Initia VIP Growth Program: Rethinking Inflation Distribution, Activating Cross-Chain Interoperable Economy
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Initia VIP Growth Program: Rethinking Inflation Distribution, Activating Cross-Chain Interoperable Economy
Initia will increase the token supply allocated to the VIP program to more than double its original amount.
Navigating Web3 tides with focused insightsAuthor: Initia
Translation: TechFlow
Where Is Network Inflation Heading?
The answer is actually simple.
As a network, our core objective is to design economic incentive mechanisms that align the interests of multiple ecosystem participants and maximize rewards for real, sustainable activity within the "Interwoven Economy." The Initia VIP program focuses exclusively on the group of genuine users who day after day utilize the Interwoven Rollup network and create value for the "Multichain Garden of Eden."
Why is economically sustainable growth so critical? The blockchain industry is filled with numerous unused "zombie chains" that continue paying excessive inflationary rewards to stakers.
Initia firmly believes that real users actively utilizing the Rollup network are the ones truly deserving of attention and support.
We believe L1 token emissions should serve two core purposes:
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Acting as a budget to ensure network reliability and security
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Serving as an incentive tool to stimulate economic activity and ecosystem growth
Traditional L1 chains often concentrate inflationary rewards on stakers as security incentives. Unfortunately, this model inherently limits the ecosystem's growth potential. Sadly, these traditional L1 teams have inadvertently trapped themselves. While network security is crucial, relying solely on staking-based token emissions actually constrains possibilities for ecosystem development. Indeed, portions of token emissions can be redirected toward more economically valuable ends—such as driving ecosystem growth.
If initial staking rewards are set too high, a blockchain effectively signals to token holders how it expects its tokens to be used. This mechanism unintentionally encourages users to hoard tokens rather than actively use on-chain services. Once such behavior becomes habitual, it triggers a negative feedback loop among early network participants—one that is often difficult to reverse. Early users cease being builders in the token economy and instead accumulate tokens via staking without contributing to network growth. This economic model is neither innovative nor modern; we typically refer to such accumulation-driven behavior as fostering a "scarcity mindset."
Token emissions should serve as a strategic instrument oriented toward economic growth, ultimately allowing real participants—whether end-users of Interwoven Rollups or Rollup builders—to share in the value generated by increased productivity.
This is precisely the rationale behind Initia’s decision to double the total allocation of the VIP program—as a native flywheel mechanism rewarding organic, full-stack application usage across the Interwoven Economy, Initia VIP will effectively activate economic growth and reward the most productive stakeholders.
VIP Mechanism Quick Summary
(For detailed mechanism design, see: this link)
In a system comprising thousands of interconnected Rollups (Interwoven Rollups), aligning incentives for all network participants is crucial. Initia VIP leverages Initia’s L1 architecture and native token INIT to enhance economic alignment and resolve potential principal-agent problems between users, developers, and interconnected Rollups.
By programmatically governing the distribution of INIT tokens, the VIP mechanism establishes economic consistency across interconnected Rollups and incentivizes all ecosystem participants to care about the success of INIT. This mechanism not only creates demand and use cases for the native INIT token throughout the Interwoven Economy but also provides teams with rewards to attract and retain users.
Two-Factor Reward Distribution Model
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Level of INIT activity on each Rollup chain
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Collective voting by INIT stakers and holders of "Enshrined Liquidity"
The Interwoven Economy allows different Rollups to dynamically adjust their incentive focus based on development stage: exchanges incentivize trading volume, lending protocols attract USDC deposits, and gamefi apps drive task completion.
For developers, the VIP program not only creates a monetization model but also establishes user retention—via a programmatic on-chain grant system that directly distributes INIT tokens to actual users. This means users automatically receive incentives simply by using applications normally, with no extra steps required.
How Can We Achieve +EV (Positive Expected Value) Expansion of VIP Token Supply?
INIT has a fixed total supply of 1 billion (1,000,000,000). Increasing the supply allocated to Initia VIP requires reducing allocations elsewhere.
Keep in mind, INIT inflation serves not only as a source of on-chain security budget but also as an incentive for various activities within the "Interwoven Economy." As a Layer 1 blockchain (L1), economic security is paramount for Initia, as it also secures all Rollups deployed on the Interwoven Stack.
We’ve reached a crossroads—an immovable obstacle. But perhaps, there’s a solution?
Luckily, we’ve discovered a "gold reserve"—a large batch of INIT tokens that will gradually unlock over the next four years and currently have no designated use. Yes, you guessed it—these tokens belong to VCs and early investors holding 15% of the INIT supply.
This decision sparked intense debate. Allowing early investors to stake their unvested tokens doesn’t always yield ideal outcomes. However, Initia will not become another victim of the "Cucked Cosmos Society." We believe we’ve found a balanced solution that ensures positive expected value (+EV) for all Initia stakeholders.
VCs can stake their locked tokens, but must adhere to the following restrictions:
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Rewards from staking will be locked under a 4-year linear vesting schedule.
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We have significantly reduced the staking emission rate, maintaining only a 2%-4% annual percentage yield (APY).
By enabling early investors to stake their tokens and contribute to network security, we can:
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Redirect nearly 15% (approximately 25%) of the total INIT supply to Initia VIP,
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Distribute more tokens to active users and high-quality applications.
We have approached this decision with extreme caution and do not view it as a minor tweak to economic policy—it is a fundamental reallocation of capital aimed at expanding the "Interwoven Economy" and enhancing liquidity.
While other Layer 1 blockchains continue promoting a "scarcity mindset," incentivizing token hoarding by allocating most of their supply to on-chain security, Initia chooses to leverage its supply surplus as a weapon to ignite sustainable network growth.
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