Initial Distribution Protocol
Last updated
Last updated
The Goal of Metaoracle’s initial distribution protocol as it relates to market thickness is to incentivize early adopters to increase market thickness. Specifically, a well-designed distribution protocol should attract
1 - early adopters (customers), 2 - honest, high-quality participants (node runners and feed providers) 3 - long term shareholders (community members).
The protocol also needs to scale as the ecosystem matures. The same rewards distributed to early adopters would not be feasible as rewards for later participants. Therefore, the initial distribution protocol can be considered as the initial mechanism to drive early growth, while the Allocation mechanism in the Mechanism Design will dive deeper into how rewards are allocated in a mature economy.
The distribution protocol would have different goals for different participants.
After a certain period, customer fees will provide enough of an incentive to pay out feed providers. Early on, feed providers will onboard much quicker than customers. The distribution protocol would focus on rewarding feed providers for supplying data to the system at a time when revenue is low or non-existent.
The Metaoracle team may also decide to pay Feed Providers in fiat currency. As many of the feed providers are traditional, web 2 organizations, they may be reluctant to accept tokens or even change their business model. In these cases, Metaoracle may use treasury funds to pay for 1-2 year reseller licenses to ensure the Metaoracle network has high-quality data available on
Node runners will be running the core Metaoracle infrastructure. Rewards for node runners come from a combination of fees from customers for providing data and running computations, as well as rewards from the ecosystem for participating.
The amount of rewards distributed to Node runners will increase in time. There is a minimum amount of node runners needed for a properly functioning system. Any node runners that join past the optimal number of NRs needed adds marginal security to the system while increasing latency, and reducing the overall rewards available to the system.
The Node Runner rewards come from a pool of rewards. Rewards from the pool are distributed regardless of the number of node runners so that those joining early receive larger shares of the reward pool. Past a certain point, the rewards distributed become smaller, which would disincentivize NRs from joining once the system meets its needs, due to a higher opportunity cost. As the customer base grows, the rewards pool will grow proportionally.
Community members will also be key to growing market thickness via marketing activities and liquidity mining. As a fully decentralized application, Metaoracle will depend on its community members to generate some marketing activities.
Metaoracle will not be using free airdrops to grow followers, as this has been shown to increase non-committed users, and tends to attract bots and "Token Farmers".
Instead, Metaoracle will reserve tokens to distribute to product activities that create "sticky" community members. These activities include (but are not limited to) providing liquidity, hackathons, blogs/videos/podcasts, and other beneficial activities.
