Token Utility

The SFI token is the native utility token of the Singularity Finance Layer-2 blockchain network, designed to ensure a secure, efficient, and decentralized digital ecosystem. It is the cornerstone of the network’s functionality, integrating economic, operational, and governance roles to foster a sustainable and community-driven platform.

Key Features and Ecosystem Role of the SFI Token:

Powering Network Operations

The SFI token is instrumental in accessing and using the network features and serves as a unit of account to cover the network’s costs.

● Transactions and Smart Contracts: The SFI token is used to pay for all Network Fees, which include costs associated with transactions and smart contract execution within the Layer-2 ecosystem.

● Asset Tokenization: Users who tokenize assets within the ecosystem pay a launch fee in SFI tokens.

● dApp and Protocol Operations: Developers and operators of decentralised applications (dApps) and third-party protocols pay Network Fees in SFI tokens to run their services on the Layer-2 infrastructure.

Network Security and Integrity: Staking and Node Operations

The SFI token is vital for securing the Layer-2 network and maintaining its integrity.

● Node Operations: Token holders can stake their SFI tokens to operate decentralized nodes. These nodes not only validate transactions but also perform specialized tasks such as fraud-proof generation, which identifies and challenges invalid state transitions, thereby enhancing network security.

● Delegated Staking: Users unable to operate their own nodes can delegate their SFI tokens to node operators, pooling resources to increase staking power and share in the rewards.

Ecosystem Incentives: Supporting Sustainability and Rewards

The SFI token incorporates mechanisms to maintain a balanced and sustainable tokenomics. These mechanisms ensure that the network remains secure,decentralized, and incentivized for long-term growth:

● Burning Mechanism: 40% of Net Fees (calculated as gross Network Fees minus operating costs such as Layer-1 gas fees) are permanently burned. This reduces the circulating supply of SFI tokens, creating a deflationary effect that supports the token’s long-term value.

● Ecosystem Incentives Pool: The remaining 60% of Net Fees are allocated to the Ecosystem Incentives Pool, which funds all rewards and incentives. This pool is central to ensuring continued network security, active participation, and ecosystem development.

From the Ecosystem Incentives Pool, rewards are distributed to participants based on their contributions to the network:

● Node Operator Rewards: Node operators earn staking rewards for securing the network. These rewards are based on factors such as uptime, transaction processing, and the number of SFI tokens staked.

● Delegator Rewards: Users who cannot operate nodes can delegate their SFI tokens to node operators. This allows them to share in the staking rewards proportionally, ensuring broad community participation.

This dual approach of deflation through burning and incentives through the Ecosystem Incentives Pool ensures that the SFI token drives both the security and long-term sustainability of the Layer-2 ecosystem.

Decentralized Governance: Shaping the Ecosystem’s Future

SFI token holders are granted governance rights, enabling them to influence key decisions about the ecosystem:

● Voting on Protocol Upgrades: Token holders vote on network enhancements and upgrades, ensuring collective decision-making.

● Allocation of Ecosystem Incentives: The community decides how incentives are distributed, fostering transparency and fairness.

● Strategic Direction: Governance extends to decisions about partnerships, integrations, and other strategic initiatives critical to the ecosystem’s growth. These governance rights do not extend to influencing the issuer’s corporate governance, decision-making, or management structures. Token holders cannot vote on matters related to the issuer’s operations, finances, or legal affairs.

Legal Notice: This description is subject to the Terms of Use, which govern the legal relationship between the Token Holder and the Issuer. For precise details concerning the rights attributed by the Token, reference should be made to the Terms of Use.