Tokenomics
The Root Network (TRN) has unique features that differentiate its tokenomics from other blockchains. Specifically: The Root Network is an any-token gas blockchain to simplify user onboarding. Currently, users can transact in XRP, ROOT, ASTO, and SYLO. More approved tokens will be available in future. As a result, no single token is used for gas and network fees.
A high-level overview
- Gas and network fees accumulate during the reward cycle (90 days).
- These fees are transferred into The Vortex at the end of the cycle, and Vortex tokens are minted to reward participants based on their participation level.
- Participation level is based on two things:
- (a) The amount and duration of ROOT staked, and
- (b) The work done as a validator, measured in Work points.
- Vortex tokens can be unwound anytime, releasing the underlying tokens in The Vortex to the holder.
Please note tokenomics for The Root Network are subject to change in future.
ROOT Token Economy
The ROOT token economy is driven by several key use cases:
Governance of The Root Network Protocol
ROOT is the network governance token. It will control core features like software upgrades, runtime upgrades and new runtime deployments, the block reward economy, and admitting new application chains who wish to use The Root Network hub.
Proof-of-Stake for Network Security
ROOT is also the network token used by node validators and delegators to secure the Proof-of-Stake network. Validators or delegators who stake ROOT will earn fees from various network activities to ensure there is sufficient incentive to operate a node and stake. The block rewards for staking will come in several forms.
- GAS spent in the network is distributed to block producers; the default GAS token.
- XRP provides validators with instant real value for producing blocks.
- Initial bootstrap pool: 10% of the ROOT tokens will be distributed to block validators and stakers over the first 260 weeks.
- Fees generated by the various network runtime activities.
Including:
- NFT trading fees from the Non Fungible Asset runtime.
- Token minting fees in the Fungible Asset runtime
- Trading fees for the DEX and the GAS Fee Exchange.
Futureverse Utility and Game Economy
ROOT is the primary in-game token for the Futureverse game ecosystem and can be used for a range of things such as, but not limited to:
- Land reward mechanics
- Game rewards
- Stake to earn content
- Charging up in game items
- Breeding
- New content purchases
- Stake to play
Data Marketplace
ROOT can be used to incentivize individual and community-owned-and-controlled data sharing with third parties, via the Token Service platform.
As it’s a fungible token in its own right, ROOT can, of course, be used for any other type of utility. Developers can leverage the liquidity and community of ROOT to bootstrap their own activities and games. The nature of the multi-token economy means that the ROOT holder community can get access to these tokens via staking in the network.
How are tokens distributed?
The ROOT token supply is 12,000,000,000 tokens and will be distributed in several pools.
Community Rewards - 20%
Each month, ecosystem challenges will be set on The Root Network, each with a number of rewards available. The total number of rewards per player will be determined by their FutureScore. The FutureScore is driven using FuturePass technology and will be calculated based on things like the type of assets you hold, the number of collectibles you hold, how long you have held them, the rarity of those assets, the activities those assets have been involved with, along with other contributions players have made to growing the ecosystem, such as social media activity. The score is dynamic, will evolve over time, and will be influenced based on your participation.
Land Mechanics – 20%
20% of the tokens will be allocated to game mechanics within The Third Kingdom. The upcoming Third Kingdom whitepaper will release more details on how this will work.
Ecosystem Development Fund – 10%
10% of the tokens will be allocated to encourage new developers, artists and IP rights holders to build on the network.
Block Reward Bootstrap - 10%
Validators and stakers will receive up to 10% of the tokens over 260 weeks as a bootstrap, while the token fee economy gets up to speed.
CENNZ Burn to Mine - 10%
Many of The Root Network’s runtimes and technology have come from our collaboration with the CENNZnet team. We are rewarding CENNZ token holders with the ability to burn their CENNZ tokens into The Root Network and over time to receive: 1 ROOT for each CENNZ 1:1.
Futureverse – 15%
As the core developer, the Futureverse company will hold 15% of the tokens. They will be locked for 100 weeks then vested for a further 100 weeks.
Liquidity providers - 5%
Providers of liquidity will be eligible for up to 5% of the tokens.
DAO treasury 5%
The Treasury will manage a further 5% of tokens (among other tokens retained within the Treasury). These tokens will be locked for 50 weeks. The DAO will control their allocation.
Advisors - 5%
Our core advisors and those who have brought significant IP to the network will receive 5% of the tokens. They will be locked for 100 weeks, then vested over 100 weeks.
How are rewards distributed?
All rewards on The Root Network are distributed as Vortex tokens. Vortex tokens are tokens that can be unwound to release a corresponding percentage of tokens that are in The Vortex.
There are two types of rewards that contribute to The Vortex each reward cycle; Bootstrap Rewards and gas and network fees.
- Bootstrap rewards
- As outlined in the Futureverse whitepaper, Bootstrap rewards account for 10% of the total supply of ROOT tokens over 260 weeks to early backers and supporters.
- This is distributed based on staked ROOT tokens by duration in the reward cycle.
- At the end of the reward cycle, we calculate the Bootstrap Reward for each participant type, transfer it into the Vortex, mint Vortex tokens, and distribute it to participants.
- Rewards from gas and network fees
- This reward pool is based on gas and network fees collected. At the end of the reward cycle, these fees are used to mint Vortex tokens to reward participants.
- 30% of these Vortex tokens are distributed to stakers, nominators and validators based on their staked ROOT amount and duration staked relative to the total ROOT staked and duration by all participants.
- The remaining 70% are distributed to validators and nominators based on their proportional Work points earned throughout the reward cycle.
How are the Vortex token mints calculated?
At the end of each reward cycle, the protocol determines the value of the tokens being added to the Vortex. It also divides the value of The Vortex itself by the number of Vortex Tokens in circulation. These numbers are used to calculate the amount of new Vortex tokens to mint and distribute as rewards to participants.
What are Work points? And how do they work?
- Work points are earned by validators for doing work to complete blocks and transactions on the network.
- As a nominator, you earn a percentage commission of Work points your selected validators earn.
- At the end of each Era (24 hours), you will see an estimate of your Work points on the staking dashboard.
- If you are a staker only (i.e., did not nominate a validator), you do not earn any Work points.
- Work points do not directly translate to Vortex tokens. See above for how reward distribution is calculated.
How to Stake or Nominate?
You require ROOT tokens in your FuturePass to participate in staking or nominating. To bridge your ERC20 ROOT from an EOA account to your FuturePass address (e.g 0xffff) see, section Ethereum Bridge.
- Go to the staking site: staking.therootnetwork.com.
- Click Start Staking.
- Sign into your FuturePass, your available ROOT balance is on the staking dashboard in the top right corner.
- Click Stake ROOT.
- Enter the amount you want to stake.
- If nominating, select one or more validators. Or select ‘Skip nomination’ to only stake.
- Confirm your choices and sign the transaction.
Your ROOT is now staked.