth.
Long-term stable unlocking plan
Long-term stable unlocking plan: Structured unlocking plans ensure predictable, gradual release of tokens:
Gradual unlocking: Prevent over-supply, stabilize the market over time
Ecosystem funds and developer grants: For innovation and collaboration, unlocking quarterly over a phased period of 3 to 5 years
Staking rewards: Provide continuous rewards for validators and node operators to ensure network participation and security
Team and early supporters: Long-term unlocking plans closely tie their interests to the long-term success of the network
Detailed unlocking period
Long-term impact
Our core goal is to lay a solid foundation for long-term development, ensuring that all participants in the ecosystem can obtain meaningful and sustainable value. To achieve this strategic goal, we remain focused on laying out beyond short-term gains. For instance, we have introduced structured token burn mechanisms to effectively protect the long-term value of tokens; implemented predictable unlocking plans to encourage responsible ecological growth; optimized incentive mechanisms to ensure that every stakeholder (whether developer, user, or investor) can share the benefits as the network matures.
By creating a community-driven, highly scalable ecosystem, supported by sustainable technological innovation and the core principles of decentralized finance (DeFi), we strive to maintain industry relevance amid emerging trends and lead the broader Web3 ecosystem development trend. In short, every initiative undertaken by IOST is deeply rooted in a firm belief: that truly transformative impacts will gradually emerge over time.
Looking ahead: An evolving ecosystem and new PayFi and DePIN
Adjustments to IOST token economics lay a solid foundation for building a more resilient, community-centered, and value-driven ecosystem. By prioritizing sustainable incentive mechanisms and prudent deflationary strategies, we are committed to creating an environment conducive to collective innovation and growth, thus enhancing market confidence and naturally accumulating long-term value.
As we continue to iterate and improve the platform, we are pleased to announce that the 【Node Sale】 plan will be launched soon. This initiative will effectively enhance network participation and ecological development opportunities. We will continue to build a stronger and more inclusive ecosystem for every participant, so please stay tuned for more information!
