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#Tokenomics

Commonwealth’s tokenomics are some of the most interesting, efficient and balanced I think I have seen in crypto. Commonwealth’s economy forms a truly closed loop that constantly creates value for the protocol, its users and investors.

If you are looking to create a sustainable economy you want to create a system where the profits generated within the ecosystem are not extracted by the team or others but instead flow back into the economy, which in turn should continue to grow the value of that economy - this is what I believe Commonwealth have managed to achieve.

To accomplish this Commonwealth have created a well thought out, closed loop system which incentivises users to buy and use their token and also show how to control the value that is extracted from this system.

This is how Commonwealths system works:

Value Into Commonwealth Economy:

  • Platform transaction fees on all WLTH transactions (1%)
  • Fund management fees (2% per year, capped at 5 years)
  • A dedicated community fund funded by transaction fees and secondary NFT sales
  • Carry fees from investments (10–50% depending on staking levels)

Value Out of Commonwealth Economy:

  • Revenue-share payout to genesis NFT holders (15% of protocol profits)
  • A deflationary buy-back and burn mechanism on investment returns
  • Rewards & incentives programs such as Investment returns payouts & Community Fund returns as rewards for active community members (50% returned, 50% burned as deflationary mechanism)

As you can see from this and more clearly in the visual diagram below, there are no unnecessary leakages from this system. As long as the protocol continues to get used it should preserve and hopefully increase its value over time.

From a supply and vesting perspective I also think this is one of the more balanced and fair schedules I have seen. The vesting periods show a long term commitment and approach to the project and I think this is why some of the cliffs are shorter than I would personally like them to be as they have tried to balance these shorter cliff times out with only a small percentage of unlocked vesting each month. Show Less

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