Governance
TELx: Production and Consumption Activities and Benefits
TELx Production and Consumption Activities: Introduction
The following section first describes the factors that encompass all aspects of the material, social, and institutional environment which set the context for the various actors and user groups that harvest TEL from TELx. We then provide a an overview of TEL harvesting activities and benefits, and propose evaluative criteria that could be used by to determine which outcomes the community would deem satisfactory.
Context
- Telcoin Platform and TEL: Characteristics of the TELx system and the TEL benefits it generates.
- Attributes of the Actors: The attributes of the community of TELx Miners.
- Governance System: The organizations and rules that structure and control TEL harvesting activities.
TEL Harvesting Interactions and Outcomes
- Table Overview: The involved actors, the benefits they enjoy, the activities they undertake, using what technologies, the basis formula determining how benefits are calculated, and the infrastructure involved in the situation.
- Evaluative Criteria: Criteria that may be used by miners or external observers to determine which aspects of the observed outcomes are deemed satisfactory and which aspects are in need of improvement.
Attributes of the System: TELx and TEL
Resource System: TELx
The characteristics of the resource system involved in generating benefits. TELx is a network of liquidity pools on blockchain-based, decentralized financial protocols that enable user-owned, automated, self-custodial exchange.
TELx: Sector, Infrastructure, Productivity
- Sector: Decentralized finance, encompasses the use of blockchain systems and on-chain programs called smart contracts that replicate existing financial services in self-executing, open-source code on blockchains in an automated, decentralized, self-custodial manner without the need or use of centralized intermediaries.
Infrastructure TELx consists of a network of liquidity pools on decentralized financial protocols, a front end website, TEL storage, distribution, extraction facilities, and systems used in management by the TELx Council.
- Component | Description
- Network Infrastructure
The technological systems involved in the creation, storage, maintenance, generation of TEL within TELx for liquidity miners to harvest and DeFi protocols that facilitate exchange on TELx, managed by the TELx Council using the TELxIP process. | Production Facilities: A network of liquidity pools on DeFi protocols, used for exchange.
Storage Facilities: TELx Council Safe, TELx Distribution Safe.
Distribution Facilities: TELx Staking Manager, TELx Telcoin-Distributor
Extraction Facilities: Staking contracts, TELx.network front-end site. - Platform Infrastructure
The underlying blockchain infrastructure systems that TELx system depends on to function. | Telcoin Network: Serves as programmability, execution, settlement, data storage layer for TELx. The system enables the construction of liquidity pools in smart contracts that self-execute exchange and markets production functionality in programmable code, enables users to transfer, exchange their assets through a peer to peer network, and to verify their ownership and transaction history at any time by accessing the open, immutable, distributed ledger the network generates.
Other Blockchains: The other blockchain networks, such as Polygon and Ethereum, which host TELx DeFi markets.
- Productivity of System (TEL): 400M TEL distributes from the TEL Treasury to TELx in year one, and liquidity miners harvest from a monthly flow of 33.33M TEL based on their pro-rata share of staked liquidity in TELx staking contracts, and may be used to finance system improvements and maintenance.
- Productivity of System (Markets): The supply of exchange liquidity, exchange volume, and fees paid to access the DeFi marketplace over time.
Resource Products: TEL
The characteristics of the units extracted from TELx that can then be used to consume platform services, held for later use, or used as an input in production, harvesting, governance, or exchanged for other goods or services.
TELx: TEL Attributes
Number of Units: 100B TEL total supply which can ever be created, 80B TEL is circulating in the marketplace, 20B TEL is the inventory of extractable units in the TEL Treasury.
- TEL Total Supply: 100,000,000,000 TEL is the total and maximum supply of TEL which can ever be produced by the Telcoin Platform.
- Circulating Supply: 90,000,000,000 TEL is the supply of TEL in circulation which are held by as private property by TEL users.
- TEL Treasury Inventory: 10,000,000,000 TEL is the current supply of extractable TEL contained in the TEL Treasury, prior to TGIP1, from which the system generates flows that can be harvested by miners.
