One of the tradeoffs in a bullish market is transaction fees. Networks become congested, and costs on Ethereum have skyrocketed. As a result, moving ERC-20 tokens is expensive and can take hours for a transaction to clear. For these reasons, the VID team has decided to fast-track their mainnet launch and implement staking.
The decision to move mainnet forward is logical. VID’s objective is to create an alternative to Universal Basic Income (UBI) through a social media platform. Users will not be willing to transfer $5 of tokens if fees are $10 or higher. By moving the system over to a new blockchain, these fees drop dramatically, allowing the withdrawal and transfer less expensively. The blockchain transition will occur within the next six months.
The limited supply of tokens makes VID staking an exciting proposal. The current distribution model is to send 7,000 VI tokens each day, 70 VI to the VID Foundation, and 6,930 to VID app users.
Starting on September 1st, the same 7,000 tokens will be sent out, but their distribution will change.
- 70 VI to the VID Foundation
- 3465 to VID app users
- 3465 to VI token holders staking (On Mainnet this allocation will be for block validators)
Distributing tokens in this manner is more in alignment with VID’s objective. It also achieves the goal of reducing the steps needed to move tokens in and out of staking. The annual rewards for staking are as follows:
A yield of 21% – 126% is in line with the current rates of DeFi and yield farming on other platforms. These rates will change based on the number of total tokens staked. The recent VID Medium article explains it like this:
“We will switch to the next band and the yield will change after crossing each threshold. For example if you are staking today and 800,000 VI is staked, your return for today would be based on 126.47% Annual Yield. If tomorrow 1.1Mil VI are staked the return for that day would be based on 63.47% annual yield. Even though the yield reduces the more people that stake, the circulating supply is then reduced balancing things out for stakers. We have also set a cap so the yield can never be lower than 21.08%.”
The VID team is front-loading adoption by incentivizing early users. DeFi aficionados may stake for the high returns and then transition to using the app to increase their token supply. There is never a guarantee with moves like this, but the market demand for novel mechanisms is present.
Token staking will go live on August 28th on Pool X in partnership with KuCoin.
The VID Medium is here.
The VID Telegram is here.
*Disclaimer – VID is our Media Partner, and therefore this content is sponsored by them.