Economic Model of Layer1 Project: Analysis of Sharduem’s Allocations

On April 20, it was reported that the economic model announced by the Shardeum of Layer1 project, of which 49% would be allocated to the foundation, ecosystem, team and sales account, and the remaining 51% would be used as node rewards.

Shardeum announces economic model, 51% as node reward

As the cryptocurrency industry continues to grow, more and more blockchain projects are being developed to cater to the increasing demand for blockchain solutions. One such project is Layer1, which has recently announced its economic model.
In this article, we will closely examine the economic model of the Layer1 project and the allocations as proposed by Sharduem. We will also discuss the implications of the economic model and what it means for Layer1 moving forward.

What is Layer1?

Layer1 is a cryptocurrency project that aims to be a leading provider of full-stack blockchain infrastructure for the development of decentralized applications. The Layer1 project utilizes a unique combination of renewable energy and its proprietary mining infrastructure to build a sustainable and eco-friendly blockchain network. This special feature sets it apart from many blockchain projects that rely on traditional, resource-intensive methods of mining.

Understanding the Economic Model of Layer1

Sharduem, one of the partners of Layer1 project, announced an economic model for the project on 20th April 2021. The model divides the total allocation of funds into two categories:
– 49% of the total funds would be allocated to the foundation, ecosystem, team, and sales account.
– The remaining 51% of the total allocation would go towards node rewards.
Below, we will discuss in more detail what these allocations mean for Layer1.

49% Allocation: Foundation, Ecosystem, Team, and Sales Account

The foundation, ecosystem, team, and sales account allocation are all critical components of Layer1’s economic model.
– The foundation’s allocation of funds is essential for the continued development of Layer1’s blockchain infrastructure. To ensure the mainnet’s success, the foundation will use its funds for initiatives such as protocol development, network governance, and other necessary functions that support the Layer1 ecosystem.
– The ecosystem allocation of funds is focused on the development of the Layer1 community. This includes funding for initiatives such as layer1 developer grants, community-driven projects, and marketing efforts for the project.
– The team allocation of funds is focused on ensuring that the Layer1 project has a talented and motivated team in place to drive the development and growth of the project.
– The sales account allocation will be used for the promotion and adoption of Layer1, such as exchanges listing, and ecosystem partners or alliances.

51% Allocation: Node Rewards

The node rewards allocation will incentivize Layer1 network participants to secure the Layer1 network by contributing hashing power. By using this allocation method, Layer1 can ensure network security while also enabling its participants to earn token rewards.

Conclusion

In summary, the Layer1 economic model proposed by Shardeum splits the total allocation of funds into two categories: 49% to foundation, ecosystem, team, and sales account, and 51% to node rewards.
Layer1’s innovative approach to blockchain infrastructure, coupled with its unique renewable energy and mining infrastructure, positions the project for significant growth in the future. It will be interesting to see how the economic model plays out and the impact that it has on the Layer1 community and the wider cryptocurrency industry.

FAQs

Q1. What is Layer1?

Layer1 is a cryptocurrency project that aims to be a leading provider of full-stack blockchain infrastructure for the development of decentralized applications.

Q2. What is the Layer1 economic model?

The Layer1 economic model proposed by Shardeum splits the total allocation of funds into two categories: 49% to foundation, ecosystem, team, and sales account, and 51% to node rewards.

Q3. How will the funds be used for Layer1’s growth?

The foundation, ecosystem, team, and sales account allocations will be used for the development and growth of the Layer1 project. The node rewards allocation will incentivize Layer1 network participants to secure the Layer1 network.
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