$DVT TOKEN ECONOMICS GOVERNANCE PROPOSAL

Dear SafeStake Community:

Now that the token rebranding governance votes are officially over, SafeStake has a new native token - $DVT! We appreciate everyone who voted and voiced their opinion on the new token’s symbol.

The major use case of the new DVT token will be the native payment device of the SafeStake network. $DVT will also serve a governance function (as $STATE did before), with holders able to vote on governance proposals like this one. As such, the previous $STATE tokenomics have become outdated, hence the core team proposes a new tokenomics for $DVT in order to bootstrap and fertilize the SafeStake ecosystem.

$DVT Tokenomics Based on the contents of the token rebranding proposal that passed, the initial max supply of DVT tokens will be 100Mm.

According to the previous distribution guideline, the vesting terms and allocation of all sectors will remain unchanged, except the Eco Treasury, “Plato” testnet validator rewards, Dapps Incentive Program, and User Governance Staking Rewards (50% of this allocation has already been distributed to the current governance staking contract). All remaining tokens of the latter three sectors will be reallocated to the Eco Treasury, increasing its portion to 40.16% of the total supply. Then, we will break the Eco Treasury funds down into three parts to help bootstrap our Distributed Validator Technology infrastructure.

1. 10% of the total supply, or 10Mm DVT tokens, will be reserved for new fundraising for SafeStake user acquisition.
2. 3.6% of the total supply, or 3.6Mm DVT tokens, will be reserved to airdrop to new validators during the first three months after SafeStake mainnet launches.
3. The remaining 26.56% of the total supply, or 26.56Mm DVT tokens, will be held in the Eco Treasury vault, and any tokens released from the vault in the future must comply with the principles below.

Initial operator payment parameter settings: Each Validator (32 ETH) registered on the SafeStake network will pay a monthly sum of 120 DVT tokens to the Operator committee, made up of four different operator nodes. This subscription fee will be set up and accepted when the validator is imported into SafeStake’s DVT infrastructure and delegates its Beacon chain validation tasks to four operators selected by the validator during the registration process on SafeStake. This cost structure of around $21/month is based on the leading staking service provider in the advanced VPS category.

Ecosystem: There are three different players in the SafeStake and DVT token ecosystem - operators, validators, and speculators.

Starting with the last first, speculators always buy low and sell high, which is a sub-set of how operators behave. It only makes sense that because operators earn DVT tokens as revenue, they will be motivated to take increased profits and sell the token when the price goes up. However, operators may also decide to hold the tokens or even purchase them back from the market when the token price drops too low since they always want their earnings in subscription fees to cover the expenses of running their node(s), at the very least.

So the two major players in the SafeStake ecosystem become the operators and validators. Operators are the cornerstone of success. More operators joining the network allows the system to support more validators with a more robust staking service.

Now, let’s define the principles which trigger an Eco Treasury token release: Let, K = initial monthly subscription fee (120 DVT tokens), V = the number of validators in the month(t), DVT token spot price will be calculated by VWAP on CMC or CoinGecko.

a) If Kq of Month(t+2) >= K of Month(t) *150%, it will trigger K x V DVT tokens to be released from the Eco Treasury vault at Month(t+3). b) If Kq of Month(t+2) >= K of Month(t) *200%, it will trigger 2K x V DVT tokens to be released from the Eco Treasury vault at Month(t+3). c) If Kq of Month(t+2) < K of Month(t) *150%, it will not trigger a new release. d) If in a consecutive 6-month period, Kq of Month(t+5) >= K of Month(t) *150%, it will trigger the network contract settings to modify the subscription fee (with fewer DVT tokens), in order to benchmark the original K value. e) If in a consecutive 3-month period, Kq of Month(t+2) < K of Month(t) *75%, it will trigger the network contract settings to modify the subscription fee (with more DVT tokens), in order to benchmark the original K value. f) When the Eco Treasury vault is out of DVT tokens based on the above release triggers, it will mint new tokens to inject into the market.

Next, we’d like to explain the logic that defines the above principles of tweaking supply and demand. The Nash Equilibrium in a coalition game cannot be planned; instead, it can only be achieved empirically and dynamically. The following is a two-player coalition game relative to our SafeStake ecosystem of operators and validators:

Let’s define the payoffs as (1,1) both operator and validator buy the tokens when the price goes up. (3,1) both operator and validator sell the tokens when the price goes up. (2,3) both operator and validator buy the tokens when the price goes down. (0,0) both operator and validator sell the tokens when the price goes down.

We can use the coalition game above to find a Nash Equilibrium that uses mixed strategies. Validators play a mixed strategy of (Buy, Sell) = (0.75, 0.25), and operators have an expected payout = 1.5. This conclusion is sound when viewing validators as less subject to price speculation, and having a real need to subscribe to SafeStake’s operator node service in order to maximize their staking yields. Additionally, when the price of the DVT token drops, the service cost for validators also decreases, making them more likely to purchase additional tokens to extend their subscriptions.

If you agree with the above principles, help grow the SafeStake ecosystem by supporting this new $DVT tokenomics proposal and vote ‘Agree’. Look forward to your continuous support!

Sincerely, The SafeStake Team