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Feat/add networks (#1303)
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Prad Nukala
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---
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title: Distribution
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description: SNR token distribution model, allocation strategy, and economic distribution mechanisms
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sidebarTitle: "Supply & Distribution"
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icon: "chart-pie"
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---
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## Overview
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The SNR token distribution is designed to balance immediate network needs with long-term sustainability, ensuring fair allocation across stakeholders while maintaining sufficient reserves for ecosystem growth.
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**Total Supply: 1,000,000,000 SNR**
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<Note>
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Token distribution follows a carefully planned vesting schedule to prevent
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market manipulation and ensure aligned incentives across all participants.
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</Note>
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## Supply Dynamics
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### Circulating Supply Factors
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The circulating token supply depends on several key factors:
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<CardGroup>
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<Card title="Initial Circulation">
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200M SNR at genesis (20% of total supply)
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</Card>
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<Card title="Minted Tokens">
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New tokens created through inflation for rewards and subsidies
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</Card>
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<Card title="Vesting Releases">
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Scheduled releases from locked allocations over time
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</Card>
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<Card title="Staked Tokens">
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Tokens locked in staking reducing effective circulation
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</Card>
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</CardGroup>
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### Token Velocity
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Token velocity measures how frequently tokens change hands and directly impacts token value:
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```math
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\text{Token Value} = \frac{\text{Economic Activity}}{\text{Circulating Supply} \times \text{Velocity}}
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```
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## Allocation Strategy
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### Core Allocations
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The token distribution prioritizes long-term network health through strategic allocations:
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1. **Community & Ecosystem** (35% - 350M SNR)
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- Airdrop Program: 100M SNR (10%)
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- Testnet Incentives: 50M SNR (5%)
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- Staking Rewards Pool: 100M SNR (10%)
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- Ecosystem Grants: 100M SNR (10%)
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2. **Team & Advisors** (20% - 200M SNR)
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- Team Allocation: 150M SNR (15%)
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- Advisors: 50M SNR (5%)
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3. **Investors** (25% - 250M SNR)
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- Seed Round: 75M SNR (7.5%)
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- Series A: 100M SNR (10%)
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- Strategic Round: 75M SNR (7.5%)
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4. **Foundation Treasury** (15% - 150M SNR)
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- Operations: 75M SNR (7.5%)
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- Reserve Fund: 75M SNR (7.5%)
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5. **Validator Incentives** (5% - 50M SNR)
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- Genesis Validators: 30M SNR (3%)
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- Delegation Program: 20M SNR (2%)
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### Vesting Schedules
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<Warning>
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All non-circulating allocations follow strict vesting schedules to ensure
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gradual market entry and prevent supply shocks.
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</Warning>
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#### Team Vesting
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- **Team**: 12-month cliff, 48-month linear vest
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- **Advisors**: 6-month cliff, 24-month linear vest
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- No transfers until cliff periods expire
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#### Investor Vesting
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- **Seed Round**: 6-month cliff, 36-month linear vest
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- **Series A**: 3-month cliff, 24-month linear vest
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- **Strategic Round**: 25% immediate, remainder over 18 months
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#### Community Vesting
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- **Airdrop**: 25% immediate, 75% over 12 months
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- **Testnet**: Distribution over 6-month testnet period
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- **Ecosystem Grants**: Project milestone-based releases
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#### Foundation Vesting
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- **Operations**: 10% at genesis, 90% over 5 years
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- **Reserve Fund**: Minimum 3 years lockup, governance approval required
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## Inflation Mechanism
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### Reward Distribution
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The network implements controlled inflation to incentivize participation:
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<CardGroup>
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<Card title="Validator Rewards">
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Block rewards for consensus participation distributed pro-rata to stake
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</Card>
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<Card title="Highway Services">
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Compensation for off-chain computation, storage, and routing services
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</Card>
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<Card title="Governance Rewards">
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Incentives for proposal creation and voting participation
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</Card>
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</CardGroup>
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### Inflation Schedule
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**Year 1**: 15% inflation (aggressive growth)
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- Focus on network bootstrapping
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- High rewards for early adopters
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**Year 2**: 12% inflation (continued expansion)
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- Stabilization period begins
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- Balanced growth incentives
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**Year 3**: 9% inflation (stabilization)
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- Network maturation
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- Sustainable reward levels
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**Year 4+**: 7% inflation (long-term sustainability)
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- Minimal dilution
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- Self-sustaining economics
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## Economic Safeguards
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### Anti-Manipulation Measures
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1. **Vesting Cliffs**: Prevent immediate dumps from large holders
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2. **Staking Lockups**: Reduce liquid supply through validator requirements
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3. **Governance Delays**: Time-locked treasury withdrawals
