Introducing UTK 2.0 - The Tokenomics Upgrade That Will Transform The Utrust Token Into A Powerful Digital Currency Ready For Global Adoption

Beniamin Mincu
·
Feb 16, 2022
·
6 min read

Today is a big day for Utrust and Elrond.

It is the day we present a new economics model for UTK 2.0.

One designed to reshape payments, putting Utrust, its community and merchants at the epicenter.

Time to enter the next level.

First, let’s set the context.

Growth is the most powerful force for alignment. With enough growth, everything -- literally everything -- falls into place. Growth is the reason Elrond is joining forces with Utrust.

There are two fundamental views on how one can achieve growth: zero sum vs. non zero sum. One focuses on just taking away other people's pie. The other focuses on unequivocally growing the pie to the largest extent possible.

Suppose you could own 50% of a small pie of, say, 10 million, or 1% of a hyper large pie, of 10 billion, yielding wealth of several generations. What would you choose?

This is powerful and interesting. In other words, to achieve unprecedented growth a shift in perspective is necessary.

But what does this new model bring specifically?

  • powerful and new utility
  • a potent value accrual mechanism
  • a new economics model
  • remarkable bootstrapping process
  • a much wider distribution to a larger community

What is the core utility of the UTK 2.0 token? The purpose of the UTK 2.0 token is to:

  • incentivize accepting crypto, and paying w/ crypto
  • capture value as more payments are made through the platform by combining a buy & burn mechanism for each transaction
  • align interest of all actors, users, merchants, etc. by transitioning to a DAO governed by token holders.

How will the token achieve this? In short: cashback, staking and premium features for all.

Let's take a closer look at the most important things.

First, to incentivize usage, both merchants and users will be eligible for cashback. This is a surprisingly powerful forcing function for nudging and reinforcing the right behaviors. Stake some UTK and EGLD, and you can unlock even better cashback rates.

Second, there's an important paradigm shift we're doubling focus on: Merchant Yield. Instead of paying a fee for each crypto transaction, now you can generate yield to offset the fees, and tap into a new source of income.

Different rates can be unlocked depending on how much UTK you have staked.

Third, we're introducing UTK staking 2.0. A strong program, reinforcing value accrual over a period of at least 5 years.

The program will enable very appealing and dynamic rates with an APR somewhere between 15%-35% in the first year.

With staking, you can get great rewards and unlock the coolest premium features.

Fourth, a significantly upgraded economics model.

The main idea of an economics model should always be to define the most valuable actions, and design the right incentives to reward these key actions. Given enough traction, once a certain tipping point is reached the economic flywheel starts taking off significantly.

To grow you need more merchants accepting crypto payments, and more users making them. To accelerate growth in adoption via merchant cashback and user cashback, you need tokens allocated. To reinforce growth in retention via staking and merchant yield, you need tokens allocated.

Thus, an upgraded economics model comes into existence. UTK 2.0.

The basic idea is that the current model with 500m UTK token supply and no important incentives in place, will transform to a model with 1.4 billion token supply reached in 5 years, and powerful adoption incentives in place.

This puts Utrust on a very different growth trajectory. One truly exciting for both merchants and users alike.

But there are two other important things.

Fifth, a buy and burn mechanism, ensuring that for every transaction made, 0.5% of that value is used to buy UTK on the open market to be destroyed. And another 0.5% is used to buy UTK to be deposited in the community DAO treasury.

Thus, although the economics model starts with an inflationary 1.4 billion supply, with enough adoption, growth, and token burning, the model will transition to deflationary, burning all supply until only 250 Million UTK remain.

Sixth, as things grow Utrust will likely migrate and experiment more with a DAO model.

Imagine a new payment system that is significantly more efficient, super effective in creating value for merchants and users, but also transparent and creative in giving the community a voice in strategic decisions, and new expansionary programs.

Well, that's all super exciting of course, but two important question are warranted.

What's next for the current UTK holders?

UTK holders have been here with the community for a long time, and they're key to the next growth phase. So all UTK holders will be able to receive a 1:1 swap to the new UTK 2.0 ecosystem. This is their chance to choose the future they want to play a role in, join forces with one of the strongest communities in the space, and bet strongly on the next steps.

Why is this big and relevant for the Elrond community?

Well, a few reasons:

A) A useful way of looking at things is:

  • EGLD is the native reserve and fuels the internet-scale payment railways
  • MEX fuels the DeFi components of #web3payments
  • UTK fuels the buyer & merchant relationship of #web3payments

The larger the expansion during the next 5-10 years, the stronger the complementary relationship between these 3 verticals and tokens.

B) There are two ways for the Elrond community to join and be part of Utrust:

The first one is obvious: get a share of tokens and start contributing. Second, we are thrilled to have UTK 2.0 be one of the first projects to debut in the Metabonding program.

Around 16% of the UTK 2.0 token supply will be distributed to the most valuable holders, builders and contributors in the Elrond ecosystem: EGLD stakers, and LKMEX stakers.

If you've been sitting on the sideline, now is the time to act, join, and contribute.

This is all fascinating, but when will it all happen? Gradually, over the next several months.

Starting with March, a new swap bridge will be deployed, to enable ERC20 UTK holders to bring their tokens on the Elrond Network as ESDT UTK. With the ESDT UTK tokens in place, Metabonding will begin, and staking will commence.

Everything else will follow a well thought strategic rollout plan.

We can imagine all this is tremendously exciting and perhaps even slightly overwhelming. These ideas and plans have been developed over the last months. It might be a lot to take in at first, but soon, you’ll realize it’s the future.

It's how we take things to the next level. To be sure, this is an important upgrade and improvement proposal. And several other posts will follow with the strategic rollout plan, and relevant dates as they come closer.

Some ideas might still change as we discover new things.

Key takeaways

  1. Sharing this plan is a huge first step on an awesome journey we're setting together. There will be many challenges, but as many times in the past, one by one, we will conquer each of them. Pushing forward each day. Relentlessly.
  2. Elrond and Utrust are one community now. To the extent we can align forces, and stand together, we are unstoppable.
  3. We intend to enable a new type of payment, at internet scale. One that opens a closer tie between users and merchants all over the world.

Global payments revenue is projected to reach $2.5 TRILLION USD by 2025. Perhaps the number will be even bigger.

Where will Utrust be in 3-5 years? How large will our market be? Will all this potential seem like a huge understatement in hindsight?

Perhaps it will. Perhaps most people cannot yet see how large this market will become. Perhaps we're still very early.

It's all up to us to show how fast we can grow, large the market can become, and how Web3 payments can improve the world.

In sum

It's day one. We’re thrilled for the future. And together with Sanja, Nuno, the Elrond, Utrust teams, and our communities, we've got work to do.

The challenge is on.


For more information, please visit us:


#economics

Written by
Beniamin Mincu
CEO, Elrond Network