Staking? Or Sustainable Rewards?

‘Staking’ and ‘passive income’ are common talking points in the industry. But lately, it hasn’t been for good reasons. Too many blockchain projects fail to take into account the basic laws of economics when building their tokenomics. Other projects simply mint additional supply without consideration of second or third order consequences. Many existing 'staking' or 'passive income' models have turned out to be unsustainable in the long-term due to inflationary tokenomics superseding any value promised through these models. 

At FORE, we’re doing things differently. We’re building a sustainable, deflationary, fee-driven reward model. We never mint new tokens for rewards. Instead, we sustainably reward productive activity through fee redistribution. That incentive drives further activity on the protocol, which in turn reduces the token supply… and the cycle continues. 

1. Sustainable reward model
Instead of minting tokens for rewards like most other projects, we reward users by redistributing platform fees back to them for their productive activity. Half of the platform fees are redistributed for activities such as market creation and validation, allowing users to generate income through quick and easy activity on the protocol. 
Of the 5% maintenance fee taken from each market:

• 0.5% redistributed to market creator
• 2% shared among validators
• 1.5% to the protocol as revenue
• 1% burned and removed from circulation

In order for a reward model to be sustainable, it must be attached to productive activity. Our reward model allows users to generate income through activity such as market creation and validation, benefiting the protocol as a whole.

1.1. Creator Rewards
Users can earn rewards for creating interesting and unique prediction markets on various topics, such as sports, weather, politics, and more. As you are rewarded with 0.5% of the total market size, regardless of the outcome, you’re incentivized to ‘market your market’ and drive traffic to the platform to increase your market’s liquidity. This essentially turns existing models on their head, allowing you to become your own clearing house or bookmaker.

1.2. Validator Rewards
At FORE Protocol, the role of Analyst is crucial in validating market outcomes on the protocol, and ensuring the accuracy of results and proper execution of payouts. 2% of the total market size is distributed among accurate validators based on your Power: which can be increased via multiple consecutive validations. The more validations you perform, the higher your earning power as you validate market outcomes.

Learn how you can maximize your earnings on FORE here.

‍2. Activity-driven deflation
Rather than hosting arbitrary burn events determined by founders, the deflationary nature of FORE is built into the protocol itself. It’s simple: as activity on the platform increases, supply decreases. Several core functions drive the deflationary nature of FORE: 

1. Market Participation: 1% of the value of all markets is burned on market resolution and removed from the total supply.
2. NFT Minting: 100% of FORE used to mint NFTs is burned. To create a new NFT, a user must lock 1,000 FORE, which is then permanently removed from circulating supply.
3. Additional Burns: FORE is removed from circulation through incorrect validation penalties, market creation fees, dispute mechanisms, and more.

Click here to learn more about FORE’s deflationary mechanisms.

Together, we believe this sustainable reward model alongside activity-driven deflation is far more promising and sustainable than gimmicky, inflationary staking, or passive-income models. FORE’s sustainable reward model encourages organic growth, user acquisition, and sustainability of the protocol itself, creating long-term revenue-generating opportunities for active participants in our ecosystem.