Shyft Network — Token Distribution and Economics
Barbados, March 24, 2021 — The Shyft Network core team is proud to announce the details of its SHFT token economics and distribution schedules within the Shyft Network protocol.
The Shyft Network is a blockchain-based solution for centralized and decentralized technologies, like decentralized finance (DeFi). It’s a technology layer that aggregates and embeds trust into data stored on private and public ecosystems, enabling an opt-in compliance layer across all systems.
Shyft Network was designed as an interoperable standard for use cases that require multiparty trust and validation. We took a fundamentally different approach to data and identity and thanks to its founders’ long history with Bitcoin, dating back to 2010. The vision of Shyft Network was one that had a long-term view on the future of where our ecosystem was headed and what would be needed to protect decentralization and privacy while enabling new markets and users.
The Shyft Network enables identity verification, validation, and the sending of credentials and other data across multiple different blockchains and networks. It is a solution and compliance primitive to the entire decentralized ecosystem, with a focus on solving some of the largest global challenges around regulations, compliance, data privacy, and trust and coordination.
Balance and Decentralization
When designing the token economics and distribution schedules, we were careful to structure the various buckets/outflows to maximize our impact and collaborative structures across the ecosystem.
When designing this system, we took to heart the lessons that our ecosystem painfully learned over the last decade; one key goal is to provide distribution and allocation across use cases and community infrastructure enabling perpetual support and longevity to all functions that make networks successful across phases of their development. Resilience, adaptability and decentralization are guiding values of our work.
This economic structure was built and refined over the last 4 years and included the guidance and direction of our closest partners and advisors, whose capabilities complement the Shyft Network Core’s team, helping us make headway into our product focuses like compliance and identity. We are confident that this strategy will get us to product & community readiness, and puts the hard work into a system that allows the community to take over and continue to advance the ecosystem forward!
The Network distribution is largely programmatic through distribution contracts which are closely coupled with the inflation rate that is used to pay for federation network security, Byfrost Bridge node security, and Community DAO (Shyft Community Runtime Inflation). The distribution below spans over 10 years with distributions focused on ecosystem pillars and critical infrastructure to support long-term growth of network usage, and meet demand balances to ensure a verifiable and scalable liquidity base.
Name: Shyft Network
Type: Native Layer 1, ERC-20 token compatible
Initial Circulating supply on launch: 3,800,000
Circulating supply 12 months after launch: 507,432,184
Circulating supply 7.5 years after launch: 1,910,000,000
Node Inflation rate: set at 6% of the initial universe, released on a per-block basis, perpetually
The SHFT Token
SHFT fuels the Shyft Network; think of it as gas that powers the engine. SHFT is a means of payment, a mechanism for bonding value, and an instrument for governance value capture. SHFT, depending on the use case, can be utilized in a multitude of ways which includes a payment and authorization system for long-term validation.
SHFT is a layer 1 currency for identity and data transmission, as well as a governance mechanism for coordination across ecosystems that enables entity-to-entity governance, compliant asset creation, and a system for compliant Defi and other applications. Enabling a new side of the existing ecosystem could greatly expand the size of market participants and increase the size of asset participation across all decentralized projects, protocols, and marketplaces.
The Shyft token, when used across use cases created on Shyft Network, enables assets and metadata to be added into this compliant layer-2 smart contract system, acting as a wrapper for these asset types and a directory for all Dapps that support the ecosystem. The SHFT token on other chains acts as a layer two gas and currency to pay for the compatibility, composability, and routing channel architecture that is required to create, utilize, and transit compliant (rule based) assets across all 3rd party applications (ie. Dexs, lending pools, etc.). Shyft Network’s native token becomes useful as a bridged currency in liquidity pools through multiple infrastructure and cross-chain Defi deployments. You can read more on the SHFT token here.
The SHFT tokens are distributed into a number of tranches, designated for specific activities to benefit the network. These values and distributions are built into the core distribution contracts for automated deployment. You can view this as a form of pre-defined inflation across the network, spanning beyond 10 years.
Economic Metagame — 20%
As users participate in the Wrap Rewards context, there will be a deflationary reduction in the total universe corresponding to the proportion of total assets (E.g. USDT erc20 token) within the Wrap Rewards contract. 20% of the total initial universe is available to be burned over the first 2 years (if lower, will move to further years).
Ecosystem Development — 23.81%
Less than 30% of the Ecosystem Development allocation will be unlocked at launch, and additional tokens will only be released outside of the intended schedule by Shyft Network in the event of major partnerships that require usage and bonding of tokens (such as enterprise partnerships, VASP partnerships, government partnerships, etc.). Sub-allocations within the Ecosystem Development include:
- Next-Gen DEFI (Project Adaptability) — 6.06%
To allow for the Shyft Network project to encompass and adapt to updates in the ecosystem as a whole, an allocation has been provided to allow for the engineering/production of services and utilities for this purpose, beginning on month 39 in daily distributions over a 12-month period.
- Synthetic Asset Wrap Reward (Ecosystem) — 4.65%
Gives individuals a reward for holding other erc20-based assets on Ethereum within the Shyft Network smart contracts (e.g. Shyft-wrapped USDT), distributed in equal instalments over 10 years. Incentivizes participation in the total Shyft Network smart-contract stack e.g. allows for easy use of Trust Channels when regulations require/incentivize participation.