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4. **Slashing Penalties**: Discourage malicious validator behavior
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### Supply Controls
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The network implements several mechanisms to manage token supply:
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- **Fee Burning**: 50% of transaction fees burned (deflationary)
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- **Treasury Management**: Governance-controlled minting caps
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- **Dynamic Rewards**: Adjustment based on network participation
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- **Lock Incentives**: Higher rewards for longer staking periods
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### Centralization Risks
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- No single entity controls >20% at genesis
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- Team tokens have longest vesting (4 years)
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- Foundation treasury requires governance approval
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- Validator set caps prevent concentration
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### Market Stability
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- Staggered vesting prevents supply shocks
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- Fee burning provides deflationary pressure
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- Utility demand from identity services
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- Cross-chain value capture mechanisms
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## Token Utility & Value Accrual
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### Primary Utilities
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<CardGroup>
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<Card title="Network Security">
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Staking for validation and delegation
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</Card>
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<Card title="Governance">
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Voting on protocol upgrades and parameters
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</Card>
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<Card title="Transaction Fees">
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Gas payments for network operations
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</Card>
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<Card title="Identity Services">
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Premium features and API access
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</Card>
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</CardGroup>
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### Value Accrual Mechanisms
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1. **Fee Burning**: 50% of transaction fees burned (deflationary)
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2. **Staking Yield**: 7-15% APR depending on network participation
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3. **Identity Revenue**: Enterprise licensing fees distributed to stakers
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4. **Cross-chain Value**: IBC transfer fees and bridge operations
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### Staking Targets
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- **Target staking ratio**: 65%
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- **Validator set**: 50-100 active validators
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- **Minimum stake**: 1M SNR (0.1% of supply)
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- **Delegation minimum**: 1 SNR (accessible to all)
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### Vesting Schedule Overview
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| Category | Immediate | 6 Months | 12 Months | 24 Months | 36 Months | 48 Months |
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|----------|-----------|----------|-----------|-----------|-----------|-----------|
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| Airdrop | 25% | 50% | 75% | 100% | - | - |
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| Team | 0% | 0% | 12.5% | 37.5% | 62.5% | 100% |
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| Seed Investors | 0% | 0% | 16.7% | 50% | 83.3% | 100% |
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| Series A | 0% | 25% | 50% | 100% | - | - |
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| Foundation | 10% | 28% | 46% | 64% | 82% | 100% |
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<Check>
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The distribution model prioritizes network security, ecosystem growth, and
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fair participant rewards while maintaining economic sustainability.
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</Check>
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## Distribution Timeline
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### Pre-Launch (Months -6 to 0)
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- Team allocation locked
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- Investor funds raised
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- Testnet incentives distributed
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- Airdrop snapshot taken
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### Genesis (Month 0)
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- 200M SNR circulating supply
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- Genesis validators receive allocation
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- Foundation treasury initialized
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- Staking rewards begin
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### Year 1 (Months 1-12)
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- Airdrop vesting releases 75M SNR
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- Team cliff expires, vesting begins
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- Series A completes vesting
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- Ecosystem grants distributed
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### Year 2-3 (Months 13-36)
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- Seed round completes vesting
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- Team reaches 62.5% vested
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- Foundation operations fully unlocked
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- Validator program matured
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## Economic Incentives
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### Genesis Validator Program
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- **Genesis Validators**: 30M SNR (3%)
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- 50 validators × 600,000 SNR each
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- 24 months minimum staking lockup
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- 99%+ uptime and governance participation required
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### Delegation Program
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- **Foundation Delegations**: 20M SNR (2%)
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- 6-month renewable terms
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- Performance-based allocation
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- Support for high-performing validators
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### Maturity Phase (Year 3+)
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- Stabilized inflation rate
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- Self-sustaining economics
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- Community-driven allocation
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## Success Metrics
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### Year 1 Targets
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- 50% of supply staked
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- 50+ active validators
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- 100k+ active addresses
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- $10M+ in identity service revenue
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### Year 3 Targets
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- 65% of supply staked
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- 75+ active validators
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- 1M+ active addresses
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- $100M+ total value locked
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### Long-term Vision (5+ years)
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- Self-sustaining network economics
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- Deflationary token model
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- Industry-standard identity infrastructure
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- Billion-dollar ecosystem value
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## Transparency Commitments
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All token distributions are:
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- Publicly verifiable on-chain
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- Subject to regular audits
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- Reported in quarterly updates
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- Governed by smart contracts
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