The QUILL Tokenomics — an In-depth Look at Ink Finance(1)
Ink Finance (INK) is currently the most powerful fiscal and financial management tool for DAOs in the entire crypto space, which can meet the daily governance needs from small and loosely organized communities to large and professionally managed DAOs.
The key features that make INK stand out in a market with many competing DAO tools are:
- True plug-and-play configurability that allows DAOs to highly customize their own governance system according to their mission, scale, and the dynamic evolving process.
- DAOs can use INK to issue, risk manage, and settle or clear customized financial products, by establishing their on-chain reputation and financial competence.
- Holders of INK’s native token (QUILL) can sponsor other DAOs and their managers to support and share their growth, unlocking individual value with a governance utility.
Fiscal and financial management is a core mandate of any DAO with reasonable operation scale. INK provides a complete set of professional on-chain solutions to help these DAOs build robust fiscal frameworks, and issue flexible financial products based on the assets they generate or manage, thereby obtaining the services provided by the wide range of decentralized financial facilities in the crypto world.
At present, INK has become the governance tool of choice for many benchmark DAOs, including emerging VCs and crypto managers and syndicates, Web3 protocols and applications, traditional institutions such as art auction houses, and even mainstream financial companies. In addition to the comprehensive fiscal and financial management tools, INK also enables DAOs to manage their members’ credit and merits, balancing the power of all stakeholders, establishing the competence and reputation across multiple blockchains.
QUILL — INK Finance’s Platform Token
As Invested Capital of Facility
Most of INK’s functions are designed to be used completely for free, including the core governance functions that allow DAOs to deploy a set of on-chain contracts through total customization. However, DAOs with long-term operational goals, especially those who need to use advanced financial tools, need to acquire and pledge QUILL tokens, which is equivalent to investing in facility resources. Unlike the typical Web2 SaaS pricing model that charges users based on subscription, QUILL is a form of resource or capital that any user DAO must invest into.
This scheme directly endows QUILL tokens as a form of working capital, while greatly reducing the risk of a DAO’s technology investment, because no matter whether a DAO can eventually achieve its business success, the infrastructure resource acquired in its early stage will still have capital value at exit. Compared with a DAO’s own investment to build a governance system with limited features, or the Web2 model of subscription fees, the advantage is obvious in encouraging DAOs to use INK, because of the total avoidance of the wasted construction investment or subscription fees.
The amount of staked QUILLs required to enjoy the advanced features is initially set at a minimum of 10,000, and will be determined by a fully transparent voting process by the INK DAO. The user DAO meanwhile obtains the right to participate in the governance of INK with the stake — INK’s DAO users are part of INK’s governance.
As an Investment Capital for Ecological Incubation
Although QUILL is positioned as a form of infrastructure resource to be invested in by DAOs, INK does not shut out those who may lack the start-up capital. If a DAO does not have enough funds to acquire QUILL to be staked to use the facilities, INK’s own decentralized DAO community will vote on whether to allow this DAO to “rent” the INK facilities with its own tokens. If such a proposal is accepted, these tokens will need to be accrued into the INK DAO Treasury according to a pre-set schedule.
This mechanism is the INK Sponsorship. In the above use case, it is equivalent to that the client DAO gets pledged QUILLs from the entire INK DAO community to sponsor it to use the INK facilities, and the latter receives the client DAO’s token as a rent in return. INK DAO can, by voting, swap these “rent” tokens in the secondary market for the QUILL tokens in circulation, and the QUILLs bought back will be deposited into the staking emission pool to support future operation. Since the total emission of the pool at any moment will last for a long period, placing the recycled QUILLs at the pool’s bottom effectively achieves a “soft destruction”, which forms a sure upward pressure on the price of QUILLs, benefiting all of its holders.
Under this mechanism, by accumulating other DAO tokens, the INK DAO Treasury becomes an incubator portfolio serving the entire community of QUILL holders. This is a fair and efficient economic system, and INK DAO (a tooling DAO) and its user DAOs can benefit from each other and grow together.
As Financial Service Fee Capture Tool
For INK services that generate financial liquidity or take custody of assets under management, the INK facility charges proportional fees according to the transaction volume (the issuance, settlement, and clearing) and the size of the assets under management. Fees are drawn from the cryptocurrencies (e.g. ETH or USDC) being handled in the above financial services. They are then swapped for QUILL tokens in circulation, and the QUILLs bought back will be deposited into the staking emission pool to support future operation. Since the total emission of the pool at any moment will last for a long period, placing the recycled tokens at the pool’s bottom effectively achieves a “soft destruction”, which forms an upward pressure on the price of QUILLs, benefiting all of its holders.
As Individual Sponsor’s Capital
In the case of sponsorship provided by the entire INK DAO community, as previously discussed, a DAO lacking upfront capital can “rent to use” the INK facility, but it must pass the voting of the INK DAO. To support a more vibrant and fully market-driven sponsorship scheme, INK also allows individual QUILL holders to provide sponsorship for DAOs and their key managing members. In this use case, in addition to receiving QUILL’s built-in staking rewards, the sponsors can share the revenue generated from the sponsored DAOs and their managers, on a negotiated basis. The sponsored DAO can vote to determine the income sharing ratio between the sponsor and the DAO, and such decisions are executed and enforced on-chain.
About Ink Finance
Ink Finance is a one-stop financial management toolset that empowers DAOs with governance economy, asset or credit financing, investment management, and fiscal control, integrated via a plug-and-play framework. It aims to establish a gold standard for DAO financial management that can reshape financial organizations of the Web3 era.