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4. Tokenomics.md

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4. Tokenomics

To keep the tokenomics simple and straightforward, the RAIR token is designed with only 2 primary functionalities.

  • Burn model: Burning RAIR tokens for a perpetual license NFT at graduated rates based on enterprise ARR.
  • Reward model: Performing onchain activities (Deploying and updating RAIR smart contracts) requires RAIR. Incentive systems to reward early adoption and compensate open source development via a points -> fungibles conversion process. Our factory deployment tools require the submission of RAIR tokens along with each onchain deployment to function.

Forking

While this can be forked and bypassed, choosing to pay the RAIR tokens funds open source development, and ensures the officially verified smart smarts are used. Only wallets with valid license NFTs can collect rewards. Finally, projects bypassing the token code are in violation of the terms of use of the open source licensing agreement.

Figure 1:

Workflow to register a license using the RAIR open token license model workflow

Deflationary Burning [4.1]

Burn RAIR tokens to receive a full open source license to software. RAIR will be burned and converted to a soul-bound NFT representation of the license that each entity can use as proof-of-license.

This creates a downward pressure on supply. Each NFT license created will be able to stake for network rewards in the future on an exponentially decreasing rewards rate.

Note: Each entity must apply to DAO to receive license NFT. DAO to determine which cohort category each licensee falls into.

Table 1:

Token licensing cost by cohort

Benchmark // Startup / SME / Corporate // Vendor/Public ARR // 0-10m / 10-20m / 20-100m // 100m+ or vendor Cost // ~300 USD / ~3,000 USD / ~30,000 USD / ~300,000 USD

Inflationary Rewards [4.2]

When onchain activities are performed, RAIR is required using a mandatory facet in our diamond deployment contracts. This RAIR accrues to a development fund to support ongoing open source development. DAO will oversee use of funds to reward developers, pay bug bounties, fund new proposals, and the like. A governance structure is in place to ensure funds are efficiently spent to maximize the value of the network.

An automated trade and execution bot will be deployed to recycle up to 1% of daily orderbook liquidity into Ethereum to accrue to a development fund. This ETH will be accrued by selling RAIR back into the open market, along with generating an inflationary reward.

Emissions Curve [4.2.1]

Each RAIR used onchain will generate new tokens sent 50% to the payer of the activity, and 50% to the development fund on an exponentially decreasing emissions curve.

Users will only be able to receive rewards to an address that has a staked RAIR license. E.g. RAIR must be burned into a soul bound NFT to accrue rewards.

Effectively this will create 3 periods of RAIR distribution.

  • An initial inflationary "mining" period where incentives are in place to generate more RAIR than it costs perform onchain activities
  • An equilibrium period where is effectively "free" to use onchain
  • And a final reduced rewards period where a terminal inflation rate takes over to incentivize ongoing development of the project at a sustainable level

Token Distribution [4.3]

RAIR was originally developed as a for-profit C-Corporation. Valueless grants of tokens will be airdropped to different cohorts that provided value to the project after a post TGE vesting period.

These groups include:

  • C Corp Equity Investors (XX%)
  • P1/P2 Token Investors (XX%)
  • Developers (XX%)
  • Advisors (XX%)
  • Founders (XX%)

Token Supply [4.4]

1,000,000,000 RAIR tokens will be generated at TGE.

  • P1 Tokens were valued at 15m initial fully diluted market cap (IFDM) in 2021
  • P2 Tokens were valued at 25m IFDM in 2022

2 tranches will be available at the 2024 token sale pre TGE via a liquidity bootstrapping protocol (LBP).

  • P3 Tokens 30m IFDM (1m USD equivalent)
  • P4 Tokens 35m IFDM (2.5m USD equivalent)

Initial inflationary rewards period will generate new RAIR at a rate of 2x per deployed onchain activity for the first 800,000,000 RAIR processed through the system. E.g. send 10 RAIR to deploy smart contract, receive 20 RAIR points from treasury. This will generate a final fully diluted marketcap (FFDM) of 1.8b RAIR. Reward mechanism is designed to balance token distribution between early adopters and later participants.

Points Accrual [4.5]

Once FFDM is achieved, a 1x "free" period will match RAIR deployment costs for the final 800,000,000 RAIR processed through the system.E.g. send 10 RAIR to deploy smart contract, receive 10 RAIR from treasury.

Finally, a terminal emissions rate of new RAIR will be determined by DAO governance not to exceed a 2% annual emissions rate once the 800m matching period is exhausted.E.g. send 10 RAIR to deploy smart contract, receive XX<10 RAIR from treasury. OR send 10 RAIR, treasury burns X RAIR, etc tbd by DAO.

During this period, RAIR tokens will be earned through various value accretive onchain activies. Prior to receiving fungible tokens, users will accrue nontransferable wallet locked "points".

At launch, there will be only 3 activities that count towards point accrual.

  • Minting NFT Licenses. RAIR points accrual for burning RAIR to mint licenses per ARR tranches listed in 4.1.1.
  • Deploying Smart Contracts. 10 RAIR per deployment.
  • Signing up for accounts by binding social logins. 10 RAIR per unique account.

DAO will decide further points accrual activities after FFDM.