Background
Staking rewards represent the network’s inflation mechanism, designed to incentivize validators and the broader community for securing and expanding the ecosystem. Currently, 100% of network inflation is allocated to token stakers in recognition of their role in bootstrapping the network.
The protocol already supports directing a portion of inflation to a separate pool contract on the execution client. Initially, this mechanism was designed as a Universal Basic Income (UBI) contract, distributing tokens to validators based on participation rather than stake size. This design aimed to ensure smaller validators received sufficient rewards to cover operational and infrastructure costs. However, the allocation rate for this pool is currently set at 0%.
Proposal
This proposal recommends allocating 5% of network inflation to a newly designated IP Community Pool (formerly the UBI Pool). This pool will programmatically distribute rewards based on on-chain metrics to support key ecosystem participants, such as IP creators, dApp developers, and small validators. The precise distribution mechanism will be determined by the Story Foundation in accordance with its governance framework.
At the current inflation rate of 20 million tokens per year, this allocation would reserve 1 million tokens annually for the IP Community Pool.
Rationale & Benefits
• Diversified Incentives: Expanding incentives beyond stakers fosters a more balanced and sustainable ecosystem.
• Ecosystem Growth: Supporting IP creators and developers enhances network utility and adoption.
• Long-Term Sustainability: This approach complements the initial 10% foundation token allocation, ensuring ongoing ecosystem development rather than relying solely on upfront grants.
By implementing this change, the protocol can better align incentives with long-term ecosystem health while maintaining a fair and transparent reward structure.