- VASP Ecosystem Initializer — 0.03%
For the purposes of establishing our VASP/travel rule-related products that interact/support the Shyft Network compliance-related software stack, a small allocation has been provided on months 2–4 to incentivize the business-related relationships that will bootstrap this process.
- Shyft Treasury — 2.76%
The Shyft Network will maintain a treasury composed of unallocated SHFT assets from advisors, partnerships, purchasers, et al. A portion of these assets may be distributed by way of decentralized consensus through community DAO-structures.
Our intention is to maintain these assets in the treasury until they can be allocated for their proper purposes, based on multi-year deployment schedules.
Public Distribution — 0.91%
For the whitelisted distribution through the Polkastarter platform.
Advisors — 5.68%
Our global network of advisors has been invaluable to the development of the Shyft Network ecosystem. Advisor tokens will be delivered for one month, beginning on month 13, and then following a 6-month pause, resuming distributions on month 20 in daily distributions over a 17-month period.
Ongoing Technical Partnerships — 5.47%
Shyft Network partners are core to the technical development of the infrastructure, and many have been working with the Shyft Network core team for the past 2 years. Partnership tokens will be delivered for one month, beginning on month 6, and then following a 6-month pause, resuming distributions on month 13 over a 23-month period.
Purchasers — 22.26%
Shyft Network’s purchases from network participants, industry leaders, and other users. The principal distribution will begin in month 12 over a 16-month period, with partial amounts starting in month 6 as described below.
Starting in month 6, purchasers may have a mandatory bonding requirement to initiate Shyft Network’s interoperability bridge layer. Bridge rewards may be provided from month 6 to the end of month 11, depending on technical milestones achieved.
Strategic Partnerships — 4.01%
This allocation includes recent participants, with a focus on expanding Shyft Network’s use cases relating to compliance & identity in the blockchain ecosystem. These partnerships comprise core development teams and entities who have and continue to build critical infrastructure to support native and cross-ecosystem infrastructure. Tokens will be released in daily distributions starting in month 4, over a 14-month period.
Core Team — 17.86%
The core Shyft Network team has demonstrated their commitment to the project by working relentlessly over the past almost 4 years. Team tokens will be delivered beginning on month 24 in daily distributions over a 12-month period.
Inflation & Runtime: Federated nodes, Runtime Inflation DAO’s & Byfrost
Shyft Runtime Inflation DAO’s — 2%: Perpetual Community Funding and Ongoing Ecosystem Wide Resource Maintenance
Runtime Inflation was designed to address the issues of ecosystem resources that have been prevalent across the digital currency ecosystem. Methods of being able to consistently incentivize the community’s work, research, overall productivity and advancement have been hindered by the lack of structural design at the protocol level to account for these critical components of ecosystem growth and development.
Shyft Runtime was designed to allow for node block production inflation to be redistributed back to the developers, builders and users that openly contribute and progress the Shyft Network forward.
This 2% perpetual inflation rate is automatically directed to the Runtime Inflation DAO’s that will categorically allow the community and users to determine the most important initiatives to provide resources towards.
A separate article will be released that goes in-depth into Shyft Runtime Inflation and we call on the community to help as this exciting new model is deployed shortly after the protocol’s release.
Strong Federation — 2%: Inflation per block is generated to pay for the cost of security; all network transactions fees are eliminated through EIP1559
Federation: The Shyft Network Layer 1 operates as a strong federation whose job is to act as proof of authority consensus network. This group of up to 21 participants is geographically distributed and all act as core parties who have aligned incentives to ensure the network is maintained and chainstate security is forward moving.
The network utilizes EIP1559 to eliminate fees that are transacted across the federation, creating a deflationary component of the network unless the network faces high usage and full blocks. As use cases utilize the network for its core purposes, fees are eliminated from the network reducing network fees over time.
Byfrost — 2%: Inflation routed to openly pay for the cost of public bridge nodes for asset-weighted Proof of Stake
Byfrost, which will be deployed halfway through the year, will be a weighted staking bridged infrastructure. The role of Byfrost is to secure asset transmission and data availability across blockchains. Byfrost is critical to allowing all of the Shyft Network smart contracts to communicate user identity data, compliant assets, and trust anchor coordination regardless of the layer 1 network they are operating on. Byfrost enables data availability to allow VASPs and use cases to be fully interoperable and connects the compliance and data layer to build an aggregate trust layer for public protocols and private systems.
Byfrost bridging infrastructure has 2% of the inflation perpetually being directed to pay for the proof of stake security provided by any users across the ecosystem. Nodes will be open and accessible by anyone across different networks who interact with Shyft Network on its native layer 1, or other bridged layer-1’s.
We are very excited to enter the next phase of our project, as we continue to see our communities growing and supporting the mission that guides us. We’ve stayed true to our path and our core values: decentralization, community-focused, impactful technology that is aimed at improving the way crypto is adopted.
We will be releasing further details on the inflationary component of the strong federation, and how the inflation mechanics of the network support perpetual enablement of cross-chain security and community DAO’s.
These token economics are the result of the careful analysis done over the past three years and reflect the decentralization-led ethos of the Shyft Network, its community and strategic participants. Our network is designed to be resilient and structured over time in a manner that best meets the needs of all global participants.
We are excited to begin to Shyft the world together.
Shyft Network aggregates trust and contextualizes data to build an authentic reputation, identity, and creditability framework for individuals and enterprises.
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