Vault block rewards are ready to be activated, according to the Interlay tokenomics: 30% of 4 year supply (i.e., 300 million INTR), emitted as follows:
- 40% in the first year (120 million INTR)
- 30% in the second year (90 million INTR)
- 20% in the third year (60 million INTR)
- 10% in the fourth year (30 million INTR)
Once Vault rewards are activated, iBTC minting can begin. The suggested iBTC launch date is 10th August.
Why do Vaults receive block rewards?
Vaults are the heart of the Interlay network. Vaults are network participants who ensure BTC remains locked on Bitcoin while iBTC exists - that is, they enforce the 1:1 peg to locked BTC. To prevent misbehavior, Vaults lock collateral (at launch in DOT) with the parachain such that the collateral value always exceeds the value of the secured BTC. If a Vault misbehaves, their collateral is slashed and users reimbursed.
Vaults take up liquidation risk as well: if the price of the collateral assets decreases significantly compared to BTC, Vaults may be liquidated and lose their collateral. Vaults hence receive INTR as reimbursement for their risk - and to ensure they can protect themselves against hostile governance takeovers. Anyone can become a Vault, anytime.
Reminder: Vaults only earn block rewards if they have BTC locked. Rewards are distributed based on each Vault’s share of the total BTC locked.
Why activate now?
The parachain will soon be ready to start iBTC minting. The suggested launch date for iBTC Vaults is 10th of August. One of the next, and final steps before iBTC launch, is hence to activate Vault rewards via an on-chain governance proposal.
As always, we appreciate your time reviewing this proposal and welcome comments and feedback.
Interlay/Kuntsugi 101: https://docs.interlay.io/#/getting-started/interlay-101
Interlay token economy: https://docs.interlay.io/#/interlay/tokenomics
Vault docs: https://docs.interlay.io/#/vault/overview