TELx Treasury Issuance Rate: The total number of TEL units generated by the Platform each year from the Treasury to TELx
Table 1: TELx TEL Treasury Distribution Rate
- Component | Mechanism | Y1 | Y2 | Y3
- TELx Distribution Safe | Airdrop | 100M | |
- TELx Council Safe | Sablier Stream | 300M | 369M | 332.1M
TELx: TEL Issuance Rate
Definition: The number of TEL units generated by TELx to staking contracts to be harvested by liquidity miners over time.
Overview
TEL flows within TELx from TELx safes to staking contracts to be harvested by miners at pre-determined levels, which may be altered by the TELx Council using the TELxIP process at any time.
Table 2: TELx issuance rate
- Component | Mechanism | Y1 | Y2 | Y3
- TELx Distribution Safe | Airdrop | 33.33M per month in Q1 | |
- TELx Council Safe | TELx Staking Management Automation Module | 33.33M per month in Q2, Q3, Q4 | 30.75M per month | 27.675M per month
TELx: TEL Harvesting Levels
Definition: The number of TEL units available to be harvested from the system by miners over time.
Overview
Liquidity Miners provide liquidity to TELx markets, stake their liquidity in staking contracts, and harvest TEL units from TELx based on their pro-rata share of staked liquidity according to harvesting rules that are set by the TELx Council.
Harvesting rules are programmed into staking contracts to self-execute the calculation, allocation, and extraction of TEL units by miners.
The TELx Council may update the rules at any time using the TELxIP process, and are responsible for ensuring the rules are enforced properly as designed.
Table 3: TELx Harvesting Levels
Liquidity miners compete to harvest TEL from TELx by providing liquidity to the following markets and staking their liquidity provider tokens in TELx contracts.
Total Distribution
Summary: These harvesting rates are indirectly regulated by the Treasury Council. A TEL Distributor is used for allocation of TEL units to the TELx safe responsible for providing issuance.
- Description: TEL is allocated from the TEL Treasury and distributed throughout the system according to rules determined by the Platform and Treasury Council using the TELIP process.
- Physical Corollary: The total quantity of fish an angler club determines can be extracted from a lake by fishermen throughout a year.
TEL Treasury Regeneration Rate: The total number of TEL units destroyed and regenerated to the TEL Treasury each year. The number of TEL gees paid by TELx users and destroyed, regenerated to TEL Treasury by Telcoin Network.
- Formula: n TEL burned on Telcoin Network per year
- Rationale
- Blockspace Demand and Sustained TEL Yield: This process ties blockspace demand to a decreasing circulating supply of the token and an increased supply of future extractable units, enabling sustained yield for all miners when TEL units are allocated proportionate to the rate they are regenerated over time.
- Incentives Alignment: Anyone can send TEL units to the burn contract, enabling service providers to align with the broader Telcoin ecosystem and drive adoption of their application by platform users.
- Maintains Fixed Supply Cap and Sustains TEL Yield: BTC, ETH, TEL compared
- BTC Case Study: In ~2140, the Bitcoin network of miners, node operators, and developers will need to decide to raise the cap of BTC, a crypto asset with a fixed supply cap and no regeneration rate (ie an exhaustive resource) or the network will need to sustain entirely on BTC network fee revenue. That’s a tough burden to achieve when issuance halves every four years.
- Ethereum Case Study: Ethereum’s solution to the issuance yield sustainability problem while maintaining scarcity, was to have an uncapped supply of ETH while burning a portion of fees.
- TEL Case Study: The Telcoin Network TEL destruction and regeneration mechanism provides the solution to the fixed supply cap and yield sustainability dilemma. So long as users temper their use such that TEL issued is less than or equal to TEL regenerated, TEL yield will sustain while maintaining 100B total units.
- Physical Corollary: All renewable resources have a regeneration rate. The population of fish in a lake decreases as more fish are caught, but the population also replenishes over time, either through natural reproduction or artificially stocking the lake.
