SOLVE Tokenomics 2.0 Release

Background

SOLVE community members, partners, and advisors in the blockchain and Web3 space have provided insights, feedback, and advice on how to make the SOLVE community stronger. The most significant feedback received is that SOLVE tokenomics should be updated to accrue greater value and benefit to token-holders.

As a result of this feedback, significant upgrades to the tokenomics and governance framework are proposed and are collectively referred to as SOLVE 2.0. The new tokenomics and governance framework further empower the community and includes community approved staking and staking rewards, and secure networks, as well as retires the previously issued governance token called DCARE and introduces a community pool and enhanced governance via proposals and voting by community.

The proposed changes encompassed in SOLVE 2.0 are aimed at enhancing community’s ability to govern, secure networks, execute community feedback on prior initiatives, add more utility to SOLVE, and enable community to drive growth of networks and wallets.

SOLVE 2.0 introduces two models that allow token-holders to stake SOLVE subject to community approval of the staking program

a) Stake into networks

b) Liquidity provider incentives

1. Community governance

Community will govern the use of community pool funds for liquidity, new networks and expansion of wallets, marketing activities and bounties, network development, other initiatives, and staking rewards. Governance by SOLVE community shall be conducted using proposals and voting. Approved proposals shall be executed by the steering committee per the governance model described below.

a) Steering committee

a. Total 7 members, 3 permanent, 4 appointed

b. 3 seats are permanent and are comprised of people with deep knowledge of SOLVE ecosystem, Care.Platform, Care.Networks, data security and user privacy, and experience with network launch and adoption. These 3 members shall be announced soon.

c. 4 members will be appointed by permanent members for an initial term

i. Permanent members shall appoint new members via unanimous vote

ii. Initial term of appointment shall not exceed 6 months

d. Community will appoint the 4 members at the end of initial term

i. Community shall appoint members using proposal and voting process

ii. Term of appointment shall be 12 months

iii. If the community is unable to appoint members for any reason, the permanent members shall vote to appoint new members or renew terms of existing members for a second term not to exceed 12 months

e. Community shall vote to set compensation and reward for steering committee members using proposal and voting process

f. All meetings of Steering committee are public

i. Open meetings, anyone can attend

ii. Published agenda

iii. List of proposals under review

iv. Public record of votes and decisions

v. Published meeting recordings, transcripts and notes

g. Decisions of Steering committee require majority vote to pass

i. When 3 members, then 2/3

ii. When 7 members, then 4/7

h. Steering committee can initiate proposals for following purposes

i. Block proposals that are harmful via a stop proposal

1. Requires 3/7 vote to pass

2. If proposal is passed, execution will pause for 30 days

3. If proposal has not been voted, vote will be canceled

ii. Remove a steering committee member via a removal proposal

1. Requires 5/7 vote to pass

2. If proposal is passed, member will be removed immediately

3. If proposal fails, member will remain till end of term

iii. Set and adjust rules and guidelines for steering committee members for ethical behavior, conduct and responsibilities

1. Requires 5/7 vote to pass

b) Community Proposals

a. Anyone can make a proposal at any time for the use of Community pool funds for a proposed purpose.

i. Publish a draft proposal with purpose, description, benefit, risks, cost of implementation, downside risk and stake 5000 SOLVE tokens on the proposal

1. Community can vote to increase minimum proposal stake

b. Steering committee will review and rate the proposal on three criteria: value, risks and cost

i. If approved by committee, proposal goes to public vote

1. Steering committee will set duration, quorum and majority

a. Duration: Minimum 3 days

b. Quorum: Number of Care.Wallets that must vote for vote to be valid. Minimum 1000 CW

c. Majority: What % of votes in favor for proposal to pass. Minimum 50% + 1 vote

d. Steering committee may set higher stake requirements for vote to proceed to community

i. Proposer deposits higher stake, proceed to vote

ii. Proposer declines, proposal canceled, stake returned

ii. If denied by committee, proposer loses half the stake which will be deposited into the community pool

c. Community can ask questions about proposals

i. What happens if the proposer does not answer questions?

