VICE TOKENOMICS

The term “tokenomics” is a combination of two words, “token” and “economics”, that is generally used to describe the economic principles and behaviors of a blockchain. The “token” part of the tokenomics portmanteau refers to the native token (or native coin) of the blockchain. On Vicelabs, the native coin is Vice, which acts as the currency of the network. Vice also pays for the computational cost of transactions (gas fees) and storage on the network.

Proof of stake

Vice uses a proof-of-stake (PoS) consensus mechanism. This means that validators (entities that validate transactions) lock up a certain amount of Vice as collateral (stake). They then earn rewards for processing operations. Users of the network hold their own Vice, which they can delegate to the validators of their choice as part of the validators’ stakes. In so doing, the validators reward users based on the amount of Vice they delegate. Users are free to withdraw their Vice or to change their selected validator when the epoch changes.

Stake holders

Stakeholders in a blockchain’s tokenomics have a vested interest in the viability of the blockchain economy. The EXOS economy has three main groups of stakeholders:

  • Users submit transactions to the Vice platform to create, mutate, and transfer digital assets or interact with more sophisticated applications enabled by smart contracts, interoperability, and composability.
  • Vice token holders have the option of staking their tokens to validators and participating in the proof-of-stake mechanism. Vice owners also hold the rights to participate in Vice governance.
  • Validators manage transaction processing and execution on the Vice platform.

Vice koin

As mentioned, the native coin of Vicelabs  is Vice . The coin uses the capitalized version of Vice to distinguish the coin from the Vice network. A sound policy to govern the native coin on a blockchain ensures stability and encourages growth. The Vice tokenomics structure is designed to support the long-term financial needs of Web3, not get-rich-quick schemes that have plagued the industry in the past.

The Vice coin serves four purposes on the Vice network:

  • You can stake Vice to participate in the proof-of-stake mechanism.
  • Vice is the asset denomination needed to pay the gas fees required to execute and store transactions or other operations on the Vice network.
  • You can use Vice as a versatile and liquid asset for various applications, including the standard features of money – a unit of account, a medium of exchange, or a store of value – and more complex functionality smart contracts enable, interoperability, and composability across the Vice ecosystem.
  • Vice coins play an important role in governance by acting as a right to participate in on-chain voting on issues such as protocol upgrades.

Supply Vice

The total supply of Vice tokens on Mainnet is capped at 2,000,000,000 VICE (two billion). This is the total number of Vice that can ever be minted, but the total supply is not available for transactions. Supply availability follows the designed unlocking schedules in place to enhance the tokenomics stability of the network and provide a long-term level of security.

There is a finite supply of Vice. The balance must support all economic activities to scale as more and more people migrate to the Vice platform. In addition, the presence of a storage fund creates important monetary dynamics, in that higher on-chain data requirements translate into a larger storage fund, reducing the amount of Vice in circulation.

Distribution

At the beginning of each epoch, three important events happen:

  • Vice holders stake (some) of their tokens to validators and a new committee is formed.
  • The reference gas prices are set as described in Vice Gas Pricing.
  • The storage fund size is adjusted using the net inflow of the previous epoch.

Following these actions, the protocol computes the total amount of stake as the sum of staked Vice plus the storage fund.

During each epoch, users submit transactions to the Vice platform and validators process them. For each transaction, users pay the associated computation and storage gas fees. In cases where users delete previous transaction data, users obtain a partial rebate of their storage fees. Validators observe the behavior of other validators and evaluate each other’s performance.

At the end of each epoch, the protocol distributes stake rewards to participants of the PoS mechanism. This occurs through two main steps:

  • The total amount of stake rewards is calculated as the sum of computation fees accrued throughout the epoch plus the epoch’s stake reward subsidies. The latter component is temporary in that it will only exist in the network’s first years and disappear in the long run as the amount of EXOS in circulation reaches its total supply.
  • The total amount of stake rewards is distributed across various entities. The storage fund is taken into account in the calculation of the epoch total stake, which is not owned by any entities in the way that staked Vice is. Instead, the Vice economic model distributes the stake rewards accruing to the storage fund to validators for compensation of their storage costs.