The QCK Tokenomics

Quicksilver is a sovereign Cosmos-SDK zone that provides liquid staking for the Interchain. Thanks to its design, it can scale to onboard a limitless number of zones with zero onboarding effort required from zones and validators.

Quicksilver is controlled by its token holders. Decisions pertaining to the future of the Protocol, such as control parameters, onboarding of new zones, distribution of incentives, etc. will be determined by the community. In this article, we will explore the tokenomics of QCK, Quicksilver’s native token.

Design Philosophy

Adaptative Tokenomics

Instead of having rigid inflation and issuance schedules with pre-ordained allocations, the QCK token aims to be an adaptive token which responds to market and ecosystem conditions appropriately. To this end, we expect protocol governance to play a large part in determining the future of the QCK token. Periodic community discussions will be held to chart the course for the token and review proposals from the community.

Distribution

The QCK token represents ownership over the Quicksilver protocol and therefore, it is important for the token to be well distributed amongst the communities of the onboarded chains. The protocol has several mechanisms to ensure that there is an overlap of incentives and ownership between the users of the Quicksilver protocol and holders of the QCK token.

Token Utility

The Quicksilver native token, with the ticker QCK, has these specific roles: governance, security, and payment of on-chain fees.

Governance

Governance is a critical component of the Quicksilver network. Onboarding of new zones and corresponding incentivisation, spending of community-controlled funds, changing of network parameters and control of the upgrade process are all events handled by the governance process. QCK token holders are able to use their assets to vote on behalf of the protocol.

Security

QCK token holders are able to use their assets to secure the Quicksilver chain by delegating them to Validators that stake them to provide PoS consensus to the Network.

The Quicksilver team has been considering transitioning to Interchain Security v3 if it makes economic sense to do so. To avoid any scheduling dependency, the Quicksilver chain will launch as a sovereign Cosmos-SDK chain. If and when Interchain Security v3 is delivered, the potential onboarding will be in the hands of the Quicksilver Community through governance.

Fee Payment

Additionally, the QCK token is used to pay fees for transactions submitted to the network. These fees are paid to block producers on the network as compensation for ensuring a transaction is included in a block.

Additionally, staking QCK provides ongoing rewards in denominations of the chains that Quicksilver on-boards. This would initially allow stakers of QCK to passively earn tokens like Atom, Osmo and Juno. But soon, staking QCK should provide exposure to every major Cosmos asset that currently exists or will emerge in the future. These passive rewards are generated from the fees on staking rewards that the protocol harvests. All revenue generated by the protocol is distributed amongst QCK stakers.

Inflation Schedule

The QCK token will experience yearly inflation until it reaches a maximum supply. Inflation in the first year will be 25%. After year 1, inflation will drop by 25% per year. The current maximum QCK supply is 400MM at these inflation rates.

Inflation is governance configured, meaning the community can vote on total inflation and yearly inflation rates.

Year 1 inflation distribution is planned as follows:

• 80% emitted as Staking Rewards to reward validators and their delegators for securing the Quicksilver network.
• 10% distributed as Participation Rewards to users of the Quicksilver protocol.
• 7% to the Incentive Pool for ongoing incentives to new users and liquidity providers.
• 3% to the community pool controlled by governance, to be spent on projects benefiting the Quicksilver community.

This allocation can be changed at the discretion of the QCK token holders through a governance proposal.

Genesis Token Allocation

The initial token allocation of the Quicksilver native token, QCK, will be 200 million. This will be allocated as follows:

• Community Incentives (Airdrops and Liquidity) — 102.7m
• Foundation (future developments and grants) — 40m
• Investors (including any potential future investments) - 26.3m
• Development team (including employees of the DevCompany, present and future, and future core contributors) — 21m
• Testnets Incentives - 10m

This article was updated on 14.03.23 to reflect updated Year 1 inflation.

Quicksilver is an interchain liquid staking protocol for the Cosmos ecosystem and beyond.
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