TokenEconomics Specification

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TokenEconomics Specification

As a participant in the decentralized flood insurance marketplace, I need a comprehensive TokenEconomics model that incentivizes participation, ensures marketplace liquidity, and manages risk, while adhering to regulatory compliance in the Southern United States & Puerto Rico.

Acceptance Criteria

• [ ] The system must have a native utility token for transactions, fees, and rewards within the marketplace.
• [ ] Token holders must be able to participate in governance voting to influence marketplace decisions.
• [ ] The token model must incorporate mechanisms for stability to prevent extreme volatility, particularly in the face of natural disasters.
• [ ] There should be a clear token distribution strategy for initial allocation, ecosystem incentives, and long-term reserves.
• [ ] A burn-and-mint equilibrium model must be enacted to align long-term token supply with marketplace growth.
• [ ] Insurance premium calculations must be transparent and adjustable based on community governance decisions.
• [ ] The system must reward users who provide accurate and timely data relevant for assessing insurance risk.
• [ ] Regulatory compliance measures for Anti-Money Laundering (AML) and Know Your Customer (KYC) must be embedded in the token issuance and transfer processes.

  sequenceDiagram
  participant User
  participant TokenEconomics
  participant Governance
  participant DataProvider
  participant Regulator
  User->>TokenEconomics: Purchase tokens
  TokenEconomics->>User: Issue tokens
  User->>Governance: Vote on proposals
  User->>DataProvider: Submit risk data
  DataProvider-->>TokenEconomics: Validate data
  TokenEconomics->>User: Issue rewards
  User->>TokenEconomics: Pay premiums
  TokenEconomics->>User: Provide coverage
  Regulator->>TokenEconomics: Enforce compliance