We are pleased to release the Stacks Token Economics Whitepaper v2.0.
The paper presents the Stacks token economics and incentive mechanisms. It summarizes the distribution of Stacks tokens in the genesis block, including distributions to early backers, the 2017 accredited offering, and the 2019 SEC-qualified offering, among others. We outline net inflation, minting, and unlocking.
The current circulating supply, as of Oct 24th, 2019 is 385,937,152 and a total of 1.32B Stacks have been allocated in the genesis block. The max supply in the year 2050 will be 2.048B.
More than 5000 unique individuals and entities got their Stacks allocations in the genesis block. As communicated in the 2017 and 2019 token offerings, Stacks unlock for most owners over 2 to 7 years depending on the distribution type. We’re proud of our diverse set of early supporters from around the globe that became Stacks holders through the genesis block.
The Stacks token economics paper addresses a few topics, including:
We describe the net inflation rate per year as mining on the network starts. Stacks blockchain v1 currently uses Bitcoin miners for processing transactions. Native mining will start with Stacks blockchain v2, expected Q1 2020 or later. Stacks miners will be incentivized by newly minted Stacks. The maximum net inflation from native mining is 4.8%, 3.85%, 2.67% in the respective initial years and drops to below 1% from year 11 onwards. The figure below lays out the schedule:
The Stacks distribution has a built-in roll-out mechanism where distributed tokens slowly unlock monthly vs all tokens being liquid all at once. This monthly unlocking is different from net inflation. Net inflation is for newly minted tokens. Monthly unlocking only applies to tokens in the genesis block; these tokens are already distributed on the network. The monthly unlocking is meant to discourage short-term speculation and attract owners who are interested in the long-term success of the project.
Approximately 70% of the total Stacks tokens that will ultimately be distributed through 2050 were distributed in the genesis block. This is similar to Ethereum’s distribution of approximately 70% of the genesis block with one difference: unlocking schedule. The Stacks tokens distributed in the genesis block have monthly unlocking that ranges between 2-7 years depending on the category of the owner. Full details of the unlocking schedule are in the token paper.
Adaptive Mint and Burn:
The paper outlines our new adaptive mint and burn algorithm for future supply, where the mint schedule can be more adaptive. Although the max circulating supply is capped per year, the total number of newly minted tokens can adapt to network growth. We believe this system is superior to the previous V1.0 model that simply releases a pre-set number of tokens per block. This system potentially allows for better serving user demand during periods of high network growth. This model is predictable through its automated aspects, while keeping a smooth yet capped token supply through the system’s own adaptive mechanism.
If you have any questions about the token economics, reach out to [email protected].
DISCLAIMER: The Blockstack Tokens, “Stacks tokens” or “Stacks” are a crypto asset that is
currently being developed by Blockstack PBC and its affiliates. The website for Stacks tokens can be
found at www.stackstoken.com.
The Securities and Exchange Commission (SEC) has qualified the offering statement that we have
filed with the SEC under Regulation A for our offering of certain of our Stacks Tokens. The information
in that offering statement is more complete than the information we are providing now, and could differ
in important ways. You must read the documents filed with the SEC before investing. The offering is
being made only by means of its offering statement. This document shall not constitute an offer to sell or
the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction
in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
An indication of interest involves no obligation or commitment of any kind. Any person interested
in investing in any offering of Stacks Tokens should review our disclosures and the publicly filed offering
statement and the final offering circular that is part of that offering statement here. Blockstack is
not registered, licensed or supervised as a broker-dealer or investment adviser by the SEC, the Financial
Industry Regulatory Authority (FINRA) or any other financial regulatory authority or licensed to provide
any financial advice or services.
This document contains forward-looking statements that are based on our beliefs and assumptions
and on information currently available to us. In some cases, you can identify forward-looking statements
by the following words: will, expect, would, intend, believe, or other comparable terminology. Forward-looking statements in this document include, but are not limited to, statements about future App Mining
rewards, future token supply estimates, and proposals for an adaptive mint-and-burn mechanism. These
statements involve risks, uncertainties, assumptions and other factors that may cause actual results or
performance to be materially different. More information on the factors, risks and uncertainties that could
cause or contribute to such differences is included in our filings with the SEC, including in the “Risk
Factors” and “Managements Discussion & Analysis” sections of our offering statement on Form 1-A. We
cannot assure you that the forward-looking statements will prove to be accurate. These forward-looking
statements speak only as of the date hereof. We disclaim any obligation to update these forward-looking