Economics
Last updated
Last updated
The native blockchain token of the Endless Web3 Genesis Cloud (EDS) serves as the fundamental economic unit of the network, fulfilling multiple core func- tions, including transaction fee payments, governance participation, and staking rewards. A well-structured token issuance and inflation mechanism, incentive staking, governance framework, and transaction fee allocation are designed to ensure the long-term stability of the network, encourage positive engagement from ecosystem participants, and drive the sustainable growth of the ecosystem.
Initial Total Supply: 10 billion EDS.
Token Allocation Ratio:
• Ecosystem and Community (32.10%): Used to incentivize community participation, reward developers, promote ecosystem growth, and support network staking and governance incentives.
• Foundation (20.00%): Allocated for ecosystem development support, long- term reserves, project operations, and emergency response to ensure the sustainable growth of the system.
• Early Supporters (11.46%):Rewarding the substantive contributions of early supporters of the project.
• Team (20.00%):Rewarding core team members to ensure their long-term commitment and continuous technological innovation.
• Market Partners (8.64%):Dedicated to market expansion,strategic col-laborations,and incentives for ecosystem partners.
• Public Sale (3.00%):Used for initial fundraising and token liquidity pro-visioning.
• Venture Capital and Strategic Partners (2.20%):Allocated for strate-gic resource integration and liquidity enhancement.
• Genesis Node Staking (2.60%):Used for staking by genesis nodes to maintain network operations.
Endless adopts an inflationary economic model to support network growth. Newly issued inflationary tokens are primarily allocated to network rewards, the ecosystem fund, and governance budgets. The inflation rate will be dynamically adjusted based on economic models and the overall development of the ecosystem. The specific mechanisms are as follows:
• Initial Inflation Rate: Set at 8%.
• Annual Reduction Mechanism: The inflation rate decreases by 15% per year until it stabilizes at a minimum rate of 1.5%. This ensures long- term reward incentives for the network while avoiding excessive inflation that could destabilize the ecosystem.
• Inflation Rate Cap: The maximum inflation rate is capped at 8% to prevent excessive dilution of token value.
• Governance-Adjustable Inflation: Token holders can participate in an- nual governance voting to fine-tune the inflation rate within a limited range of ±1% to adapt to ecosystem development needs.
To mitigate the potential negative impact of inflation on token value,Endless will implement both a Gas Fee Burning Mechanism and Periodic Buyback and Burn strategies.These measures ensure the stability of the economic system under varying market conditions.
Distribution of Inflationary Tokens:
• Staking Rewards (60%):Used to incentivize validator nodes and tokenstakers,ensuring the security and stability of the network.
• Ecosystem Development Fund (30%):Allocated to foster ecosystemgrowth,attract developers,and encourage community members to actively contribute to the enhancement and optimization of the ecosystem.
• Relay Network Incentives (10%):Provided to support relay node oper-ations,promoting efficient network communication and data transmission.
Within the Endless ecosystem, the native public blockchain token EDS has a wide range of applications across multiple dimensions, including but not limited to:
• Transaction Fee Payments: Used for paying Gas fees and on-chain trans-action fees.
• Network Staking and Incentives: Holders can participate in network validation through EDS staking and receive staking rewards.
• Underlying Native Asset Functions:
– Used as collateral for decentralized lending;
– Supports AMM (Automated Market Maker) liquidity mining;
– Functions as a medium for cross-chain asset transfers, enabling inter- operability between different blockchains;
– Used as collateral for issuing synthetic assets, such as minting stable-coins.
• Ecosystem Growth Incentives:
– Developer Incentives: Includes protocol development subsidies, bug bounty programs, and innovation application incubation funds;
– Project Support: Provides early-stage project funding, market pro- motion subsidies, and technical support rewards;
– User Incentives: Used for early user airdrops, event rewards, and community contribution appreciation.
• Ecosystem Service Payments: Used to pay for various services, includ- ing component purchases, decentralized storage, AI services, etc.
• Governance Participation: EDS holders can participate in ecosystem governance by staking tokens. Through a voting mechanism, they can decide on technical, economic, and ecosystem-related proposals, such as network upgrades and inflation rate adjustments.
Transaction fees are a crucial component of the Endless economic system, designed to:
• Prevent Network Abuse: Implement a reasonable fee mechanism to prevent excessive resource consumption;
• Optimize Resource Allocation: Facilitate transaction prioritization and improve blockchain space utilization efficiency;
• Provide Rewards for Stakers and Validators: Ensure the economic sustainability of network operations.
The transaction fees in the Endless network consist of Base Fees and Dy- namic Fees:
• Base Fees: All on-chain transactions require a base fee, calculated based on transaction data size, ensuring that each transaction covers at least the minimum network resource consumption costs. This includes:
– Computation Fees: Covers computational resource costs;
– Storage Fees: Covers long-term storage costs of transaction data.
