sonr/docs/guides/economics/utility.mdx

---
title: Utility
description: Use cases and utility functions of the SNR token including staking, governance, and network operations
sidebarTitle: "Network Utility"
icon: "cog"
---

## Overview

The SNR token serves as the native utility token of the Sonr network, enabling various functions from transaction processing to governance participation. Its multi-faceted utility design ensures sustained demand and value accrual.

<Note>
  The SNR token's utility is designed to grow with the network, adding new use
  cases as the ecosystem expands while maintaining core functions for network
  security and operations.
</Note>

## Core Utilities

### 1. Means of Payment

The primary utility of SNR is facilitating transactions across the Sonr blockchain for user account management and application operations.

<CardGroup>
  <Card title="Transaction Fees">
    All on-chain operations require SNR for gas fees and computational resources
  </Card>
  <Card title="Service Payments">
    Payment for Highway services, storage, and off-chain computation
  </Card>
  <Card title="Application Fees">
    Developers pay SNR to register and update applications on the network
  </Card>
</CardGroup>

### 2. Staking Mechanisms

SNR tokens enable network security and participation through various staking options:

#### Validator Staking

- **Minimum Stake**: Required SNR deposit to run a validator node
- **Delegated Staking**: Users can delegate SNR to validators for rewards
- **Slashing Protection**: Validators must maintain good behavior or risk stake loss

#### Service Node Staking

- **Highway Nodes**: Stake required for running Highway service nodes
- **IPFS Storage**: Minimum stake for operating storage infrastructure
- **Availability Guarantee**: Staking ensures node uptime and reliability

<Warning>
  Staking locks tokens for a specified period, reducing circulating supply while
  earning rewards for network participation.
</Warning>

### 3. Governance Participation

SNR tokens grant voting power in the decentralized governance system:

<CardGroup>
  <Card title="Proposal Creation">
    Stake SNR to submit governance proposals with anti-spam mechanisms
  </Card>
  <Card title="Voting Rights">
    One token equals one vote in governance decisions
  </Card>
  <Card title="Participation Rewards">
    Earn SNR for active governance participation and quality proposals
  </Card>
</CardGroup>

## Module-Specific Operations

### Service Module (x/svc)

SNR tokens are required for service operations within the decentralized service marketplace:

- **Service Registration**: Pay SNR registration fees to claim unique TLD domains (e.g., `music.sonr`, `defi.sonr`)
- **Capability Requests**: SNR deposits for requesting root capabilities via MPC signing
- **Service Updates**: Fees for modifying service metadata or requesting additional permissions
- **TLD Management**: Economic safeguards prevent domain squatting through registration fees

<Note>
  Service registration fees are burned or sent to the community pool based on
  governance parameters, creating deflationary pressure.
</Note>

### DWN Module (x/dwn)

The DWN module enables revolutionary gasless onboarding while using SNR for advanced operations:

- **Gasless Vault Claiming**: Initial `MsgClaimVault` transactions require no SNR fees
- **Vault Configuration**: SNR fees for updating vault settings and WASM runtime upgrades
- **MPC Operations**: Transaction fees for multi-party computation within secure enclaves
- **Cross-Chain Operations**: SNR payments for bridging assets and multi-chain vault management

### UCAN Module (x/ucan)

Authorization operations require SNR for security and spam prevention:

- **Root Capability Issuance**: SNR fees for initiating MPC threshold signing requests
- **Revocation Processing**: Transaction fees for on-chain capability revocations
- **Delegation Chain Verification**: Computational costs for validating complex authorization chains
- **MPC Signing Participation**: Validator rewards for participating in multi-party computation

### DID Module (x/did)

Identity operations use SNR for registration and management:

- **DID Registration**: Fees for creating new decentralized identifiers
- **Authentication Linking**: SNR costs for adding WebAuthn credentials or other auth methods
- **Assertion Management**: Fees for linking/unlinking identity claims and verifications
- **Transaction Execution**: SNR payments for UCAN-authorized transactions on behalf of DIDs

## Economic Mechanisms

### Demand Drivers

The token's value is driven by multiple demand sources:

```math
\text{Demand} = \text{Transaction Volume} + \text{Staking Locked} + \text{Governance Participation}
```

<CardGroup>
  <Card title="Network Growth">
    More users and applications increase transaction demand
  </Card>
  <Card title="Staking Returns">
    Attractive yields encourage long-term token locking
  </Card>
  <Card title="Utility Expansion">
    New features and services create additional use cases
  </Card>
</CardGroup>

### Supply Dynamics

Effective supply is reduced through:

- **Staking Lockups**: Validators and delegators lock tokens
- **Governance Stakes**: Proposal creation requires token deposits
- **Service Collateral**: Service providers stake SNR for TLD registration
- **Fee Burns**: Partial fee burning reduces total supply

## Developer Incentives

### Service Development

- **Service Registration Subsidies**: Reduced TLD domain costs for verified developers
- **Root Capability Grants**: Free MPC signing for approved service capabilities
- **Revenue Sharing**: Earn portion of service interaction fees through UCAN delegation
- **Integration Support**: Subsidized vault interaction costs for new services

### Infrastructure Provision

- **Validator Operations**: SNR staking rewards for consensus participation and MPC signing
- **MPC Node Operations**: Additional rewards for multi-party computation services
- **IPFS Storage**: Compensation for decentralized vault configuration storage
- **UCAN Verification**: Fees for running delegation chain validation services

<Check>
  The SNR token creates a sustainable economic model where users, developers,
  and infrastructure providers all benefit from network growth.
</Check>

## Future Utilities

### Enhanced Module Features

- **Advanced UCAN Features**: Zero-knowledge capability proofs and cross-chain validation
- **Vault Upgrades**: Seamless WASM runtime updates and social recovery mechanisms
- **Service Marketplace**: Categorized service discovery with reputation systems
- **Multi-sig Services**: Shared service ownership through DAO governance

### Cross-Chain Integration

- **IBC UCAN Verification**: Cross-chain capability validation fees
- **Multi-Chain Vault Operations**: Enhanced cross-chain asset management
- **Bridge Service Registration**: Specialized TLD domains for bridge operators
- **Interchain DID Resolution**: Cross-chain identity verification services

### Privacy and Security Enhancements

- **Privacy-Preserving MPC**: Enhanced secure multi-party computation features
- **Conditional Revocations**: Time or event-based capability revocations
- **Hardware Vault Support**: Integration with dedicated secure hardware
- **AI-Powered Workflows**: Natural language vault command processing

## Utility Summary

The SNR token's utility encompasses:

1. **Essential Operations**: Core network functions and transactions
2. **Security Provision**: Staking for network consensus and safety
3. **Governance Rights**: Democratic participation in protocol decisions
4. **Economic Incentives**: Rewards for valuable contributions
5. **Access Control**: Gateway to premium features and services

This comprehensive utility design ensures the SNR token remains central to the Sonr ecosystem's growth and sustainability.