TELx TEL Yield Sustainability Formula: The rate at which TEL issuance is sustained for future generations over time. TELx TEL yield is sustainable when the total TEL burned by the network and regenerated to the TEL Treasury is equal to the number of TEL harvested from TELx over time.
- Formula: TEL Issuance Rate ≤ TEL Regeneration Rate
- Description: When the TEL regeneration rate is greater than or equal to the TEL issuance rate, TEL is sustained over time for future generations of miners. In other words, it is a renewable resource rather than an exhaustive one above this threshold.
- Physical Corollary: If the angler club limits the number of extracted fish from a lake to match the rate that the fish naturally reproduce, the fish population sustains itself and there is no need to restock the lake.
TEL Utility Value: Consumers and miners use TEL as a medium of exchange to access the services produced by the Telcoin Platform, miners use TEL as an input for participation and earning power in platform production and harvesting processes, and use staked as political power in Telcoin Platform governance.
- Users: Pay TEL gas fees to transact using Telcoin Network blockspace, exchange TEL for other assets on TELx, and transfer TEL to settle payments on Telcoin mobile applications.
- Liquidity Miners:: Liquidity Miners use TEL to consume platform services, they use TEL and other assets as inputs to produce DeFi markets, stake TELx liquidity provider tokens (LPTs) in TELx contracts, earn TEL fees from trades, harvest TEL issuance from TELx, and use staked TELx LPTs as political power to propose and vote in governance.
Markets: Liquidity Pools
The characteristics of TELx AMM liquidity pools, on-chain decentralized markets used for exchange.
TELx: Liquidity Pools
A decentralized financial marketplace which enables the production of liquidity pools, smart-contract based token reserves which are used for automated, decentralized, self-custodial exchange.
Liquidity pools are produced by liquidity miners, who provide TEL and other assets as liquidity, stake their liquidity provider tokens in TELx, earn fees from trades through their pool, and harvest TEL issuance from TELx.
TELx markets currently enable TEL digital asset exchange, on-chain forex, and any can incentivize the production of any other set of markets as determined by the TELx Council and produced by liquidity miners.
Learn more:
TELx Actors: Attributes
Liquidity Miners
Role: Liquidity Provision
TEL users who provide exchange liquidity to decentralized financial markets on TELx, earn fees from trades, stake their TELx liquidity provider tokens (LPTs) on TELx, harvest TEL rewards, and participate within their Miner Group in governance based on their pro-rata share of liquidity staked on TELx.
Benefits: Exchange Fees
Fees: Income from exchange fees
- Exchange fees: Liquidity Miners earn exchange fees each time users trade assets using their liquidity pool.
- Frequency: Earn fees in real time from every trade through their pool.
- Fee Percentage: Programmed into the pool upon creation, generally ranges between 0.01%-1.0% depending on pool asset volatility and the use case.
- Fee Currency: The "trade with" currency is used to pay fees. If a user sells USDC for TEL, liquidity providers earn fees in USDC.
- Basis: Fees accrued based on pro-rata share of liquidity in a pool at the time of each trade.
Technologies used: Private technologies used by liquidity miners to harvest TEL from TELx.
- TEL Consumption Use: Liquidity Miners use TEL to exchange for other assets using TELx liquidity pools, and pay TEL gas fees on Telcoin Network to have their transactions included in blocks and secured to the blockchain.
- TEL Production and Harvesting Use: Liquidity Miners provide TEL and other assets to TELx liquidity pools and stake their liquidity provider tokens (LPTs) in TELx incentives contracts.
- TEL Earning Power: Their proportion of the total liquidity provided to a pool and staked in TELx contracts determines a liquidity miner’s earning power.
- TEL Exchange fees: Liquidity Miners earn a percentage of all exchange fees through their pools based on their pro-rata share of liquidity in those pools.
- TEL Issuance: Liquidity Miners harvest TEL issuance from TELx based on their pro-rata share of staked liquidity on TELx.