1. Loses part of stake which will become part of community pool

ii. What happens if community wants more time

1. Steering committee can extend the time

c) Voting

a. Community votes on the proposal using Care.Wallet

i. Vote happens in an open community Care.Network

ii. Voting model is 1 CW = 1 vote

iii. CW must hold 100 SOLVE to vote

b. Notifications sent to network participant

i. When deadline is approaching

ii. If duration is extended

iii. Results of the vote

c. If proposal passes, steering committee is tasked with execution

d. If proposal fails, proposer loses stake which will become part of community pool

d) Proposal Execution

a. Steering committee is responsible for execution of proposal

b. Committee is authorized to incur expenses and to assign proper resources

c. Committee will disburse funds from community pool for execution

d. Committee will report on progress and outcome

e) All proposals and voting results will be public and published in various channles and social media

f) Governance shall initially use Aragon DAO platform

a. Community shall determine if different or additional governance tools are needed

2. Community pool

SOLVE 2.0 introduces a community pool, which can be used for defined purposes via proposals and community votes.

Community pool is funded by revenue from network node fees (per node per month) and gas fees (per event). Community pool shall receive 15% of node fees and 15% of gas fees.

Community pool shall also receive revenue from proposals since proposals requires certain amount of tokens to be staked and this stake may be forfeited and will be deposited into the community pool. All community pool transactions shall be public and updated regularly.

2.1 Proposed uses of the community pool

a) Liquidity — Funds to be used for accessibility of SOLVE. Community can create and vote on proposals to increase liquidity on decentralized trading platforms or use funds to get SOLVE added to centralized trading platforms.

b) New networks and wallets — The purpose of this fund is to launch new networks, incentivize wallet holders, customer acquisition and much more. The community can vote to launch a network of their choice or for further growth of an existing network.

c) Marketing and bounties — Community can vote to go after influencers, create specific localized marketing campaigns for networks and fund bounties to find bugs and issues.

d) Technical initiatives- Developers can propose funds for building platform extensions, blockchain tools like scanners or to build additional dApps on the network.

e) Other initiatives — A general-purpose fund that allows initiatives not yet thought of or for future endeavors as the platform grows. Community will vote to approve all proposals

f) Staking rewards — This fund can be used for increasing staking rewards for specific networks or to use on a new network to reach the minimum proof of stake threshold.

3. Stake into networks

All networks (a.k.a. Care.Networks) on Care.Platform now require a minimum stake for the network to operate. This ensures that there are no bad actors creating networks on Care.Platform and facilitates efficient launch of good networks.

Staking into networks can allow stakers to earn rewards, share of network revenue and other incentives, as determined by network sponsors and approved via community vote. Each network sponsor will set the terms of staking in the network and community shall vote to approve all staking programs. Stakers will be able to choose which network to stake their tokens based on terms of offer and certain restrictions (see Appendix A)

a) Proof-of-stake for networks is designed to secured networks by having SOLVE token stake that protects against issues with network design, compliance and proper use of data.

a. Network sponsor must deposit the stake prior to network going live on Care.Platform

b. Minimum network stake 25,000 SOLVE or $25,000 worth of SOLVE if SOLVE price is > $1.00

b) Stake protects against the following scenarios

a. Network misuses user data (without consent or for purpose other than stated in network joining terms)

b. Network harms users with improper services or products that it did or should have known will cause harm to users

c) Per Wallet Stake

a. Additional stake amount per wallet for a network. Users can opt to stake into these networks to help them grow. Users who stake will earn a portion of the revenue generated from the network as defined by the network sponsor and approved by the community

b. As more Care.Wallets join, a network will grow in size and simultaneously the risk to users will also grow. So, networks are required to stake additional SOLVE per wallet participating in the network as follows:

i. First 5000 wallets, 100 SOLVE or $10 worth of SOLVE, whichever is lower

ii. Next 10000 wallet, 75 SOLVE or $7.5 worth of SOLVE, whichever is lower

iii. Next 35000 wallets, 50 SOLVE or $5 worth of SOLVE, whichever is lower

iv. All additional wallets, 25 SOLVE or $2.5 worth of SOLVE, whichever is lower

c. Per Wallet stake is added to the staking pool

d) Whistleblower proposal

a. Anyone can file a whistleblower complaint against a network via a proposal and required proof of harm or proof of misconduct and must stake tokens

i. If proposal passes by community vote, network will be penalized via a combination of actions

