The $S Value-Capturing Implementation Pattern (VCIP) is based on activation token utility with staking it or using it for purchasing the blockspace (gas fees payment).
1. TOKEN STAKING IMPLEMENTATION
Users need to lock their tokens by using the createValidator function or the delegate function of the SFC contract (located at 0xFC00FACE00000000000000000000000000000000).
It is impossible to stake without attaching the stake to a delegator. The validator's maximal stake is 15x his self-stake (i.e., only 14x the self-stake may be delegated).
The self-stake (deposit at createValidator) must not be less than a lower bound that is presently set at 500,000 S. Withdrawal and undelegation are carried out through the respective functions of the same contract, with withdrawal subject to a cooldown period (two weeks at the time of writing).
Validator's block-producing work is compensated in two ways:
- (1) a base reward emission is computed to reach the target APR. The reward rate is inversely proportional to the stake rate of S and obeys the following formula:
reward_rate =
- (2) the validator is given tips from the transactions to apps built on top of Sonic.
These apps can either participate in the Fee Monetization (FeeM) scheme or not. For transactions to apps that participate, 90% of the fee is given to the app builder and 10% to the validator; for transactions to apps that do not participate, 50% of the fee is burned and 45% to the validator.
The rewards the validator gains are split with the delegators proportionally to the stake contributions, with the caveat that the validator retains 15% of the rewards due as commissions anyhow.
2. GOVERNANCE IMPLEMENTATION
The details of the governance implementation are currently unknown.
However, we can extrapolate it from the previous implementation (the Fantom Wallet governance platform): stakers are granted voting power equal to their stake (which is not subject to any decay or forcible release), which is automatically delegated to the delegated validator.
Thereafter, Stakers may use the platform to cast their votes; the Validator can only realize its voting power delegation if the Staker fails to vote itself.