Demand Dynamics
Model Staking In order to submit models, contributors must stake some governance dictated by their amount of CMK. The model will only be backtested and measured for success for the duration of time that the owner has staked their CMK.
Model creators require CMK tokens to submit models to the attestation registry. This acts as a barrier to stop bad actors from performing sybil attacks on the protocol. One of the great benefits of this prevention mechanism is that it merely requires staking CMK tokens, not spending them. This is a step up in UX compared to layer-1 blockchains like Ethereum/Bitcoin, which require paying fees that do not get returned.
Instead, model creators who are not bad actors attempting to attack the system will be able to redeem their staked CMK tokens at any time. Doing so will officially remove their model from the attestation registry, thereby removing the model from the platform entirely. In this use case, CMK tokens act as a solid security mechanism which, in one swoop, prevents spam, removes resource waste, and disallows sybil attacks altogether. This all contributes to driving up demand for CMK token, especially as more and more model contributors realize they can earn a living building DeFi models for Credmark.
CMK token holders have the ability to take part in governance. As mentioned previously, without governance the system would not have longevity and the game theory would break down. Because governance voters are also rewarded for taking part in governance, holding CMK ends up giving them both the responsibility of taking care of the system, and the opportunity to mold its future while earning more CMK.
Any revenue generated by the UI, API, and oracle distribution of data will be distributed to a buy-back Contract. This contract will spend the revenue to buy CMK from a distributed exchange and return the CMK to the DAO for future development work or to provide liquidity in the open market.
The CMK token also has great value for end users who wish to consume the results of models on-chain. Using the Credmark wrapped trustless on-chain oracle which feeds model result data to smart contracts through API3’s Airnode, any smart contract protocol/web3 application/user will have the ability to spend CMK tokens to consume the data trustlessly. The benefit of using CMK is that users will get a discount compared to using other currencies, further increasing demand for CMK.
Last modified 1yr ago