Economic Model
pSWAN’s economic model ensures solvency and incentivizes growth:
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Invariant: Each pSWAN is backed by an equivalent SWAN token or collateral.
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Reward Rate: Calculated as
1/conversion_rate - 1and applied periodically. -
Token Rebase: Adjustments to pSWAN holdings ensure proportional representation of reward sharing.
Key Terminologies
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Node Collateral:
- Collateral required by the DePIN protocol to guarantee service provider obligations. This is also the locked portion of the reward and forms the borrowing quota from the pool to ensure solvency.
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Conversion Rate:
- Service providers specify the amount of collateral they are willing to lock in exchange for SWAN tokens. The ratio of
token_amount / locked_collateralis the conversion rate (less than 1). Locked collateral is the projected amount SPs must repay after a year.
- Service providers specify the amount of collateral they are willing to lock in exchange for SWAN tokens. The ratio of
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Bootstrap:
- For SPs without existing collateral, a bootstrap request can be filed to request for delegation. Once approved, the node can be started, and the requested tokens cannot be claimed by the SP and are backed with a security deposit to ensure solvency.
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Solvency Formula:
pSWAN <= SWAN + (locked_collateral * conversion_rate)