$UMBRA Tokenomics
Token Distribution
Initial Supply: 100,000,000
Public ITO: 35%
Founding Team: 20%
Private Sale: 15%
Marketing: 15%
Umbrella Foundation: 10%
Community Rewards: 5%
Inflation and Rate of Distribution
Inflation is set to a maximum of 9.75%, with the maximum decreasing overtime.
The maximum vs actual inflation will vary based on the factors detailed below.
Proof of Stake mechanism is rewarded through inflation at 8% annually, decreasing by 10% per annum until it steadies around 2%.
The network DAO can vote to adjust inflation.
PoS tokens only mint if there are tokens actually staked. Hence if 100% of the network is not staked, then 8% will be calculated using the amount staked. This is a variable block reward rather than a fixed block reward.
1% of the PoS rewards are minted to reward the top smart contract owners on the network by volume. The purpose here is to gamify the ecosystem’s internal competition and give an additional incentive when early development may be unprofitable. Additionally, major smart contract owners are incentivized to lock up their profits in the network because it increases their potential allocation. We are a big believer in a strong developer ecosystem, and there’s no other network that has development rewards baked into its tokenomics like this.
0.75% of inflation is allocated to the Umbrella Foundation to grow the developer ecosystem surrounding Umbrella. This is an additional boost to help Umbrella get on its feet, this is planned to be temporary inflation. This inflation decreases by 10% year-over-year. This faucet can be turned off by the network DAO at any point.
Burn Mechanics
Per transaction burn to offset inflation following EIP 1559
Protocol DEX (KoinStreet) burns swap fees gathered from cross-protocol bridges and native swaps are partially burned. KoinStreet DEX charges a 0.1% protocol swap fee. 0.05% is burned.
Year 1 Example:
Inflation
Rewards for Securing Network (Staking in PoS)
If 50% of the network was staked out of a 100M initial supply (50M staked) inflation would be approximately 4M tokens in the first year.
Developer Rewards
Using the staking inflation as a basis a 1.75% multiplier*4M would print over the year equates to an additional 70,000 tokens minted. 40,000 would be split amongst the top 50 smart contract owners on the network. (Automated on network level) 30,000 would go to the Umbrella Foundation to fund developer ecosystem growth. (Manually voted on by the foundation members and distributed through Quadratic funding)
Burns
Per Tx Burn
Assuming a 10% per transaction fee burn, we can use the network fee of other Layer 1’s to come to a conservative $600 a day in aggregate fees collected by the network. Equating year 1 gas fees to ~$220,000. 10% of which would create a burning pressure of $22,000 which should equate to several thousand tokens.
Protocol DEX gathers swap fees from cross-protocol bridges and native swaps of which some revenue is burned. KoinStreet DEX charges a 0.1% protocol swap fee. 0.05% is burned. Assuming 50M in crosschain volume an addtional 50k tokens would be burned. Showing that the DEX side has a much larger potential to create burn pressure that can match the inflation rate.
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