Token Economics

The SFT protocol creates value by providing the liquidity of Staking assets. Stakers can receive rewards while circulating SFT, and the protocol captures the value of each liquidity and feeds the value back to the protocol. SPD is a native digital encryption security utility token of the SFT protocol to provide economic incentives. SPD manages the SFT protocol and plays an important role in the function of the SFT ecosystem.

The generation of each block requires validators to contribute their computing, bandwidth, and storage resources, so SPDs generated by the same block is used to compensate validators for their efforts. At the same time, due to the special design of SC, the protocol will also require upper-layer verifiers to provide security services, such as multi-signature services, light node services, oracle services, etc., and the corresponding services will also be motivated by the distribution of SPD tokens. SPD is an integral part of the SFT protocol because, without SPD, users have no incentive to consume resources to participate in activities or provide services to benefit the entire ecosystem of the SFT protocol.

7.1 Token Model

There are two types of tokens in the SFT protocol, one is Alternativetoken (currently SFT) and the other is Nativetoken (SPD). The role of the two tokens in the protocol is different. SFT is mainly responsible for the medium of liquidity, and the equity attribution function/rights are inherited from StakingToken. As the native token of the SFT protocol, SPD is mainly a system transaction medium, mainly responsible for value capture, consensus incentives, prevention of system abuse, and system voting governance.

7.2 Staking and Incentives for Validators

An open PoS network needs to incentivize validators. At the same time, in order to prevent cheating, validators need to pledge SPD as a deposit before participating in the verification. After completing the calculation and storage, they are entitled to receive SPD rewards distributed by the system. The staked SPD will be locked, and the locked SPD will be slashed if validators engage in mischief or misbehavior. SSV is selected from SV. Candidates will be evaluated based on several criteria such as online time, ratio of free tokens to equity tokens, etc. Generally speaking, for the safety of contract assets, the system stipulates that the number of StakingSPDs is proportional to the number of Stake assets that can be processed, that is to say, the more SPDStaking, the more Stake contract assets that can be processed, and more SPD rewards can be obtained. If the system detects SSV's dishonest behavior, the system will also slash StakingSPD, and the ratio of slash depends on the severity of the crime.

7.3 Transaction Fee

The StakeContract created on SFT obtains the SFT circulating on the SFT protocol through the original chain Stake. SFT circulating on the SFT protocol needs to pay SPD to obtain computing power. The verifier packages and uploads the transaction into the latest block data. After the latest block height is updated, the SFT transaction is completed. The amount of SPD's handling fee is related to the size of the transaction data that needs to be processed. Finally, the Fee is priced by SPD. If the paid SPD is higher than the resources required for system operation, the system will return the remaining SPD to the contract account after the transaction is completed. Otherwise, the system stops functioning when there are no SPDs to pay for resources.

7.4 CallStaking contract business call - the pricing method of SPD

The SFT protocol will open multiple interfaces for third parties. Contract calls will consume computing resources in the computer room of the system. In order to limit malicious low-cost attacks and meet a certain degree of commercial calls, when the frequency of contract calls reaches a certain level, the caller needs to pay a certain amount of computing resources. Of course, the business caller can customize the payer, which can be a platform user or the platform itself. The overall fee model is denominated in SPD. The system will calculate the computing resources and storage resources paid by the node when calling, and compare the SPD paid by the caller to determine the final model. All transaction fees obtained from the protocol will be allocated to SV and the protocol treasury in a certain proportion.

7.5 Initial Distribution of Tokens

A large portion of the SPD's initial distribution is allocated to community rewards. Users can participate in Staking through Staking Contracts and get community rewards. The amount earned is proportional to the amount of work performed through the total value of the StakingToken. This process is called StakingDrop. StakingDrop is an initial incentive mechanism designed by SFT to stimulate early adoption of SFT. New incentives could increase the collection of circulation fees.