With the Telos bounce.finance swap just around the corner, we have prepared a new post for you all about TLOS tokenomics. Before we get into all that good stuff, here is a short rundown of the bounce.finance swap for anyone new to Telos.
A maximum amount of 20 million TLOS (ERC-20) will be on offer in a single tranche via the bounce.finance decentralised auction house, which equates to approximately 10% of the circulating TLOS supply.The swap aims to raise liquidity to fund the listing on Uniswap and top tier centralised exchanges.
This will be the first and only opportunity to get hold of some ERC-20 TLOS tokens in exchange for ETH, before the launch of TLOS on Uniswap, which will be taking place no later than 24 hours after the close of the swap on bounce.finance.
The ERC-20 tokens available in the swap will be on offer at a higher price than the native TLOS tokens currently available via exchanges such as Cointiger, Probit, and Tswaps. However, the swap price will represent a discount on the Uniswap listing price.
The price of TLOS ERC-20 tokens in the Bounce swap will be announced 24 hours prior to the swap beginning, as will the expected listing price on Uniswap.
You will be able to find the auction live on Bounce Finance only after the time and date mentioned above: https://bounce.finance/.
We can only share the official link once the swap has begun, so stay tuned to our announcement channels!
For all details related to the TLOS liquidity raise via bounce.finance, the Uniswap listing, and how native TLOS and ERC-20 TLOS will interact, read our post on it here.
Before we talk about the tokenomics of TLOS, for those new to the topic of tokenomics let us first understand what tokenomics are, and why they matter.
What are Tokenomics?
Although you won’t find the word tokenomics in the English dictionary, it is a widely used and understood term in the cryptoverse. Simply put, it refers to the supply and demand characteristics of a cryptocurrency (or token).
With well over 6000 different cryptocurrencies available on the open market, understanding tokenomics can help identify the potential value of a token. Any project that doesn’t openly talk about its tokenomics, or consistently fiddles them should be treated cautiously.
Though it is possible for cryptoassets to alter their tokenomics, if it is a truly decentralised system (such as Bitcoin, or Telos), it will require the majority of token holders to agree to implement any change.
Why are tokenomics important?
In short, supply and demand are the name of the game with tokenomics. As with all assets, the slimmer the supply, and the greater the demand, the higher the value.
This is why it is important to understand what the total supply of any crypto is, as well as how much of that supply is currently circulating. It is also essential to know how many tokens will exist in the future and whether there is a plan to create more (i.e. is the token inflationary or deflationary?).
Strong tokenomics combined with a strong fundamental use case for a cryptoasset are two good indicators of intrinsic value.
TLOS is the native utility token of the Telos blockchain; some other well-known blockchain utility tokens include ETH of the Ethereum blockchain and DOT of the Polkadot blockchain. Essentially, TLOS is the lifeblood of the Telos blockchain, powering every transaction, dApps, staking, and more.
TLOS holders, excluding exchanges, can also take part in blockchain governance, powered by Telos Decide™– a governance engine for transparent, immutable, deterministic and user-friendly governance for any case.
Currently, there are over 600,000 TLOS accounts holding Telos on the blockchain, with this number increasing every day.
All TLOS in existence were generated at genesis in 2018, and the maximum supply of TLOS is a mere 355 million.
This means there are far less tokens available (supply) when compared to other blockchains such as EOS (which has an unlimited supply), ADA (which has a max supply of 45 billion), and TRON (with a max supply of over 100 billion). The current rate of inflation is 0%, which could rise to 1% in the future to account for payments to node validators (block producers).
The current circulating supply of Telos tokens is 169 million. The day-to-day operational costs of the network are met through the reserve fund.
There are a number of accounts receiving daily funding for contributing to the growth or operation of the blockchain. These are:
- The Telos Foundation
- The top 21 block producers (node validators)
- The top 21 standby block producers (node validators)
- Core developers
- Telos Works
- REX (Resource exchange that rewards TLOS staking)
- Econddev fund
For a more in-depth dive into the current economic model, please read our medium post : Telos Economic Development Plan 2.0
As the Telos price evolves, the team at Telos are consistently looking to refine the tokenomic model. We are currently in the process of drafting the Telos Economic Development Plan 3 (TEDP3). Once complete it will be introduced and voted on by the Telos token holders.
Where is Telos today (February 23rd, 2021)
The Telos blockchain is decentralised, super-fast (10,000 TPS), scalable and secure. The mainnet has been operational for over 2 years, with over 100 dApps already operating on the blockchain.
Team Telos is currently focussed on rolling out more utility for the blockchain, which you can see in the 2021 technical roadmap, such as additional features; UI/UX upgrades; building bridges to other blockchains, allowing for true and trustless cross-chain interoperability (see the Ethereum Virtual Machine); and more.
Please note, as we write this post (February 23rd, 2021), Ethereum market conditions have been highly volatile. In order to protect TLOS buyers, we may make the strategic decision to delay the bounce.finance swap until market conditions have stabilised. We will keep you updated.