- TEL Revenue
- TEL Exchange Fees: Liquidity Miners earn TEL fees each time users trade TEL for another asset using their liquidity pool.
- TEL Issuance: Liquidity Miners harvest TEL issuance from TELx staking contracts.
- TEL Governance Use
- Political Power: Liquidity Miners’ power within their Miner Group in Telcoin Platform governance is based on their pro-rata share of liquidity staked in TELx. This influences their proposal and voting power in Council Member selection processes and constitutional-choice decisions that affect that governance system rules.
- EVM-Compatible Wallet: Liquidity Miners may participate in liquidity provision, staking, and governance from any EVM-compatible wallet that enables those functionalities.
- TELx assets: Miners provide paired liquidity with TEL and other assets in order to produce the TELx DeFi marketplace.
- Liquidity Provider Tokens (LPTs): LPTs are the assets liquidity miners receive after providing liquidity to a given pool, and serve to empower them with secure, self-custodial ownership over their percentage of the liquidity pool and the fees it earns. Liquidity miners stake their LPTs in TELx incentives contracts to harvest TEL issuance from TELx.
- Gas Tokens: Liquidity Miners need TEL and other gas tokens in order to transact on blockchain networks where TELx is located.
Infrastructure Involved: The TELx systems liquidity miners interact with to produce, consume services and harvest TEL issuance.
- Component | Description
- Network Infrastructure
The technological systems involved in the creation, storage, maintenance, generation of TEL within TELx for liquidity miners to harvest and DeFi protocols that facilitate exchange on TELx, managed by the TELx Council using the TELxIP process. | Production Facilities: A network of liquidity pools on DeFi protocols, used for exchange.
Storage Facilities: TELx Council Safe, TELx Distribution Safe.
Distribution Facilities: TELx Staking Manager, TELx Telcoin-Distributor
Extraction Facilities: Staking contracts, TELx.network front-end site. - Platform Infrastructure
The underlying blockchain infrastructure systems that TELx system depends on to function. | Telcoin Network: Serves as programmability, execution, settlement, data storage layer for TELx. The system enables the construction of liquidity pools in smart contracts that self-execute exchange and markets production functionality in programmable code, enables users to transfer, exchange their assets through a peer to peer network, and to verify their ownership and transaction history at any time by accessing the open, immutable, distributed ledger the network generates.
Other Blockchains: The other blockchain networks, such as Polygon and Ethereum, which host TELx DeFi markets.
TELx Governance System: Attributes
TELx Council
Role: Governance and management
The TELx Council is the local governance organization with authority to set, enforce, and refine the rules for interacting with TELx using the TELxIP process, and they are responsible for providing improvements and for allocating TEL within TELx to be harvested by liquidity miners according to those rules.
- Councils | Representation | Process, Domain of Authority | Decision-making Rules
- TELx Council | TELx Council
· Members: 6
· Representation:
Stakers: 1 rep
Developers: 1 reps
Liquidity Miners: 3 reps
Validators: 1 rep | TELx Improvement Proposal (”TELxIP”)
TELx operational rules including allocation, harvesting, planning and financing, information, communication. | Proposal Authority: TELx Council, TAO
Approval: 5 out of 6
Quorum: 100%
Duration: 120 hours
Channel: telxcouncil.eth
The TAO
Role: Construction and maintenance
As authorized, directed and financed by the TELx Council, the TAO is responsible for maintaining existing infrastructure, constructing new systems, and coordinating with third-parties to produce and administer public goods.
Further details: for more information about liquidity miners and relevant TELx organizations, review:
TELx Harvesting Rules
Liquidity Miners produce DeFi markets, stake LP tokens in TELx, and harvest from a flow of 400M TEL in year one, pro-rata based on their share of staked liquidity over time, according to rules according to rules that are set by the TELx Council.
TELx Harvesting Rules
- Position Rules: Liquidity miners produce DeFi markets.
