Token Economy
The TwigX Token Economy was meticulously designed with the assistance of 01x
Token Economy
TwigX actively rewards users for specific behaviors using the TwigX token to cultivate a strong community and user base. While there may be many secondary use cases for TwigX that evolve, such as payments and voting, the primary function is designed to reflect the capacity and value of a community’s social and economic activity among Creators and Users. From this, we can derive core utility values which can then be extracted to the platform's own algorithms and discrete incentive modeling.
We envisage the economy with the primary economic stakeholders as Users (consumers) and Creators (suppliers) with adjacent economic actors that would naturally be attracted to any user economic activities that we label Brands. Brands are user / attention acquirers and are drawn to active and commercially valuable networks. The existence of Brands creates an economic ‘Off- take’ and introduces external capital to the model, which ultimately hardens and catalyzes the core economy through this dynamic interdependence.
Platform Rewards
TwigX generates two forms of rewards from the TwigX token. These originate from:
Inflation of the token supply Inflation incentives are allocated to Creators (content), Users (engagement), whitelisted liquidity pools, and the Treasury (Ecosystem fund).
Network fees are generated from protocol-level services. These are allocated dynamically to Creators and the Treasury. A specific example of Network Fees is the Protocol Tax for token transfers, which is up to 1% of the transfer value, depending on the system state. Network fees are distributed to TwigX staking and to the Treasury account.
Network fees are distributed to TwigX staking and the Treasury account.
Utility
The core utility of the TwigX token is a vote-stake function, where Users signal support for Creators. There is a secondary Spectator function that enables a User to share data with a third part in return for extra voting power through token delegation. This derivative utility function conjoins the Brand and User economy without prescribing a fixed relationship and enables a market to evolve that optimises the TwigX economy.
Ecosystem Fund Distributions
The Ecosystem Fund tokens are released following the supply curve and distribution is split into 4 parts.
Whitelisted liquidity pools
Creators
User Engagement Fund
Retained in the Ecosystem Fund
Social Capital
In a traditional Web2 model, communities support projects through social signalling online e.g.
following on social media. They are providing a form of capital, since there is an economic benefit
to the recipient, yet they receive nothing back, other than mainly intangible benefits. Rather, all
the economic benefit accrues to the recipient, the hosting platform and external brands leveraging
this attention economy.
In the TwigX model we capitalise the action of following with the TwigX token.
Here, rather than simply support (or not) as a binary decision with infinite capital,
Users are able to allocate varying quantities of their finite supply of Social Capital
across as many, or as few, Creators as they like, by staking TwigX to specific Creator
pools.
The Social Graph
The transparency of blockchain, when combined with the TwigX social capital model, enables
a much clearer picture can be drawn of network participants' true economic activity. Since
the value of the social capital can be considered as a fair representation of its economic power,
this becomes particularly useful in its own right for external brands to understand, and target,
specific user cohorts with much greater confidence, and subsequent lower cost, than would be
possible in Web2. Even at its most basic level, being able to observe the market value of social
capital deployed for different Creators is a large differentiator for Web3, when compared to the
one-dimensional data points of ‘Influencer with followers’ currently available in Web2.
Discoverability Algorithm
TwigX is developing an algorithm framework that can be customized to each partner platform, to
account for their unique variables and weighting preferences. The discoverability algorithm will
provide a transparent content quality ranking system to allow for creators to be discovered, as the
market sees fit. The algorithm will look at relevance, similar to widely used search algorithms, as
well as social capital (determined solely by the TwigX token). This will include factors such as the
amount or proportion staked to a creator, the number of users staking to a creator, staking periods,
and loyalty of those users. This list of (non-exhaustive) factors aims to foster an ecosystem where
creators are rewarded for their contributions based on authentic engagement and support from
their fans (users).
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