Dyme’s eponymous native token aligns incentives across all network participants, including network operators, users, and holders.
Dyme’s economic and incentive model (or tokenomic model) has been designed to work hand-in-glove with Dyme’s novel governance module, economically neutral architecture, and the Ignite consensus algorithm. The Dyme proof-of-stake system takes full advantage of the Ignite consensus algorithm and participates in the Cosmos Interchain. Dyme’s Commission Fee Mechanism delivers a competitive mechanism for broad, easy access to blockspace. The Dyme Validator Incentive Mechanism sets aside a substantial amount of DYME to subsidize commission fees in the network’s early epochs. Dyme’s novel governance module shifts governance to a democratic footing from the outset.
Dyme: The Reserve Cryptocurrency For Distributed Crypto Projects
The Dyme tokenomics are designed to align incentives across all network participants, including network operators (e.g., validators or those token holders who validate transactions), users, and token holders. Dyme’s tokenomics defines the initial path for the DYME token. Whether DYME is used for staking, for paying commission fees, as a source of native on-chain liquidity, as an underpinning for a Web 3 project token, or as a claim on future governance, the DYME token enables a distributed and decentralized network like Dyme to flourish and grow.
Thus, understanding key elements of the DYME token is important to the community. To that end, this article describes the token allocation structure contemplated for Dyme.
Dyme’s Token Allocation at Mainnet
The chart above contains an approximate description of the DYME token allocation at Mainnet launch.
Maximum Supply, Circulating Supply, and Market Capitalization
The total supply of Dyme is capped at 50,000,000,000 (i.e., fifty billion) DYME. Note that the Dyme crypto token is generally written with full capitalization, while the Dyme entity is written as a proper name.
A share of Dyme’s total supply will be liquid at mainnet launch, with the remaining tokens vesting over the coming years or distributed as future validator reward subsidies. Each DYME token is divisible up to many decimal places.
The supply cap is set in the genesis.json file of the blockchain. This file location is also where the maximum threshold of blocks per year parameter is set.
Dyme: Community First
We are excited to show that 60% of the total DYME is allocated to the Dyme community. Most of this allocation is managed by the Dyme Foundation, which is itself managed by the Dyme DAO.
Dyme Foundation
The Dyme Foundation will manage the Community (25.0% of total DYME) and Reserve (20.0% of total DYME) allocations. As a memberless foundation based in the Cayman Islands, the Dyme Foundation is governed by the Dyme community through Dyme’s novel governance module.
In Cosmos parlance, “smart contracts” and “modules” are equivalent enough to say that Dyme’s governance is run by smart contracts.
This means that Dymeians will directly and democratically control through on-chain proposal and voting the usage of these tokens, subject to the governance rules described in the code of Dyme’s novel governance module.
Validator Incentive Mechanism: Monetary Policy Meets Game Theory
Dyme’s Validator (15.0%) allocation is used to shift reward across time and compensate network operators (e.g., validators) for early adoption of Dyme. This will be managed by the core Dyme blockchain code, which we call Dyme’s Validator Incentive Mechanism.
The Validator allocation is skewed to provide favorable outcomes to early validators. This is both transparent and intentional. For the community to thrive, validators require incentives to join. Once the community is thriving, the sole incentive can be the commission fee.
In Cosmos parlance, the validator allocation is termed “inflation rate” in that it represents an increase to supply. The calculation uses the theoretical maximum block creation (the number of new blocks per year) which we previously described, and the inflation rate. Dyme intends to modulate the inflation rate over the lifespan of the validator allocation to provide the game theory-driven early adopter incentive described above.
The validator allocation is expected to run for 16 epochs (roughly 16 years) before running out. Over that period, the digital assets in the validator pool will be exhausted, and the community is reasonably expected to be both mature and thriving.
Big Buyers and Small Buyers
Dyme intends to buck the trend of crypto tokens being held by a centralized few. While finding a few venture capitalists to make bulk purchases is an attractive way to raise funds, Dyme believes that crypto projects require a broad audience of interested, engaged users.
In addition to impairing the independence of decentralized autonomous organizations, governance tokens in the hands of a few resemble an oligarchy much more than a democracy.
So Dyme’s token allocation sets an equal number of DYME for “big buyers” and “small buyers.” A small buyer can only acquire a small amount of DYME, perhaps 50,000, in their Dyme wallet. To promote a decentralized Dyme from launch, small buyers will receive a price advantage over big buyers.
Big buyers will not be capped on the amount they purchase, subject to the maximum allocation.
Allocated but unused DYME in these categories would be used for a subsequent public sale. We hope to find exchanges to manage this process, but a series of smart contracts can be written to complete the task.
Combined with the novel governance module intrinsic to Dyme, this process should put coins in the hands of many people. Dyme’s goal is to create a democratic blockchain for all stakeholders.
Dymeians Assemble!
We call our community members Dymeians.
We began our year with the launch of the Dyme website. Over the past months, we have made a number of major announcements. There is much more to come, and we are grateful to have you in the community of Dymeians. We are confident that the coming year will be a powerful one for cryptocurrency. Let’s make this next year the Year of Dyme together!
