Phoenix Token Economics Update – Maximum Supply, Hybrid Staking, & CCD
Last updated
Last updated
In this release we will provide an overview on much anticipated newest updates on token economics of the Phoenix Ecosystem, and will cover 3 aspects: 1) maximum supply cap 2) overview of Computation Credits (CCD) token economics 3) a brief overview of Phoenix Hybrid Staking.
In the past, it has been the case that no maximum cap has been set on the Phoenix (PHB) supply, and due to automated mechanisms such as inflation (ecosystem rewards such as staking), which is currently 9% per annum (decreased early 2023), and utility-based token burn mechanisms, the supply will take it’s course via such mechanisms.
After careful deliberation and discussion, the Phoenix Core Development and Phoenix DAO, for the holistic purpose of optimal token economics combined with ecosystem development has decided to change this once and for all, setting a maximum supply cap – a supply once reached cannot increase (but can only decrease).
The maximum supply cap will be set at 64,000,000 PHB. To see what this means for ecosystem growth, incentives, and economics, continue reading. Following this announcement, the Phoenix Core Development will proceed to update the latest supply information with Coinmarketcap as well as establish a real-time supply API.
Based on this total maximum supply and other dynamics, including reductions in inflation rate via the Phoenix RISE program, the entry of hybrid staking, and ecosystem growth, we can approximate a range and scenarios in which the maximum supply is reached:
Fast | 5 years |
Medium (Expected) | 6-7 years |
Slow | 8+ years |
A few important things to note:
If network utility significantly exceeds expectations, it’s completely possible for the maximum supply to never be reached
Once the maximum cap is reached, it does not mean that the supply cannot go down from there. Multiple types of utility-based token burning including via Computation Layer and Native dApp (AlphaNet) usage can reduce token supply.
Hybrid Staking reduces reliance on PHB rewards-based staking, and is expected to be proportional to ecosystem growth as well linked to CCD usage (read on for more details). The growth of Hybrid Staking hence has a direct affect on time for max supply to be reached (will lengthen timeframe). Hence once maximum supply has reached, it will be understood that there will be no staking rewards in the form of PHB (therefore zero inflation).
By the time that maximum supply is reached, we expect most of staking has transferred over to Hybrid Staking, which includes a) functionality-based staking b) ecosystem rights-based or tier-based staking, and staking for mining/production of CCD (see below for more details).
Computation Credits (CCD) should be familiar to most of PHB community members, holders, and partners, as it was launched as the unit of compute resource credit on the Phoenix Computation Layer. CCD is used as the unit of value exchange for various computational resource tasks, including running AI models, multi-party computation jobs, and decentralized AI – in general it is used for AI and computation scaling on our AI Node Network.
Here we will give an introduction of Computation Credits (CCD) – we will shortly release a separate full paper on CCD token economics and how it strengthens the Phoenix ecosystem.
Currently the only way to obtain CCD is to via a one-way swap from PHB in the Phoenix Computation Layer Control Panel – meaning that PHB is burned to create CCD and is put into circulation. After the newly circulated CCD is deposited into the user’s account, he/she can use it for various tasks on the Phoenix Computation Layer.
CCD can also be created via our fiat gateway (AlchemyPay), which allows global credit card and other fiat payment formats – the resulting mechanism is the same mechanism as the one-way swap, as gateway converts fiat to PHB then to CCD.
Currently there are Around 600+ addresses on Phoenix Mainnet using and holding CCD. Additionally, dApps in the Phoenix ecosystem (such as AlphaNet & NYBL) that utilize Phoenix Computation Layer will also require CCD as the credit for computational resources through the AI Node Network.
Currently CCD cannot be traded on any third party platform or exchange, although that is expected to change (according to Phoenix DAO’s planning) as soon as within a year. CCD is a native ERC-20 standard compatible asset on the Phoenix Mainnet, and there will be easy-to-use bridges to BSC and Ethereum formats soon.
CCD is completely synergistic to PHB’s token economics, and adds unique value in various different ways, including but not limited to community/holder incentives, AI Node Network growth (both on demand-side and supply side), Hybrid Staking, and overall staking participation. CCD has an especially important role in our Computation Layer’s SkyNet update. (See SkyNet update details here: https://skynet-upgrade.phoenix.global/ )
CCD circulating supply creation will be community and ecosystem-driven, and has a “mined” and “produced” concept, meaning that any new circulating supply would require an action, participation or value exchange, which includes:
Swapping PHB for CCD, and burning PHB
Hybrid Staking [Hybrid Rewards] – Staking PHB at above certain tier, and obtaining both PHB and CCD as rewards
Becoming a compute resource node in the AI Node Network – node incentives (other than fees)
Moving forward CCD will adopt the principle of limiting circulating supply, maximizing utility.
Below we will provide a simple summary of the CCD circulation and token economics roadmap – additional details will follow in the standalone CCD token economics paper:
| Phase | Added Sources of Circulation |
|---|---|
Phase 1 (Current) | · Swapped from PHB, PHB burned · Fiat gateway |
Phase 2 | Hybrid Staking:
· Staking PHB and receiving PHB + CCD as rewards · Staking PHB in exchange for platform features (AlphaNet + Computation Layer) and CCD rewards · Staking PHB as compute resource provider for CCD rewards |
Phase 3 | ETH and BNB DEX liquidity pools |
Phase 4 | Ecosystem Airdrop
A specific CCD supply will be airdropped to PHB holders and ecosystem participants based on an algorithm using amount PHB held, amount PHB staked, and the amount of time staked as factors of the airdrop. The airdrop will be significant and the amount PHB staked and the total staked time will be the most important factors determining total airdrop per address. Long-term significant holders of PHB will receive the largest proportion of this airdrop. |
Phase 5 | Exchange Traded |
Hybrid Staking is a unique concept developed by Phoenix DAO that incorporates staking with more dynamic, multifaceted value creation – that is value from not just reaping staking rewards from the default token. Like CCD token economics, there will be more detailed specs to come regarding Phoenix Hybrid Staking, hence here we will briefly summarize the types of Hybrid Staking.
Currently Phoenix’s staking program is highly successful, with over 14,000,000 PHB staked, which is approximately 33% of the circulating supply in Phoenix Staker. This shows a 1 year growth of nearly 100% in the total amount staked, showing a significant increase in long-term PHB holders. It’s expected that Hybrid Staking will increase this trend further.
| Format | Description |
|---|---|
Hybrid Rewards | Regular Staking Rewards in PHB or PHB + CCD. PHB Holders will have the option of sticking to traditional staking, or alternatively choose Hybrid Rewards Staking, with a higher nominal APR return. |
Application Staking | Staking PHB for to access premium features of native dApps, for example for AlphaNet, access AI products and signals with high return and Alpha, or stake at a required tier to access basic products for free. Application staking will not occur in regular staking pools but rather in the app itself. Certain application staking tiers may have CCD rewards along with features and perks – note that CCD rewards in application staking will likely be lower than that of regular Hybrid Rewards Staking. |
Computation Layer – Demand Side | Stake PHB/CCD at a particular tier to access AI and compute resources (GPU/CPU) at lower cost, higher performance and job priority. |
Computation Layer – Supply Side (SkyNet) | Stake PHB/CCD at a particular tier to access better node priority, node incentives and fee payout rate. Once the AI Node Network grows, a small minimum staking requirement may be set to join the network as a compute node. |
