$RED Tokenomics

Learn about the tokenomics that power the fastest-growing layer-2 privacy network.

ReDeFi is a Financial Market Infrastructure (FMI) platform, built to improve the current monetary system. We’ve already published BAX tokenomics for the ReDeFi layer-1 blockchain here, and today we are announcing RED and its token economy in our ecosystem.

• ReDeFi Layer-2 is a sidechain, built on top of the ReDeFi layer-1 blockchain. ReDeFi’s layer-2 solution will be launched in two phases:

V1: Scalability

The initial layer-2 mainnet focuses on enhancing scalability. The sidechain operates independently while maintaining a secure connection to the main ReDeFi L1 chain for asset transfers and finality. This allows for increased transaction throughput, providing a smoother user experience.

V2: Privacy-Focused

This phase introduces a privacy-focused feature. It is designed to handle on-chain funds (Onchain Money) for banks and financial institutions requiring enhanced confidentiality for clients or B2B cross-border transactions etc. In essence, v2 allows secure and private transactions, while it maintains the scalability and cost-efficiency benefits of layer-2.

Overview of $RED

$RED is the primary token of the ReDeFi L2 sidechain. Every transaction or dApp interaction on our network will use $RED as payment. This compensates validators who secure the network and ensure transactions are processed and recorded.

• Total Supply at Genesis: 100,000,000 $RED
• Inflation Rate: 5% yearly (after 2.5 years)
• Staking & Delegation: Holders will be able to delegate $RED to validators or run their own validator nodes to secure the network.
• Transaction Fees: ReDeFi L2 uses $RED to pay for transaction fees.
• Native Liquidity: $RED token can be used as native liquidity within the ReDeFi ecosystem.

Value Accrual

For Token Holders:
Token holders benefit directly from the network’s growth through the productive re-deployment of transaction fees, which are reinvested to drive demand and enhance services.

For Builders and Contributors:
A thriving ecosystem attracts builders. Revenue is allocated to ecosystem projects and public goods, funding the creation and support of innovative projects.

Users and Community Members:
A share of the revenue generated is reserved and to be allocated for community growth, funding ongoing ecosystem or other community initiatives.

Revenue Generation

• Network Usage Fee: Transactions and contract executions incur a usage fee. These fees will be allocated to the protocol’s Treasury in the beginning and strategically distributed afterwards or as needed i.e. ecosystem projects, validators, nominators, holders etc.
• Medium of Exchange: $RED is the native currency for transaction finality.

ReDeFi’s revenue comes from the fees generated by transactions and dApp usage. The initial transaction fees will take a % of the transaction value, so it will be adjusted over time based on network usage and demand. The goal is for the protocol to become self-funded through its operational activities and strategic partnerships. This will ensure the long-term viability of the network and create a thriving ecosystem for all participants.

$RED Token Allocation

$RED will initially have a total initial supply of 100,000,000, distributed among the categories outlined in the chart and table below.

Token Release Schedule

To foster trust within our community, we provide a detailed breakdown of the $RED token allocation and release schedule. This ensures that all stakeholders understand the token economics and distribution strategy.

$RED tokens will be introduced into the market at a controlled inflation rate after 2.5 years, with a capped annual increase of 5%, to ensure incentive alignment with ecosystem growth.

Initial Supply and Allocation

• Initial supply at Genesis: 100,000,000 RED
• Additional tokens will be issued annually at a rate of 5% to support network security and participants.
• Any tokens not sold during the Sale events will circle back to Ecosystem/Community % allocation.

Team — 10% (10,000,000 RED)

Release Schedule:

• Team tokens are dedicated to current and future core team members contributing to the growth and success of the ReDeFi network.
• 9-month lockup period with a 36-month linear release.

Private Sale — 1.5% (1,500,000 RED)

Release Schedule:

• 1,500,000 RED will be allocated to private investors.
• 6-month lockup period with a linear release over 18 months.

Launchpads— 5% (5,000,000 RED)

Release Schedule:

• Tokensoft — Pre-Sale (5,000,000 RED). Registration Portal to be open on the 1st of July 2024.
• Linear release over 6 months.

Main Sale (IDO or IEO) — 3% (3,000,000 RED)

Release Schedule:

• 50% will be available at TGE; the rest will be linearly released over 3 months.

Aidrops— 5% (5,000,000 RED)

Release Schedule:

• 1st airdrop is 1% or 1,000,000 RED tokens and will be allocated to BAX holders proportionally on a random snapshot date. Participants need to hold BAX in either the BABB app or a self-custody wallet like Metamask, Ledger, etc. The rest of the airdrop parameters are TBA at a future time.
• Each airdrop will have a 12-month linear release schedule from the snapshot date.

If you haven’t downloaded the BABB app, you can do so here:

Treasury — 25% (25,000,000 RED)

Release Schedule:

• Treasury tokens will be allocated for future development, research, maintenance, legal and other necessary activities.
• 20% will be available at TGE, with the rest released over 48 months.

Community & Ecosystem — 26% (26,000,000 RED)

Release Schedule:

• These tokens are reserved and will be used via grants and incentives to ambassadors, contributors, builders, and ecosystem partners.
• 10% will be available at TGE, with the rest released over 48 months.

Liquidity Providers — 12% (12,000,000 RED)

Release Schedule:

• Tokens will be released over 48 months to ensure sustained liquidity, token listings and market-making.

Staking — 12.5% (12,500,000 RED)

Release Schedule:

• Staking tokens are reserved for rewards to validators/nominators and will be released linearly over 48 months.

Note: All token contracts will be verified and published on-chain. Only follow our official announcements and even then, double-verify or ask multiple times before clicking any links or engaging with a contract.

About ReDeFi

ReDeFi is a Financial Infrastructure Platform (FMI) merging TradFi and DeFi. It uses a Substrate Layer-1 blockchain for decentralisation, while the Layer-2 sidechain focuses on privacy for B2B cross-border transactions, banks and financial institutions clients and so much more. The MVP is Onchain Money, a tokenised deposit system that mirrors fiat currencies in traditional bank accounts on-chain, enabling transactions using standard bank details.

Risk Disclaimer:
Don’t invest in cryptocurrencies unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.