1. Set penalty amount from stake

2. Whistleblower gets 20% of penalty amount plus proposal stake

3. Replenish and/or increase stake to continue

4. Suspend network temporarily till issue resolved

5. Terminate network permanently

ii. If proposal fails by community vote, whistleblower stake will be lost

4. Liquidity provider Incentives

Anyone can setup a liquidity pool for SOLVE on any decentralized trading platform, provide liquidity to an existing liquidity pool and earn trading fees.

Anyone can make a proposal for use of community pool funds for creating a new pool, adding liquidity to an existing pool or offering incentives to liquidity providers. A liquidity pool proposal shall follow standard proposal process and shall include the following information:

1. Justification and rationale for the pool

2. Platform where pool will exist

3. Pair (e.g. SOLVE-MATIC, SOLVE-ETH, SOLVE-SOL etc.)

4. Amount of liquidity or amount of incentives offered

5. Budget, timelines and milestones

6. Key performance metrics

Steering committee shall review liquidity proposal and approve it for community vote, or reject it or request clarification or adjust pool parameters. If the community votes to approve the proposal, steering committee is responsible for ensuring proper use of community pool funds.

5. New networks and wallet-holders

Supporting new networks and expanding the number of wallet holders (Care.Wallets) is a priority of the community and a key governance mandate for the community. The community pool can be allocated towards new networks and wallet acquisitions via proposals and community vote. When a proposal is approved by the community, funds can be deployed by the steering committee to support approved networks and to run campaigns that educate, engage and incentivize users to adopt the Care.Wallet.

Anyone can make a proposal for a new network or enhance an existing network, and request community funds. A network proposal shall follow standard proposal process and shall include the following information:

1. Network purpose and description
2. Network services and services providers (including products)
3. Revenue model and revenue share into community pool
4. User data collection model including custody, use and security
5. Expected number of wallet holders for Y1, Y2 and Y3
6. Distribution channels and plan
7. Proposed network stake, per wallet stake and incentives for stakers

Steering committee shall review network proposal and approve it for community vote, or reject it or request clarification or increase required stake amounts. If the community votes to approve such a network, steering committee is responsible for ensuring proper use of funds to launch the network.

Similarly, anyone can make a proposal to expand number of wallet holders via a campaign or partnership or other means. A wallet proposal shall follow standard proposal process and shall include the following information:

1. Campaign purpose and description
2. Channels and partners
3. Target number of new wallet holders
4. Duration, milestones, key metrics
5. Budget and payment schedule
6. Use of funds
7. Proposed staking terms and incentives, if applicable

Steering committee shall review wallet campaign proposal and approve it for community vote, or reject it or request clarification or increase required stake amounts. If the community votes to approve such a campaign, steering committee is responsible for ensuring proper use of funds to execute the campaign.

6. Support SOLVE-MATIC pool (Quickswap)

SOLVE 2.0 includes allocation of tokens for incentivizing the liquidity pool on Quickswap for SOLVE-MATIC pair. 2M SOLVE tokens are proposed to be allocated from the SOLVE treasury for incentives, to be distributed over the course of 12 months. Steering committee shall be responsible for proper use of funds for incentives for liquidity providers to this pool. Community may allocate funds community pool for additional incentives and/or extending duration of incentives, via proposal and voting process.

7. Retiring old governance mechanism (DCARE)

One concern repeatedly raised by the, especially the SOLVE community in Korea, is related to a previous governance token called DCARE. The community staked SOLVE tokens to receive DCARE governance tokens. However, DCARE is currently not used for governance, leading to dissatisfaction in the community.

