Updated: Aug 23, 2022
BLOG UPDATE 22.08.22
We are updating our originally proposed Tokenomics 2.0 model.
Please read for most up to date information:
Due to ever-changing market conditions and the general evolution of the wider industry, our team will be making some changes to the tokenomics model outlined in our original blog below.
During this BETA stage, a total of 1.4 Million MYST tokens have been staked in the Mysterium Delegation Pool.
Our analysis from this test phase has shown us much-needed insights to adapt the model and ensure that we increase the shared value of the wider network, with a goal to enhance rewards for our community of token holders and nodes.
We will be introducing the following changes to our proposed tokenomics model:
There will be no staking of MYST required for node runners
DAI will not be introduced as a payment currency
Delegation Pool rewards will be generated from Mysterium’s collected network fees (Hermes smart contract fees), and redistributed to those who stake in the Delegation Pool
With these updates, we believe we are both simplifying the model and making greater improvements that creates wider value distribution among all MYST holders.
Check out the current delegation pool stats, and to see how much you can earn on your stake.
We will be following up with more details of the fully revised model in the following months.
Original blog published 13.01.2022
Do you HODL MYST? Then you’ve come to the right place.
Today we’re levelling up your MYST experience, unlocking a new level: DeFi.
This BETA Pool will give token holders a taste of Mysterium’s upcoming, revamped Tokenomics 2.0 model, when holders can rent out their MYST to node runners and earn DAI rewards.
Until then, all BETA rewards will be paid in MYST.
In order to mark this occasion, the IQ Protocol and Mysterium communities are getting together and hosting two events: First is an AMA in the IQ Protocol Discord channel on Monday, January 17 at 14:00 UTC, and the second is a Twitter Spaces discussion on IQ Protocol and Mysterium's Twitter account, on Wednesday, the 19th of January at 13:00 UTC. Please join us for both!
So what’s new?
The IQ Protocol launched in BETA in June, and Mysterium will be the first external project to take advantage of its “collateral-less, risk-free asset renting and staking possibilities.”
Mysterium’s testnet version of the pool allows MYST holders to delegate (rent out) their tokens using the IQ Protocol dashboard. You’ll then earn rewards on the tokens that are rented.
This BETA period also allows us to test the mechanics and economics so we can fine-tune the experience and parameters, making our full 2.0 version bullet-proof.
What makes the IQ Protocol so unique?
The Protocol brings the power of DeFi to non-DeFi projects.
The innovation facilitates a subscription model for service-based blockchain projects, such as Mysterium, where our nodes offer VPN and proxy services by the minute and gigabyte.
MYST holders can delegate (rent out) their tokens for a predefined time to renters (node runners) – for a fee. This will function similarly to a daily or monthly subscription, and where the magic of the IQ Protocol really kicks in.
This introduction of the Mysterium Delegation Pool creates a new revenue stream for all MYST token holders. By depositing MYST into the pool, token holders will be able to earn passive income similarly to other DeFi protocols, such as Compound or Aave.
It also removes the requirement of upfront collateral, mitigating the typical risks associated with DeFi participation.
There are over 30+ projects in the pipeline looking to deploy the Protocol.
The 2.0 Model - What to Expect From Mysterium Tokenomics 2.0
Our full Tokenomics 2.0 model (coming later this year) will create new opportunities for both node runners and token holders, who can put their funds to work through staking to earn rewards.
The model will also introduce the DAI stablecoin as a means of payment in the network, eliminating the negative effect of cryptocurrency fluctuations for both dVPN users and node runners.
dVPN users will continue to pay with a range of other cryptocurrencies, while node runners will only receive their earnings in DAI.
With the full launch, node runners will also need to stake MYST in the network in order to provide their dVPN services. The amount of DAI that can be earned depends on the amount of MYST at stake, which is proportional to the desired value of their daily rewards.
The more at stake, the higher a node runner’s earning potential. In this way, the MYST token becomes a life-time subscription to Mysterium Network.
You can read all about Tokenomics 2.0 here.
What rewards will I receive on my stake?
MYST holders are invited to stake their MYST and earn rewards.
In the BETA version, all rewards will be paid in MYST, rather than DAI. This allows us to manage and assess the economic model, participation and competitiveness before its full launch.
The complete model is based on supply (holders who rent their MYST) and demand (Mysterium nodes).
Demand for staked tokens comes from nodes who must stake MYST in order to provide their services in the network. If they don’t have the required amount of MYST needed, they can rent tokens from the delegation pool.
During this BETA phase, our Hermes payment system is covering the required stake for all node runners. The renting bot will calculate and learn how much nodes will need to stake once Tokenomics 2.0 is live, based on payments volume in the network, and will rent the needed tokens from the delegation pool.
Our Hermes smart contract has been updated to work directly with the IQ Protocol pool, guaranteeing a non-custodial fee redistribution. This limits the risk usually associated with a typical lending platform or liquidity pool, such as risk of liquidation or risk of impermanent loss.
From this BETA period, we can measure contributions and activity, and eventually provide better estimations for reward APY.
Once the full version of our Tokenomics 2.0 is live, the rewards that each participant receives will fluctuate based on the size of the pool and network activity. The more users, the more rewards that can be earned by exit nodes and token delegators.
For reference, the IQ Protocol has seen more than 50 million PRQ in total value locked (TVL) since its launch less than six months ago, generating more than 300,000 PRQ in rental fees.
While we can’t specify a percentage APY with clear release schedules, note that many staking solutions are inflationary by design, and rarely viable long term, as you will need a constant influx of new users to maintain consistent rewards.
IQ Protocol is designed as non-inflationary, as yields are generated from real-world usage, so is not necessarily influenced by market downturns or volatility.
We intend to adapt and enhance the tokenomics design over the months and years based on industry trends and changes. We want to introduce additional advantages for Web3 resource sharing and staking in the network.
For now, you can get started with the Delegation Pool using the IQ Protocol’s simple dashboard.
You’ll just need a MetaMask wallet and Polygon compatible MYST, so you can easily deposit your tokens in the pool.
About IQ Protocol
IQ Protocol is a decentralized money market for digital asset renting and on-chain subscriptions. The next money lego that allows users to rent wrapped expirable versions of digital assets without collateral for their utility, while allowing holders to earn by providing liquidity without risk.