Tangle Tokenomics: The Circular Economy of TNT
Tangle Tokenomics
The goal of Tangle's tokenomics is to reward and incentivize developers, operators, restakers, and stakeholders with a share of our decentralized cloud's success. Every participant is every bit as important for driving the success of our aspirational vision.
What sets decentralized clouds apart from centralized clouds is their ability to offer a verifiable infrastructure and a wider variety of product offerings, rewards/incentives, and transparent market driven pricing for services. With open source tools, we can break apart the inner workings of cloud infrastructures and allow all participants to find the place where the benefit the most.
It is worth stressing that Tangle's cloud infrastructure is focused on reusable and monetizable instances of software. Developers build Blueprints and customers instance these templates once, twice, and maybe thousands of times. The developers, operators, and restakers benefit from the cycle of innovation that leverages their work, compute, and assets for security.
How Do We Do It?
Our tokenomics obviously sets out to accomplish these goals, and our platform controls the incentives through a variety of democratically governed levers.
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The first main lever is how payments for instances are distributed. Customers who instance Blueprints pay the protocol first. This payment is then distributed and streamed to all the market participants; the developer, restakers, operators, and the protocol itself all earn their share. These split is configurable through governance and will continue to update over time as we grow to understand and scale this decentralized marketplace.
The second main lever is to reward restakers to deposit and lock their assets. Restakers will benefit from direct TNT rewards as well as points in future airdrops. They will be able to bridge and deposit different assets without paying a fee and immediately begin to earn TNT that they can use to transact more broadly on our EVM compatible chain.
The third main lever is to reward TNT holders. TNT functions in Tangle as the default transaction fee asset, the default restaking asset, and eventually a beneficial service payment asset that allows for subsidized service requests. This lever is a bit intricate. When a service distributes its tranche of payments to operators and restakers, we use a scoring mechanism to create a distribution for that service. This distribution tells us the relative weight of an individual restaker's contribution to the security of the service instance. We dollar denominate these contributions through onchain oracles with our partners and issue each dollar 1 score unit. Now for the intricate part: the protocol also controls how many score units 1 TNT earns. To begin with, 1 TNT earns 1 score value as well and can be governed to increase over time, rewarding TNT restakers with a higher share of rewards if the community deems this their intention.
The Incentive Loop
With the 3 main levers defined, it's clear that our goal is to incentivize more security and also reward TNT holders with a share of service revenue. We want to onboard enough TVL to support a wide variety of services and also create a loop that rewards stakeholders for restaking their rewards too, as this compounds their percentage of rewards over time.
