Ink Economy System
QUILL Token Economics
INK Finance empowers DAOs to issue, risk-manage, and clear bespoke financial products. Ink Finance functions as a utility for credit discovery - the reputation and competence of DAOs, thereby allowing them to drive their growth with robust fiscal control and cross-chain DeFi. Ink Finance devises a unique economy system in which both INK community and the user DAO communities can grow together.
QUILL Tokens are foremost designed to be a utility to capture fees charged for using the INK facilities. Such fees are charged against the proceeds of financial products issued, settled, and cleared by DAOs. Fees can also be charged based on the size of the assets under management for DAOs who focused on asset management.
The rates of charges will be proposed and voted on by the Ink Finance's own meta DAO. After deduction for protocol maintenance, the remaining of the fees are accrued into Ink Finance's treasury, and eventually be used to buy back the QUILL Tokens in circulation, which are then deposited into QUILL’s main staking emission pool to support future staking. This mechanism monetizes the QUILL Token from the liquidities generated by the INK facilities.
Every DAO on Ink Finance is considered a "group user", it is backed by its own token as governance capital. Since there is no guarantee that these DAOs will conduct enough financial activities to allow INK facilities to monetize the QUILL Tokens, INK has devised a mechanism to realize QUILL’s capital value, and this mechanism is the Ink Sponsor Engine, which aims to balance the upfront capital expenditure and the ongoing transaction cost associated with using INK, effectively preventing free-riding.
If a DAO has sufficient funds to acquire QUILL Tokens and stake them into the QUILL staking pool, this DAO is considered self-sponsored. A fee reduction schedule will be put in place for self-sponsored DAOs, depending on the number of QUILL tokens it stakes, and these parameters will be proposed and voted on by the Ink Finance DAO community.
If a DAO doesn’t have enough QUILL tokens to “turn on” the INK facilities, it is considered to be sponsored by the entire Ink Finance DAO, in which case it is required to set aside a certain number of its own tokens as a “rent”. These tokens will be gradually accrued to the Ink Finance treasury, according to a preset schedule. Upon Ink Finance DAO’s voting, these tokens can be liquidated to buy back QUILL Tokens in the circulation, which are deposited into QUILL’s main staking emission pool to support future staking. At any time when the “sponsored” DAO believes that it is no longer economical to pay the rent, it can pay a termination fee (in QUILL tokens) to the Ink Finance DAO and become self-sponsored.
By accumulating other DAOs’ tokens, the Ink Finance Treasury becomes an incubator portfolio that serves the entire QUILL holding community. This is a fair and efficient economic system, in which the Ink Finance DAO (a utility DAO) and the user DAOs can mutually benefit from each other and grow together.