OK, so we have badges to access the network and tokens to pay for that access. But how are payments actually processed? Let’s dive into the mechanics of Chirp…
Accessing The Chirp Network
Chirp pricing is based on subscriptions. Users pay to use the network for a certain period of time and for a certain number of end devices. Access is granted through an authorized party who issues the Access Badges corresponding to the subscription paid. The amount paid is then converted to the corresponding market value of $CHIRP. As part of the strategy to grow value to the token holders, that amount of $CHIRP used to obtain Access Badges is taken out of circulation, as it is sent to a Token Revenue Pool (designated governance wallet).
Since these processes occur on-chain, everyone can verify how many Access Badges were minted, the corresponding revenue generated by them and the amount of $CHIRP removed from circulation. This transparency and report reinforces trust in Chirp’s decentralized economy.
The Token Revenue Pool: Generating Long-Term Value
We have mentioned the mechanism to remove tokens from circulation in a previous article. But how does it work exactly? Basically, it means all $CHIRP tokens used to access the network are taken out of circulation and locked in a specific smart-contract known as the Token Revenue Pool. This ensures that these tokens are effectively taken out of circulation and locked for a specified period of time. This lock-up is expected to be of 10 years, until the token reaches its maximum supply.
Once the token is fully diluted at the 10-year mark, there should be a governance vote to decide on the destination of the Token Revenue Pool.
By adopting such a mechanism, we ensure that network usage today generates future value for the entire network. This happens by making the token more scarce. As the token becomes more scarce, its price is expected to appreciate in the long-run, therefore making rewards more appealing, particularly for those providing network coverage, the Network Keepers.
Treasury Management: Token Reserve and Token Treasury
Chirp, as any blockchain-powered system, is a social construct as much as a technological one, particularly since it has a significant economical side. This creates the need for mechanisms to deepen liquidity for the token and to manage reserves to incentivize network maintenance, development and growth.
Token Reserve
$CHIRP is the enabler token for all things in the Chirp ecosystem. Therefore, it needs to be widely and easily available for anyone who wants to join the ecosystem. This means there is a need for efficient tools for its liquidity. This includes exchange listing, market making and unforeseen liquidity and stabilization requirements.
We have reserved 8.73% of the token supply for this specific purpose: to improve token liquidity. These tokens will be pre-minted, ensuring there is liquidity since inception, and we plan to partner with top-notch market makers to ensure the performance of this function.
Token Treasury
Chirp, as any live system, needs maintenance and development. For the completion of these functions, money is required. What is the “money” powering crypto-systems? Tokens. This is why we decided to allocate 6.27% of the token emissions to a token treasury.
It will serve the main purpose of:
- Treasury funding, namely incentivizing the ecosystem growth by funding daily operations (including developers’ remuneration, marketing activities, services associated with network maintenance and development);
- Fund research and development and other grants for projects that will promote network growth and long-term adoption.
The token Treasury follows a predetermined mandate and is subject to governance oversight and participation from the network stakeholders.
Having a say in Chirp
Governance is a key feature of Web3 projects. What is the use of a project that one owns but has no say on its development? Community participation and engagement in the decision processes are key for us.
Some of the governance functions include:
- Network expansions with new technological basis;
- Destination of Token Revenue Pool funds;
- Other relevant changes to the way Chirp’s network functions.
There will be an on-chain governance process, where network stakeholders can vote, according to their role:
- Token holders vote based on their $CHIRP holdings;
- Network Users vote depending on the number of devices and Access Badges’ history;
- Network Keepers vote according to the number of devices and contribution to the network.
Given that one individual or entity can accumulate different roles, each individual can vote in the different roles they have on the network.
We’ve covered a lot of ground in this article, going through some of the key mechanisms that power the Chirp network and Economy. From how the network is accessed, we saw how the revenue is transformed into long-term value for the network. We then dived into some of the mechanics of how operations are performed, either through the funding and for providing liquidity, finalizing on how everyone can participate in the decision process regarding the evolution of the project.
Now it’s time to start flying! Let’s Chirp?
