3.2 Token Economy
Last updated
Last updated
The ELYSIA Protocol includes a program where EL tokens are locked, or "staked". This serves two main functions:
Giving Governance Voting Rights - sEL (staked EL): When you lock your EL tokens, you receive sEL (staked EL) tokens. The number of sEL tokens you get is based on how many EL tokens you've staked. These sEL tokens allow you to vote on various policies and decisions online. For more information on how this voting works and what you can vote on, please see the Governance Section.
Governance Participation Rewards: sEL can receive screening labor fees as a reward for participating in online governance. This includes voting for or against the creation of RWA (Real World Assets) tokens. When reviewing proposals for new RWA tokens, sEL holders examine different documents related to the rights involved. Those who actively participate in reviewing specific proposals for RWA token creation are compensated. This compensation is the fee paid by the real asset owner to the online decentralized autonomous organization (DAO), which is then distributed to the sEL holders based on their stake through an offline DAO.
Owners of real-world assets can request to create RWA tokens, representing their assets. They do this by first through the offline DAO (Decentralized Autonomous Organization) which is a legal entity. This offline DAO then brings the request to the online DAO, which is a group of decision-makers operating on the blockchain.
The online DAO votes to decide if the RWA tokens should be issued. If they agree, the asset owner must pay a screening labor fee for this review. This payment is made in cryptocurrency to the offline DAO.
The screening labor fee is converted from CEX/DEX to EL and stored in the insurance pool. When the RWA token reaches its planned end date without any issues, 50% of this fee is shared with the EL holders who took part in the review process.
However, if the RWA token expires prematurely, the whole screening labor fee is returned to the insurance pool. This pool acts like a safety net, compensating for any losses or problems that happened because the asset wasn't reviewed properly.
Sometimes, depending on decisions made by the online DAO, this screening labor fee might be kept in stablecoins (due to its stable value).
This entire system of fees, reviews, and rewards encourages people to participate in the process of turning real-world assets into blockchain tokens (RWA tokenization).
When a Real World Asset (RWA) token is issued, there's a screening labor fee involved. This fee is converted into EL tokens and added to what's called the insurance pool. Once the RWA token reaches its end date without any problems, 50% of this screening labor fee is shared with EL token holders who were part of the review process. However, if there's an issue with the RWA token before its end date, the full amount of the screening labor fee in EL tokens goes back to the insurance pool. This pool is there to cover any losses or damages caused by incorrect evaluations.
Additionally, the Online DAO focuses on fixing problems related to 'oracles' in the RWA tokenization process. An oracle in this context refers to a system that feeds real-world data into the blockchain. If thereβs any damage because of an Oracle-related issue, the total screening labor fee collected for that specific case will be used to pay for the damages.
Owners of real assets have the opportunity to get a reduction in the screening labor fee based on how much they deposit compared to the total value of their Real World Asset (RWA) tokens. If they deposit a larger amount, they can get a bigger discount on the cost of this screening process. The amount of discount on the screening labor fee can vary depending on what kind of asset it is and how much has been deposited.
To tokenize real-world assets (RWA), we need a range of specialists and partner organizations. Their role is to accurately assess the value of these real assets and regularly update their evaluations. This group includes various experts and organizations such as Oracle nodes (who provide external data to the blockchain), non-performing loan or NPL buyers (individuals or entities that purchase loans on which the borrower is not making the required payments), legal teams, accounting and tax firms, appraisal companies, and entities involved in asset liquidation.
The participation of these experts and organizations in reviewing the process of issuing RWA tokens is encouraged through incentives. These incentives are linked to the total value of RWA tokens issued and are funded by the Ecosystem Expansion Fund.