• Dynamic Fees: The gas price in the Endless blockchain is subject to a dynamic adjustment mechanism that fluctuates based on network supply and demand. Validator nodes prioritize transactions with higher gas prices, and users can opt to pay a higher gas fee to increase transaction execution priority and accelerate processing times.
Transaction Fee Allocation Mechanism:
• A portion of transaction fees is allocated to validator nodes as incentives for processing transactions and maintaining network operations;
• Another portion of EDS tokens is burned through a token-burning mecha- nism to reduce market supply and optimize the economic balance.
The specific allocation and burning ratios for transaction fees will be dynamically adjusted based on network conditions and governance voting, with adjustments implemented through on-chain smart contract parameters to ensure optimal net- work efficiency.
The major roles within the Endless ecosystem and their token economic flows are illustrated below
Foundation: Responsible for managing EDS token treasury,with founda- tion management members consisting of the Endless Team and Endless Labs.
The Endless Team focuses on the development of Endless'core technolo-gies;
Endless Labs: Focuses on innovations in cryptography and cross-chaintechnology research.
Treasury: The treasury employs a hybrid fund management approach that combines pre-set allocation ratios with dynamic adjustments.It establishes strate- gic reserves,a community governance fund,an ecosystem development fund,and a validator node incentive pool.Additionally,inflationary EDS tokens will be allocated to a dedicated relay node incentive system to ensure flexible resource allocation and long-term economic sustainability.
Treasury assets are categorized as follows:
• Foundation Reserves:
– Reserve assets consist of EDS issued by Endless, NUSD, and USDT raised through funding;
– Maintains and manages the collateral assets of NUSD to ensure 100% over-collateralization of the stablecoin. Initially accepted collateral assets include USDT, EDS, and tokens from ecosystem applications, with future expansion to include more yield-bearing assets as collat- eral.
• Ecosystem Development Fund:
– Promotes the development of ecosystem applications and stablecoin adoption;
– A portion of the gas fees generated by ecosystem applications will be burned, while another portion will be returned to the ecosystem fund, and part will be used to incentivize staking nodes.
• Community Governance Fund: Allocated as governance rewards for community governance participants.
• Validator Node Incentives: Rewards for validator nodes and token stakers to enhance network security.
• Relay Node Incentives: Encourages relay node operations and services to improve ecosystem interoperability.
Community Governance Committee / DAO:
• Responsible for managing the Community Governance Fund;
• Allows token holders to participate in network governance via DAO voting, making decisions on key parameters such as network upgrades, inflation rate adjustments, stablecoin collateral asset types, and over-collateralization ra- tios;
• Voting with tokens results in their burning, ensuring the fairness and long-
term sustainability of the governance system. Relay Nodes:
• Relay nodes provide data forwarding and network optimization services for the system and ecosystem applications;
• Contributors operating relay nodes receive EDS rewards.
Stakers: Earn network rewards and a share of on-chain transaction fees by staking EDS.
Validator Nodes: Operators of validator nodes receive EDS rewards as an incentive for maintaining network security and stability.
Endless implements a well-designed staking and incentive mechanism to en- sure the active participation of network participants (validators and delegators) while maintaining network security and decentralization. The following sections provide a detailed explanation of Endless’ staking mechanism, reward distribu- tion, and penalty system.
Endless adopts a delegated staking mechanism, described as follows:
• Validator Nodes: In the Endless network, entities that hold a sufficient amount of Endless tokens and meet specific requirements can become val- idator nodes. Validators are responsible for processing transactions and participating in network consensus.
• Delegated Stakers: Endless token holders can delegate their tokens to one or more validator nodes. Delegated stakers support validator opera- tions through staking, and the staking rewards earned by validators will be proportionally distributed to delegated stakers.
Staking Rewards
Validator nodes and stakers participate in network validation by staking EDS tokens and receive corresponding rewards.
• Reward Sources: Staking rewards mainly come from the following three sources:
1. Staking reward pool
2. Newly minted tokens from Endless ’inflationary issuance
3. Distribution of transaction fees
Rewards are automatically distributed at the end of each Epoch cycle (every two hours).
• Reward Distribution: Staking rewards are allocated between validator nodes and delegated stakers. Validators can set a commission rate, which is automatically deducted from staking rewards during distribution.
Penalty Mechanism
• Early Stage: During the early stages of the Endless network, no slashing mechanism will be applied to validator nodes. Even if a validator node un- derperforms, its staked tokens will not be penalized. However, the Endless network will monitor the operational status of validator nodes. Nodes that fail to meet performance standards will be temporarily disqualified from validation and lose their reward eligibility for a specified period. Once the node resumes normal operations and meets the required observation period, its validator status will be reinstated.
• Future Plans: In the future, Endless may introduce stricter penalty mech- anisms through on-chain governance to further enhance network security and stability. Potential measures may include reducing staked tokens or decreasing staking rewards for underperforming validators.