SOLVE 2.0 proposes to allocate sufficient tokens to compensate DCARE holders and retire DCARE. This will not only satisfy the community, especially the Korean community members, but also make implementation of new staking and governance model easier.

There are approximately 550,000 circulating DCARE tokens. The proposal authorizes DCARE holders to be compensated with an airdrop of 3 SOLVE / DCARE and to retire the DCARE token. This proposal requires release of additional SOLVE tokens from the treasury and will impact the circulating supply of SOLVE.

8. Roadmap for SOLVE 2.0 Tokenomics Implementation

SOLVE 2.0 proposes that steering committee adopt an aggressive plan for implementation with the following key milestones:

Milestone 1: Wallet Acquisitions — Immediate

Milestone 2: Farming

Milestone 3: DCARE

Milestone 4: Proof-of-stake Networks and Staking

Milestone 5: Community Pool

Milestone 6: Governance and Voting

Milestone 7: Remaining items

9. Token Release Schedule Changes

SOLVE 2.0 proposes several initiatives before community pool has accumulated any significant funds. This can be accomplished only by changing the previous token release schedule and release additional tokens over the next 3–4 months. Specifically, SOLVE 2.0 calls for release of 145M million tokens in 2024 instead of the previous schedule authorizing 45M tokens to be released between now and end of 2024, a net increase of 100M tokens over the previous schedule.

9.1 Previous Release Schedule

9.2 New Release Schedule

SOLVE token release schedule will be modified to release 145M SOLVE tokens in 2024 instead of the previous release schedule of 45M between April 1 — Dec 31, 2024.

10. Impact on circulating token supply

Over the past month, the community (both Korean and global) has been engaged in updating the SOLVE tokenomics. Unsurprisingly, community is excited and energized about these changes.

Wallet analysis shows that 90% of SOLVE holders have held SOLVE for more than a year and only 1% token-holders hold SOLVE for less than a month (src). These statistics show that community is ready to take on a greater role in governing as enabled by SOLVE 2.0 proposal.

With community engagement and community approved staking options, it is reasonable to expect that large number of SOLVE will be staked and effective circulating supply will be reduced.

SOLVE 2.0 allows for additional SOLVE tokens to be released from the treasury to allow for implementation of the new tokenomics and to support various community initiatives in the near term.

Summary

SOLVE 2.0 empowers and creates multiple new avenues for the community to participate in network revenue and benefit from growth in number of wallets. SOLVE 2.0 also opens multiple new options for token holders to stake and earn incentives. SOLVE 2.0 enables every community member to participate in governance and have their voice heard. SOLVE 2.0 is designed to have a very positive impact on SOLVE token price and SOLVE circulating supply while dramatically increasing the number of token-holders.

PLEASE NOTE: SOLVE 2.0 tokenomics will evolve based on feedback from community and the Steering Committee. Therefore, this document will updated and re-published as and when appropriate and community shall be notified of the new version

Appendix A: Restrictions on staking

Due to regulatory uncertainty, staking will not be available to residents of Afghanistan, Belarus, Bosnia and Herzegovina, the Central African Republic, Cuba, the Democratic Republic of Congo, the Democratic People’s Republic of Korea (North Korea), Eritrea, Ethiopia, Guinea Bissau, Iraq, Iran, Libya, Lebanon, Russia, Somalia, Sudan, South Sudan, Syria, the USA, Uganda, Vanuatu, Yemen and Zimbabwe or any other jurisdiction in which accessing or using staking platforms is prohibited (“Prohibited Jurisdictions”). In using the SOLVE staking platform, stakers will need to confirm that they are not located in, incorporated, or otherwise established in, or a citizen or resident of, a Prohibited Jurisdiction.

SOLVE Tokenomics 2.0 Release was originally published in Solve.Care on Medium, where people are continuing the conversation by highlighting and responding to this story.