The native token of Incognito, PRV, originally has two utilities:
- Pay the network fee
- Stake to become network validator
The network has been collecting a typical fee (~100 nano PRV per transaction for now), which means everyone is capable of spamming the network with a lot of transaction requests. Every transaction requires the network validators to compute and store the transactions in their disk drive. Although we placed a limit on the number of transactions per block already, the problems of computation and storage would lead to the deterioration of real users’ experience. To be more specific, if it is limited to 100 transactions per block and there are numerous spam, other users have to wait for those transactions to be executed instead of the actual ones. Hence, preventing spam transactions helps to relieve the network validators and facilitate users’ experience.
The max supply of PRV is 100M and is fairly minted over time to incentivize the network validators. The more PRV is minted, the higher circulating supply of PRV. It is obvious that the increasing circulating supply along with fairly remaining demand for PRV leads to unhealthy inflation. Therefore, other sustainable demands for PRV are needed in order to incentivize PRV holders (network validators, PRV investors, etc) and balance the supply and demand of PRV.
Increase the network fee to 0.1 PRV per transaction. Accordingly, x% of the 0.1 PRV will be paid for network validators, and (100-x)% will be burnt. As it is costly for Incognito transactions, the spam ones are expected to decrease. In the same vein, burning PRV reduces its circulating supply, which gradually contributes to a balance between supply and demand. The initial value of x is 5 for now and is subject to change through consensus voting in the future.
As stated in the Q4 roadmap, we are transferring the decision-making of the project to DAO (gradually) to promote community oversight and management. Power is distributed to PRV holders who can vote on the proposals by PRV. It is expected that Incognito development orientation will be discussed thoroughly by dedicated members as well as another utility of PRV token is added.
The mentioned initiatives are subjectively suggested by the team, and we are open to hearing your thoughts on the increase of transaction fee (aka 0.1 PRV per transaction).
P/s: It’s my pleasure to introduce myself. I’m Maisie - new Community Manager at Incognito. As a community manager, my responsibility is to help the Incognito community grow and prosper. I hope you can enthusiastically engage with my first topic.