IQIP-14: New IQ Tokenomics for the New IQ.wiki Platform

Background

To ensure the rapid growth of the IQ token with the launch of the new IQ.wiki site we propose setting up new tokenomics for the IQ token. We propose using a halvening model like Bitcoin and FXS which provides higher initial emissions to incentivize early adopters and gradually lowers emissions to ensure long-term sustainability.

Currently, the IQ token uses a constant inflation model where the IQ emissions are the same each year. The issue with this model is that since emissions are constant there is little incentive for people to become early adopters and start contributing to the IQ ecosystem.

Why use a Halvening Model?

Bitcoin uses a halvening model where Bitcoin mining rewards halve every four years. This model incentivized users to mine Bitcoin early on and not wait for the token to rise in value since they know that emissions would halve in time. Bitcoin was the first cryptocurrency and this halvening model played a role in it becoming the largest cryptocurrency since it allowed Bitcoin to attract early adopters and grow quickly. The halvening model creates a sense of FOMO (Fear of Missing Out) giving people a reason to contribute value to the token now and earn rewards before the rewards lessen. Newer DeFi tokens like Frax Shares use an accelerated version of that model where inflation halves every 12 months. This updated version of the Bitcoin halvening model is ideal for the faster-paced modern crypto space.

This halvening model where emissions halve every 12 months is ideal for the IQ ecosystem with the launch of the new site since it heavily incentivizes early adoption and rapid growth. Once early adopters get involved and the token gains more traction like with Bitcoin and Frax Shares emissions can slow as the value of the token increases. This will allow the IQ ecosystem to grow rapidly with the launch of the new site and then emissions can lower as the token grows in value.

Bitcoin’s halvening model ensures that Bitcoin never reaches its max supply cap since as with each halvening fewer and fewer Bitcoin are mined. It is estimated that the last Bitcoin will be mined in 2140.

The IQ token has a maximum supply of 21 billion tokens in line with Bitcoin’s maximum supply of 21 million tokens. Like Bitcoin, the IQ token should also use a halvening model to ensure that the supply cap of 21 billion tokens is never reached.

Under the current constant inflation model which the IQ token currently uses, the IQ token would hit its maximum supply cap in January of 2027 and then all IQ emissions would have to stop. This is not ideal since it would quickly halt the growth of the IQ ecosystem.

Instead, we propose creating a new IQ token halvening emissions model where emissions are higher at first to incentivize rapid growth and then sustainably halve each year. With this new model, IQ emissions would sustainably decrease over time until they dipped below 1 IQ minted per month in August of 2050 ensuring that the maximum supply cap of 21 billion tokens is never reached.

This halvening model will not only allow the IQ token to grow faster in the short term it will also be more sustainable in the long run by slowly tapering IQ emissions over several decades as the value of the token grows.

The Current IQ Token Constant Emissions Model

Under the current model, 1 million IQ is minted each day as rewards for IQ holders who stake their IQ tokens with the HiIQ staking platform. 3,333 IQ is minted each day to be used for rewards for editors who contribute to the IQ.wiki platform. 2 million IQ is minted each day to be used for Olympus Pro Ethereum Bonds to build up Ethereum in the BrainDAO treasury and diversify the value of the IQ token. Similarly, 500,000 IQ is minted each day to be used for the Fraxswap TWAMM to build up FRAX stablecoins in the BrainDAO treasury to diversify the value of the IQ token. 500,000 IQ is also minted each day and used to reward liquidity providers to the FRAX-IQ pool on Fraxswap ensuring the IQ token has long-term on-chain liquidity and can grow quickly.

Under this current model, 4,003,333 IQ are minted each day. Since emissions are constant under this model if no changes are made, the IQ token would reach its max cap in January of 2027, and then all IQ emissions would have to stop.

How will the Halvening Model Improve the IQ Ecosystem?

We propose shifting to a new halvening model since it would increase IQ emissions in the first year after the launch of the new site. Increased emissions allow for increased rewards for early contributors to the IQ token including those who stake IQ tokens with HiIQ as well as those who edit and contribute to IQ.wiki. It will also allow us to grow the BrainDAO treasury and diversify quicker with Ethereum and FRAX stablecoin assets bringing more stability to the IQ token. The halvening model will also allow us to increase the number of IQ tokens going towards the Everipedia team allowing us to hire more developers and put greater funds toward growing the IQ ecosystem with the launch of the new IQ.wiki. This new model will also allow us to dedicate IQ token rewards to the upcoming Brainies NFT collection built around the IQ token.

The current IQ tokenomics allowed us to attract stakers and editors, and build up the BrainDAO treasury of IQ, Ethereum, stablecoins, and NFTs. It also allowed us to build the brand new IQ.wiki platform.

The new IQ tokenomics will bring in far more contributors to the IQ ecosystem and better reward early contributors leading to much more value creation for the IQ token. It will also allow us to put more funds towards development and grow faster. In the long term, the halvening model will allow us to taper emissions sustainably and grow the token well into the future.

The New IQ Token Emissions Model

Under the new proposed IQ token emissions model, 3 million IQ will be minted each day for HiIQ stakers. This will triple rewards for IQ stakers for the next 12 months rewarding early adopters and heavily incentivizing people to get IQ tokens, stake, and participate in IQ governance.

350,000 IQ will be minted each day to provide rewards for editors and curators who contribute to IQ.wiki. Under the current model 100,000 IQ was minted each month for editors. This change will heavily incentivize people to contribute to IQ.wiki especially the early adopters who join with this new site launching. This will allow the IQ community to create a wealth of high-quality IQ.wiki pages that create long-term value for the ecosystem.

4,333,333 IQ will be minted and used to acquire Ethereum, stablecoins, and other assets for the BrainDAO treasury. This will ensure that the IQ token is backed by a diversified portfolio of digital assets during times of volatility. As part of these changes, we also propose creating a rule where up to 25% of incoming assets to BrainDAO from bonds and the TWAMM can be used by Everipedia to grow and develop the IQ ecosystem. This ensures that the company leading the development of the IQ ecosystem is also diversified like the IQ token itself.

250,000 IQ will be minted each day to incentivize liquidity for the IQ token. Currently, these emissions are used to incentivize the FRAX-IQ pool on Fraxswap. These IQ incentives have been halved now that we have launched FXS rewards for the pool as described in IQIP-12.

1,000,000 IQ will be minted each day to provide rewards for our upcoming NFT gauges program where IQ token rewards will be available for NFT projects that stake their NFTs with the IQ protocol. At first, all of the inflation will go to Brainies, the upcoming NFT collection for the IQ token. Brainies will be the first NFT collection will real DeFi rewards and will bring new value to the IQ ecosystem. Over time we will add other blue chip NFT collections to the NFT gauges.

3 million IQ will be minted each day and allocated to the IQ.wiki company which is responsible for growing IQ.wiki and the IQ ecosystem as a whole. This ensures that IQ.wiki has enough funds to continue to innovate and create value for the IQ ecosystem by building new technology like the brand new IQ.wiki platform and the HiIQ staking system.

While IQ emissions are increased in the next 12 months to facilitate rapid growth since emissions will halve every 12 months this shift will also make the IQ token more sustainable. With this model, IQ emissions would gradually decrease until they dip below 1 IQ minted per month in August of 2050.

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