Economics

The Filament protocol’s economic model is designed to incentivize participation, ensure the security and reliability of the system, and align the interests of all actors: Campaigners, Delegates, Indexers, and Participants. This section provides an overview of the key economic components and mechanisms within Filament.

Core Principles

  • Incentivized Participation: All actors in the system are economically incentivized to contribute positively. Delegates and Indexers are rewarded for their work, and Campaigners benefit from successful token distributions.
  • Security through Staking: FILA, the native token, is used for staking. Staking provides economic security, as misbehavior can result in slashing (loss of staked tokens).
  • Sybil Resistance: FILUM, a non-transferable gas token, prevents spam and ensures fair access to the Filament Hub’s computational resources. Campaign bonds also provide Sybil resistance at the campaign level.
  • Sustainable Operations: The system is designed to be self-sustaining, with fees and commissions providing ongoing funding for operations and development.
  • Price Stability for Campaigners: The Treasury Window provides a predictable price for acquiring FILA, protecting Campaigners for volatility.

Key Economic Components

The Filament economic model comprises the following key elements:

1. $FILA Token

FILA is the native token of the Filament network. It serves multiple critical roles:

  • Staking: Delegates stake FILA to gain voting power and participate in campaigns. Their rewards are proportional to their stake.
  • Bonding: Campaigners can use FILA for campaign bonds, providing a security deposit that guarantees delegate payments even if the campaign is abandoned.
  • Governance: FILA may be used for governance of the Filament protocol itself (details to be determined).
  • Medium of Exchange: Payment for Indexers and Delegates services.

Learn more about the FILA Token

2. $FILUM (Gas Token)

FILUM is a non-transferable gas token used to pay for computation on the Filament Hub. It provides Sybil resistance and prevents spam.

  • Non-Transferable: FILUM cannot be bought, sold, or transferred between users.
  • Periodic Allocation: Users with a minimum FILA bond receive a periodic allocation of FILUM.
  • Usage-Based Consumption: FILUM is consumed when interacting with the Filament Hub (e.g., creating campaigns, voting, submitting data).
  • Prevents Spam: By requiring FILUM, the protocol avoids spam by malicious actors who would have unlimited requests.

Learn more about FILUM

3. Campaign Bonds

Campaign Bonds are a crucial security mechanism in Filament. They ensure that Delegates are compensated for their work, even if a Campaigner abandons a campaign.

  • Security Deposit: Campaigners deposit FILA as a bond before starting a campaign.
  • Delegate Payment Guarantee: The bond guarantees a minimum payment to each Delegate, even if the campaign fails.
  • Slashing: If a campaign fails due to Campaigner inaction (e.g., not confirming criteria), a portion of the bond may be slashed and distributed to Delegates.
  • Watermark: A mechanism to ensure sufficient funds remain locked in the bond.

Learn more about Campaign Bonds

4. Commission Structure

The Commission Structure defines how Delegates are rewarded for their participation in campaigns.

  • Proportional to Voting Power: Delegates receive a commission based on their voting power (which is proportional to their staked FILA).
  • Incentivizes Participation: Delegates must actively participate (vote) to be eligible for rewards.
  • Delegator Rewards: A portion of the Delegate’s commission is distributed to users who have delegated their FILA to that Delegate.
  • Proposals: Delegates who provide winning proposals may earn additional rewards.

Learn more about the Commission Structure

5. Treasury Window

The Treasury Window provides a mechanism for Campaigners to acquire FILA at a predictable price, even if market liquidity is low.

  • Stable Price: The Treasury Window offers FILA at a controlled exchange rate (likely based on a time-weighted average price, TWAP, plus a discount).
  • USDC Exchange: Campaigners can purchase FILA using USDC.
  • Controlled Supply: The Treasury Window helps manage the supply of FILA in circulation.
  • Discount: The Treasury Window provides a discount on FILA, incentivizing campaign creation.

Learn more about the Treasury Window

Interactions and Flows

These economic components interact in various ways:

  1. Staking: Users stake FILA to become Delegates or to delegate to existing Delegates.
  2. Campaign Creation: Campaigners bond FILA (potentially acquired through the Treasury Window) to create a campaign.
  3. Voting: Delegates use their voting power (proportional to their stake) to vote on criteria and distributions.
  4. Commission Distribution: Delegates (and their delegators) receive commissions based on their participation and voting power.
  5. Gas Consumption: Users consume FILUM when interacting with the Filament Hub.
  6. Slashing: Campaigners, Delegates and Indexers may be slashed for misbehavior or inaction.

This economic model is designed to create a robust and self-sustaining ecosystem for decentralized token distributions. The interplay of these mechanisms ensures that all actors are incentivized to act in the best interests of the network and its users.