Ink Finance is an all-in-one toolset for the organizations of Web3 to build and operate their financial framework. Thanks to its plug-and-play features and the flexibility to issue and risk manage bespoke financial products across multiple blockchains, INK is reportedly quickly becoming the financial governance tool of choice for emerging crypto ecosystems and traditional institutions alike.
What unlocks those features and realizes the platform’s value is QUILL, INK’s native token. Here’s a breakdown of QUILL’s tokenomics, and how DAOs use them as needed governance capital, as well as how QUILL holders can use them to share the growth with up-and-coming DAOs.
The Initial QUILL Staking Rewards
Ink Finance will set aside 25% of the QUILL tokens as the governance staking rewards, over a 20 year release period. The daily emission will be dynamically calculated based on annual usage figures. Ink Finance accrues the captured transaction or asset custody fees into its treasury, and will use these cryptocurrencies to buy back the QUILLs in circulation, and then “soft destruct” them by placing them at the bottom of the reward pool as future emission.
INK’s Fee Capture Tools Generate Returns for QUILL Holders
Removing QUILLs from circulation places upward pressure on their prices as more and more DAOs use the INK facilities, benefiting all QUILL token holders as the treasury directly “monetize” fees and “rents” captured by the platform. The fees charged are for financial services provided to DAOs running on INK platform, initially set at 0.2% per transaction and 0.5% per annum for assets under custody. While 25% of the income generated from those fees is used to maintain the INK platform, the remaining 75% are used to buy back the QUILLs in circulation. The entire QUILL holder community, including the DAOs who must stake them to use the functions, have the right to vote on how to adjust those rates.
For DAOs, QUILL Is a Form of Necessary Working Capital
While most of the features on INK, including the core governance functions, are completely free, more advanced fiscal and financial features are behind a sort of paywall. DAOs that need to use these advanced tools must acquire and stake QUILLs to unlock them. Unlike the subscription model of the Web2 SaaS, DAOs can preserve such working capital and sell them when they decide to stop their operations, instead of paying the irrecoverable subscription fees. This could be a truly innovative utility model in which the users are also the partial owners of the software. It’s a bit like a traditional startup buying real estate or machinary to run its business; if it doesn’t succeed, the company can liquidate those assets to recapture, or even gain appreciation on, the initial investment.
The minimum number of QUILLs required to activate advanced features will later be determined in a transparent voting process, which all existing DAO users will be able to participate in by virtue of their staked QUILLs. All staked QUILLs earn emission rewards.
INK Also Enables the QUILL Holding Community to Sponsor DAOs
If DAOs currently don’t have upfront capital to acquire and stake the required minimum QUILLs, any QUILL holders in the INK community can be their sponsors, granting them the ability to use the advanced features by staking their QUILLs on behalf of the sponsored DAOs.
Typically the sponsor will ask for revenue sharing with the DAOs in return, and it is totally determined by the market and free will. What’s the most critical part of this arrangement is that the sponsors can insist on holding one of the DAOs Treasury Managers to make sure both sides deliver on their promises – the real meaning of smart contracts. While being the sponsors, QUILL holders continue receiving the staking rewards, adding to the revenue sharing generated by the DAOs they sponsor.
The goal of these mechanisms of QUILL is to foster a wide and diverse ecosystem of innovative and unique DAOs while giving members of the INK community a way to generate long-term returns in exchange for supporting that growing ecosystem.
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