QPIP-4 Adjusting rewards, fund allocations and burning

KEY PROPOSALS:

Proposed burn:

• Staking Support Fund: from 150m to 100m → 50m burn
• Ecosystem Fund: from 435m to 340m → 95m burn (390m tokens allocated from the 2nd billion and ~45mil vested from the 1st billion tokens)
• Public Goods Fund: from 50m to 25m → 25m burn

Total: 170 million tokens to be burned

Proposed release changes:

• Increase staking rewards from 30% to 40% from the total reward pool
• Reduce validator rewards from 70% to 20% until the release of the new Qredo chain
• Burn remaining 40% of weekly reward pool until the release of the new Qredo chain
• Introduce 2.5-year half-life instead of 2-year half-life for the Staking Support Fund

OVERVIEW

QPIP-4 addresses the need for adjustments to the allocation of funds within the Qredo Network to maintain a sustainable model and responsive to evolving market conditions. The proposal includes modifications to the Staking Support Fund, Ecosystem Fund, Treasury Fund, and Public Goods Fund. Specifically:

1. It proposes a reduction in the Staking Support Fund from 150 million QRDO to 100 million QRDO, resulting in a burn of 50 million QRDO.

2. The Ecosystem Fund is reduced from 435 million QRDO to 340 million QRDO, with 90 million QRDO being burned.

3. The Public Goods Fund is decreased from 50 million QRDO to 25 million QRDO, with a burn of 25 million QRDO.

4. The total burn resulting from these changes is 170 million QRDO.

5. Increase staking rewards from 30% to 40% to reward the early supporters of the Qredo Network.

6. Reduce validator rewards from 70% to 20% until the release of the new Qredo chain to decrease inflation.

7. Burn remaining 40% of weekly released rewards, until the release of the new Qredo chain to reduce the TS of QRDO.

8. Introduce 2.5-year half-life instead of 2-year half-life for the Staking Support Fund to create a more sustainable distribution.

MOTIVATION

The motivation behind QPIP-4 is to ensure that the fund allocations within the Qredo Network remain aligned with market dynamics and that the TS of tokens are aligned with the speed of development of the network. These adjustments aim to strike a balance between maintaining sustainability and providing appropriate incentives while continuing to adhere to the principles of decentralization and sound money. This is also based on the community feedback and sentiment regarding the different funds set up for the sustainability of the Qredo ecosystem and QRDO Economics.

DETAILS OF THE DRAFT PROPOSAL IN THE DISCUSSION LINK