What is the token economics model of Scroll(SCR) coin?

Scroll's (SCR) dual token model utilizes the SCR token for governance and utility, while the sETH token represents staked ETH within the ecosystem, ensuring network security and transaction throughput.

Dec 07, 2024 at 08:18 pm

What is the Token Economics Model of Scroll (SCR) Coin?

Scroll (SCR) is a layer-2 zk-rollup protocol that aims to improve scalability, privacy, and transaction costs on the Ethereum network. The SCR token is the native currency of the Scroll ecosystem, and it plays a central role in the tokenomics model that governs the network's operation and value accrual.

Token Economics Model of Scroll (SCR) Coin

1. Fixed Token Supply:
   The total supply of SCR is fixed at 1 billion tokens. This ensures that the supply remains finite and limits inflation over time, providing a solid foundation for the token's value.
2. Dual Token Model:
   Scroll employs a dual token model, comprising the SCR token and the sETH token. SCR serves as the governance and utility token for the network, while sETH is a wrapped Ethereum token that represents staked ETH within the Scroll ecosystem.
3. Token Distribution:
   The distribution of SCR tokens was conducted through three rounds of funding: Seed, Series A, and Series B. Seed investors received 10% of the total supply, Series A investors received 25%, and Series B investors acquired 30%. The remaining 35% is allocated to the Scroll team and is subject to vesting schedules.

4. Token Utility:
   SCR token holders have various use cases and incentives to participate in the network:

   • Governance: SCR holders can vote on proposals related to network upgrades, fee schedules, and ecosystem initiatives, influencing the protocol's direction and evolution.
   • Staking: Users can stake SCR tokens to earn staking rewards in the form of sETH tokens. Staking secures the network and increases the transaction throughput capacity.
   • Gas Fees: SCR is used to pay gas fees for transactions on the Scroll network. The fees are relatively low compared to Ethereum's gas prices, incentivizing developers and users to migrate to Scroll.
   • Ecosystem Growth: SCR tokens can be used to support ecosystem development initiatives, such as developer grants, hackathons, and research programs.

5. Token Value Accrual:
   The value of SCR is primarily derived from its utility as a governance and utility token within the Scroll ecosystem. As the network grows in adoption and usage, the demand for SCR is expected to increase due to its role in network operations and governance.

   • Network Growth: The more applications and users join the Scroll network, the higher the demand for SCR for gas fees and staking, potentially driving up the token's value.
   • Governance: As the Scroll ecosystem evolves, SCR token holders have a say in the network's future direction, making the token more valuable as the network matures.
   • Ecosystem Development: SCR tokens support the growth of the Scroll ecosystem by incentivizing developers and community members to contribute to its advancement.