- Eligibility and Authorization Rules: All users located in non-sanctioned jurisdictions who provide liquidity to TELx markets and stake their liquidity in TELx staking contracts, may participate as liquidity miners, harvest TEL rewards, propose and vote in Telcoin Platform governance.
- Y1 TEL Allocation Formulas: Liquidity Miners harvest from an allocation of 200,000,000 TEL per year at a rate of 16.66M TEL per month.
- TEL Basis for Income Formula: Pro-rata share of liquidity staked on TELx over time.
- Market | Protocol | Issuance Allocation | Time Slots | Basis for Allocation | Mechanism
- TEL/USDC 80:20 | Balancer V2 (Polygon) | 2,777,777.78 | Per calendar month | Pro-rata share of staked liquidity | TELx Staking Contract
- TEL/BAL 80:20 | Balancer V2 (Polygon) | 2,777,777.78 | Per calendar month | Pro-rata share of staked liquidity | TELx Staking Contract
- TEL/DFX/USDC 40:40:20 | Balancer V2 (Polygon) | 2,777,777.78 | Per calendar month | Pro-rata share of staked liquidity | DFX Staking Contract
- TEL/WETH 80:20 | Balancer V2 (Polygon) | 2,777,777.78 | Per calendar month | Pro-rata share of staked liquidity | TELx Staking Contract
- TEL/WMATIC 80:20 | Balancer V2 (Polygon) | 2,777,777.78 | Per calendar month | Pro-rata share of staked liquidity | TELx Staking Contract
- TEL/WBTC 80:20 | Balancer V2 (Polygon) | 2,777,777.78 | Per calendar month | Pro-rata share of staked liquidity | TELx Staking Contract
- Authority Over Harvesting Rules: The TELx Council possesses authority to alter and duties to enforce TELx harvesting rules using the TELxIP process.
TELx: Production and Consumption Interactions and Outcomes
- Actors | Benefit | Activity | Flow of Benefits | Basis
- Liquidity Miners | Income from swap fees paid by traders. | Provisioning pool assets to TELx liquidity pools and accruing swap fees from trades. | Liquidity miners earn fees each time a swap is conducted through their liquidity pool. | .04%-0.30% fees as determined by TELx governance on a per market basis.
- Traders | The ability to exchange assets in a decentralized, self-custodial way at any time. | Swapping between assets in TELx liquidity pools, paying pool fees each time they transact. | Each swap users exchange one asset and receive another. | The value a user receives is dependent upon the price and liquidity for that asset across TELx.
Evaluative Criteria
General Performance Indicators: Liquidity, staked liquidity, actors, volume, fees, buy-backs
- Liquidity: Total liquidity provided to the TELx marketplace and in each market over time.
- Staked Liquidity: Total liquidity provided to the TELx marketplace and staked by liquidity miners over time.
- Number of Actors: Number of users, liquidity miners over time
- Volume: Total volume transacted through the TELx marketplace and in each market over time.
- Fees: Total fees paid to liquidity miners over time
Sustainability: Can the quantity of TEL issuance units available to be harvested by Liquidity Miners according to TELx Harvesting Rules sustain at current levels over time?
- Definition and Importance
- Definition: Can the quantity of benefits produced by the system and extracted by appropriators sustain over time?
- Importance: If the stock of benefits available to be extracted from a system are exhausted, the incentives to participate are proportionally reduced for future generations.
- Indicators
- Renewability Formula:
- (Total TEL burned on TELx - Total TEL issued to TELx)/time
- Note: The total TEL burned on Telcoin Network replenishes in proportionate quantity to the TEL Treasury to be harvested by future generations of miners.
- Renewability Formula:
Participation: How many liquidity miners have staked TELx liquidity?
- Definition and Importance
- Definition: Measured by the number of actors and their level of involvement in associated processes.
- Importance: Participation tends to increase legitimacy; co-production can be especially effective form of participation.
Proportional Equivalence: Are TELx harvesting rules suitable to TELx Network conditions? Are the benefits obtained by TELx miners proportional to the amount of inputs required in the form of labor, material, or money?