As of 10/22/2020, the Tokenomics in this paper are obsolete. To date — and aside from 28k STRONG in early August — no team or shareholder tokens have been unlocked or sold. 400k STRONG were moved from team and shareholder wallets and used to vote for proposals on V1 governance to prepare for the transition to V2. They will be sent back to their respective wallets when the proposal is accomplished. A replacement Tokenomics paper is being prepared for V2 that will include deflation and other measures as described in the DeFi V2 posts.
StrongBlock is pleased to present the details of how STRONG will be allocated. Once the protocol has launched, changes to it will come from holders of STRONG.
The blockchain community depends on crucial resources, mainly full nodes, that perform valuable work yet are unpaid. This represents a common risk to all parties. A movement is on to address this risk. StrongBlock believes that all governed, decentralized protocols must reward nodes like these. This is the future of DeFi. We are honored to be leaders in this movement.
Token Overview (see details in “STRONG Distribution” section)
Token Contract Address: https://etherscan.io/address/0x990f341946a3fdb507ae7e52d17851b87168017c
Max supply: 10,000,000 STRONG
Maximum Initial Circulating Supply: 1,616,115 STRONG
Inflation possible? No. STRONG has no Admin key, is hard-capped, and has no minting capability. Minting would be for a companion token. (A previous version of this article was incorrect.)
Deflation possible? No
Since its founding in 2018 by blockchain pioneers, StrongBlock’s mission has been to make it easy to add secure, decentralized blockchains to any use case. Our Blockchain-as-a-Service (BaaS) platform went through a year of MVP, Alpha and Beta versions. It reached a major milestone in February, 2020, when we launched the production version of the platform.
Blockchain usage has been held back by centralization issues. StrongBlock’s BaaS solved this by building working pools of third-party paid nodes for its private and public blockchains to create trusted, truly decentralized networks.
Decentralized networks need governance that works. StrongBlock is a leader in blockchain governance. We have been public boosters for it since our founding. Our Chief Governance Officer, Thomas Cox, is the chair of the IEEE-SA Blockchain Governance standards group, P2145. David Moss, our CEO, has spoken widely on the need for blockchain governance.
Over the past two years, we’ve studied the thousands of private blockchains we’ve helped launch. We have found that well conceived governance systems — coupled with node reward methods — dramatically increase blockchain participation, adoption and decentralization.
The core of every blockchain consists of miners and nodes. To provide security and stability, dedicated individuals and teams apply wisdom, funds and hard work to create and run full nodes. Yet they are paid nothing by the blockchains they support. For example, the full nodes on the Ethereum blockchain are vital to its safe and secure workings. Yet those nodes go unpaid by the Ethereum ecosystem. Many unpaid nodes perform poorly or run older unpatched software. This poses a risk to all users.
We feel it is vital and urgent to address this problem. The right answer is a protocol that rewards Ethereum (and other) full nodes. Such a protocol demands decentralized governance. To serve this massive unmet need, StrongBlock shifted its focus away from BaaS early in 2020.
StrongBlock DeFi Protocol
The StrongBlock DeFi protocol is the first to give its miners the chance to help improve the quality of public blockchain nodes. And, the protocol rewards STRONG miners for their hard work and expertise. The rewards are in the form of the STRONG Governance Token — an ERC-20 token that runs on the Ethereum Network in a set of audited smart contracts.
Unlike many DeFi protocols, the StrongBlock DeFi protocol has no liquidity pools, borrowing or lending. Instead, mining rewards provide incentive for community support of the token.
The StrongBlock DeFi protocol is governed by its token holders. Holders of STRONG can use it to propose, vote upon, and alter many parts of the protocol. Multiple governance variables have been built into the protocol to allow changes by STRONG holders. StrongBlock will not be making large improvements to the protocol after launch. STRONG holders will be empowered and naturally spurred to improve the protocol.
Staking STRONG is required to take part in the governance methods of the StrongBlock DeFi protocol. Staking STRONG is also required for mining node rewards.
For more facts about the protocol, please refer to StrongBlock Defi Protocol.
STRONG will be allocated as follows. Our goal is to rapidly achieve protocol decentralization via widespread token distribution.
10,000,000 STRONG in total were minted at genesis. No more can be minted. Of these:
- 4,250,000 STRONG are locked for Community rewards to users who mine the protocol over a 4 year period (see schedule below).
- 2,419,615 STRONG are allocated to Shareholders of StrongBlock, creators of the StrongBlock DeFi protocol. Of this allocation, ⅓ will be unlocked upon DeFi Protocol Launch and circulated dependent on demand. (28,000 STRONG from this allocation was unlocked prior to launch and are circulating.) The remainder will be unlocked 1/24th per month over a 2 year period and circulated dependent on demand.
- 2,477,702 STRONG are allocated to Founders & Team, developers of the protocol, with ⅓ of their STRONG unlocked upon DeFi Protocol Launch and circulated dependent on demand. The remainder will be unlocked 1/24th per month over a 2 year period and circulated dependent on demand.
- 500,000 STRONG will be placed in a Future Community treasury for the creation of new Communities and Community types, and for enhancing governance. The distribution of these tokens will be debated and decided by the community via the governance contracts after the protocol launches.
- 352,683 STRONG are allocated to Future Team and shareholders.
- 0 STRONG will be retained or sold by StrongBlock
A maximum of 1,616,115 STRONG (16.16%) from Shareholders and Team will be unlocked at launch. However, Shareholders and Team will not receive custody of the tokens. As noted above, these STRONG will be circulated dependent on demand so that governance referenda can be proposed, debated, and voted upon by the community, and decentralization can be achieved.
Until the StrongBlock DeFi protocol launches, additional STRONG other than those already being circulated will not be publicly available.
The STRONG mining rewards schedule over four years is as follows:
STRONG holders may propose and vote for new mining rewards models. They can also vote for an additional rewards token (no inflation) prior to the end of year 4 to increase the duration of mining rewards. STRONG holders can also choose to distribute all or part of the Future Community reserve to rewards.
As part of the DeFi protocol launch, a Governance Module will be included with the capability for the community to propose, vote and track changes to the protocol.
Ethereum Community Node Rewards
At launch, the STRONG Ethereum Community will open node signup. Ethereum Full Node owners can fill out the application form on the StrongBlock site. In order to receive rewards, nodes must provide proof that they are mining STRONG.
Awards are shared between Miners and Nodes. At launch, the ratio of rewards shared will start at 100% to Miners, 0% to Nodes. This ratio will stay in place until enough nodes have applied and been qualified to begin mining. Once that occurs, a governance proposal can be made by STRONG holders to change the ratio to start Node mining rewards.
A future post will detail the steps to become a node and mine on the StrongBlock DeFi protocol.
STRONG enables decentralized governance of its community DeFi protocol. STRONG is not a fundraising device or investment opportunity.