Background

Streamr, like many other Web3 projects, is governed by a Decentralized Autonomous Organization (DAO) that utilizes Streamr Improvement Proposals (SIPs) to make decisions on technical and financial parameters that influence the project's growth and development.

In previous proposals—SIP-9 and SIP-14—the Streamr community approved token mints to support protocol development, growth initiatives, and rewards for the Node Operator community. As a recap, the project has an unallocated and unminted token reserve of approximately 850 million DATA, which is the difference between current supply (1.15B DATA) and the hard cap (2B DATA). Deciding if, when, and in what quantity, if at all, new tokens are allocated from this reserve is a key responsibility of the DAO, and none of that reserve can be used without approval of the community of token holders that make up the DAO.

In November 2022, SIP-9 authorized the issuance of 100 million DATA tokens to fund development and growth over time. This funding package will be nearing depletion early next year, so now would be an appropriate time for the DAO to sign off on the next package.

This proposal, SIP-22, seeks approval to mint a further 100 million DATA tokens to continue funding project development and growth. Planned upgrades to the Streamr Network include multi-chain deployments, a native SDK, and flexible data validation which enables Streamr to embed into a much broader range of devices and applications. It also reaffirms the existing policy for perpetual Node Operator rewards at an emission rate of 30 million DATA tokens per year. In other words, in this SIP we propose continuing the two most significant fiscal policies of the project.

Project finances

With the completion of the Streamr Network version 1.0, the project has shifted its focus toward expanding the adoption of the Streamr Protocol. As a result, development-related expenditure has decreased, as the core technical foundations are now established. During the development phase of Streamr 1.0, monthly spending was significantly higher, but in the current post-launch phase, this has been reduced by about half.

The Streamr project has demonstrated responsible financial management by utilizing its ICO funds to deliver a feature-complete roadmap and effectively managing the SIP-9 funds, post 1.0, to extend the project's vision. The project is not under immediate financial pressure but aims to extend the current fiscal policy to maintain its growth trajectory.

How long will this upcoming package last? The time frame depends on future market conditions, which cannot be known in advance, but certainly some projections can be given. The time depends on the average future market price as well as the project’s burn rate. While we can’t know the future market value, we can to a large extent control the burn rate. At the moment, the project’s operational expenses are around $230k/month. The burn can be trimmed down if the market price is lower than expected, and on the other hand the project might spend more if the market price turns out favorable, but for the sake of illustration, let’s assume the burn stays at the current level, allowing us to calculate projections for the package’s timespan:

• At an average price of $0.03, the package lasts approximately 13 months.
• At an average price of $0.05, the package lasts approximately 2 years.
• At an average price of $0.30, the package is sufficient for over 10 years.

Based on the market conditions at the time of writing, the remainder of the previous SIP-9 package, plus a stablecoin buffer that the project maintains, this next package would begin in early 2025.

Industry standards and inflation considerations

Though Web3 is still in its early stages, a common approach is emerging among projects to coordinate with their communities on a responsible token circulation strategy that promotes growth for all stakeholders. Treasury allocations and emission rates are typically adjustable through governance, enabling communities to adapt to changing needs. We believe that establishing a balanced fiscal policy is essential for the project's long-term success, and we are confident that our current policies align with industry standards.

Industry Examples:

• Polygon: Recently upgraded their token to allow for additional issuance. Established a 2% annual emission rate for their POL token, for ongoing development. This model continues as needed, with the community empowered to adjust or discontinue it based on evolving requirements.
• Chainlink: Reserved approximately 30% for company development and operations. While these tokens are not part of any governed emission schedule, they are introduced into circulation as needed for growth and development, similar in effect to Streamr's proposed fiscal policy.

Future fiscal policies

While we view our current fiscal policies as necessary for today, they are not intended to be our long-term strategy. The Streamr team has communicated the strategic importance of diversifying our development funding streams, and progress has already been made in this area, though these outcomes are not yet finalized. Additionally, the passing of SIP-21 demonstrates that the Web3 community can share development costs when protocols mutually benefit. Streamr’s recognition as an innovator in the EU further validates its potential to attract government investment and institutional support, highlighting the project’s value in shaping the future of decentralized data distribution. Streamr has a solid track record with successful deliveries of the Kraken, Atarca, and Tracey projects, which have collectively secured approximately 1.2 million euros in funding so far. Additionally, we have recently submitted new proposals, seeking an estimated 1.5 million euros in funding on EU related bids that leverage Streamr technology. These efforts will help ensure the project’s long-term resilience and sustainability for future generations.

Regarding the Node Operator fiscal emission policy, it is expected that as organic demand for Operator services grows, emission rates will likely decrease over time. The Streamr DAO will continue to monitor and adjust these rates as needed to ensure the project's long-term sustainability, aligning with the size and growth of the Streamr project and ecosystem.

Voting Procedure

The voting period for this proposal will last seven days. Important Notes for Node Operators: Your voting power is equal to the DATA tokens held in your Operator Contracts, including the tokens delegated to you.

Approve

• Approval to mint 100M DATA tokens over time to fund development and growth.

Reject

• Do not approve the next funding package of 100M DATA tokens for development and growth.

Proposal summary

• Allows Streamr to continue investing in growth, development, and marketing at a level appropriate for a project of its size and prevailing market conditions.
• For clarity, the Node Operator reward emission rate will stay the same, regardless of the outcome of this vote.
• If not approved, the token holders will need to further debate the parameters of the next package together with the Node Operator reward emission parameters, until acceptable territory is found.

We encourage all community members to share your thoughts on the Governance channel of our Discord and participate in the voting process to shape the future of the Streamr project.