Introduction

Stride’s mission is to serve the Cosmos Hub community by providing the best liquid staking experience possible—and now, with Stride Swap, by delivering deep, native liquidity via a Hub-based DEX purpose-built for Eureka. Stride has received numerous security audits and uses rate-limiting as a security feature; and Stride has an unparalleled liquid staking user experience.

But another important thing is the Stride token. While not every crypto project needs its own token, in Stride’s case a token is necessary.

The Stride tokenomics have been designed with three complementary outcomes in mind:

• Quickly and effectively distribute Stride governance power across the communities Stride serves

• Facilitate social coordination

• Build and maintain value for the STRD token

The following tokenomics plan achieves these three outcomes.

Stride’s Unique Position

Stride is in the unique position of launching with a pre-existing product-market-fit and a means of generating significant and sustainable revenue from day one. Stride’s products can easily be monetized simply by charging a fee on swap volume routed through Stride Swap and on staking rewards earned by liquid staked tokens.

So whereas most crypto projects give themselves a long “inflation runway” in order to buy time to establish product market fit and find a way to generate revenue, Stride has a relatively short inflation runway. Stride incentives and staking rewards are front-loaded. After an initial burst of incentives and staking rewards, Stride will survive due to its sustainable revenue accrual mechanism. In Stride’s case, most emissions are behind us, emitted in 2022-2024. STRD is in its sustainability era. 

The Value of the STRD Token

The STRD token has two main sources of value: its voting power and the fees collected by Stride.

STRD is valuable for its governance power, as there are many crucial governance decisions that the community of STRD holders must make. STRD holders decide: which validators to stake underlying tokens with, how to weight said validators, how to spend community pool funds, what additional features should be designed for the protocol, and so on. Stride’s position as a central chain to Cosmos DeFi makes protocol governance valuable.  

STRD is also valuable for the fee collected by Stride. Stride collects 10% of the staking rewards of all liquid staked tokens, and will also collect a fee on all swaps routed through Stride Swap. 80% of these fees are used to buy back STRD on the open market and burn it. The remaining 20%

20% of these rewards will go to benefit ATOM in exchange for consuming the Cosmos Hub’s security by way of ICS, either via distribution to ATOM stakers, buying back and burning ATOM, or some other mechanism to be decided by STRD governance. The remainder of these fees are used to buy back STRD on the open market and burn it.

The disposition of Stride’s fees is always subject to change based on STRD governance.

Token Allocation: Genesis Supply

The Stride governance token is called STRD. At genesis, the circulating supply was 9,200,000 STRD.

Token Allocation: Terminal Supply

STRD has a maximum supply of 100,000,000 STRD. Half the supply will be in circulation by the middle of year two, and 95% will be in circulation by the end of year three.

Token Emissions: Block-by-Block

Stride has three types of token emissions: block-by-block emissions, emitted every block on the Stride blockchain; incentives distribution; and tokens vesting to core contributors and partners.

In the first year, 9,450,000 STRD will be emitted via block-by-block emissions. These emissions will be allocated to four categories: staking rewards, strategic reserve, initial security budget, and staking rewards. Every year block-by-block emissions will be reduced by 50%, until they asymptotically reach zero. In other words, Stride has a “halvening” every year. <note where we are wrt the halvening cycle and emissions. cite a staking APR/inflation rate, which is low, so bullish!>

A total of 18,900,000 STRD, or 18.9% total supply, will be emitted via block-by-block emissions.

Token Emissions: Incentives Distribution

Unlike other Cosmos blockchains, the Stride incentive pool is available at launch, not emitted block-by-block. The Stride DAO, controlled by STRD-holders,decides how the incentive pool is distributed.

A total of 31,000,000 STRD, or 31% total supply, will be emitted as incentives.

Token Emissions: Vesting

STRD tokens vesting to Stride core contributors and Stride partners are vested linearly over two years with a one-year cliff. This means that neither the core contributors nor the partners receive any STRD tokens until one year post-launch, at which point they begin to receive STRD linearly on a month-by-month basis, which lasts for an additional two years.

At genesis, aA total of 16,700,000 STRD vests to Stride's partners, and 24,200,000 STRD to Stride's core contributors.

Vesting tokens may be staked, but are not eligible for staking rewards. This ensures staking rewards on vesting tokens do not dilute existing STRD holders.

All Emissions

This chart displays all STRD emissions. Ultimately, the Stride DAO and the Stride Foundation will use their discretion to determine when their STRD is actually “spent.”

Description of Allocation Categories

Airdrop: 6,300,000 STRD, or 6.3% total supply

• A genesis airdrop was allocated to ATOM, OSMO, and JUNO stakers, and subsequent airdrops were allocated to the communities of other new blockchains on-boarded by Stride.

• The airdrop category also included the Switching Cost Rebate Program, where Stride users will receive additional airdrops for depositing with Stride.

Staking rewards: 5,200,000 STRD, or 5.2% total supply

• Staking rewards given to STRD stakers.

Community incentives: 31,000,000 STRD, or 31% total supply

• Distributed to incentivize the usage of Stride liquid staking and select Stride Swap liquidity pools

Community growth: 3,600,000 STRD, or 3.6% total supply

• Distributed to pay for community services. The DAO may wish to operate a support team similar to the Osmosis Support Lab. The DAO may also wish to pay for community events, pay ambassadors, content-creators, moderators, and so on. 

Initial Security Budget: 2,200,000 STRD, or 2.2% total supply

• For ongoing audits, for developing rate-limiting solutions, insurance, or other similar security purposes.

Strategic Reserve: 10,910,000 STRD, or 10.91% total supply

• The strategic reserve is entrusted to the Stride Foundation, whose mission is to promote the growth and long-term success of Stride..

 Core contributors: 24,200,000 STRD, or 24.2% total supply

• These tokens incentivize current and future core contributors.

Partners: 16,700,000 STRD, or 16.7% total supply

• Stride Labs has partnered with many respected Cosmos validators as well as crypto venture capitalists in order to bring the vision of Stride to reality.

Discussion

Stride is positioned at the heart of Cosmos Hub DeFi, providing both the first Eureka-powered DeFi platform built on the Cosmos Hub and the largest liquid staked token for ATOM. Stride’s tokenomics are designed such that the success of the Cosmos Hub’s vision directly translates to Stride’s own success. Stride is deeply incentivized to bring about the future envisioned by IBC Eureka. One network. Unlimited chains. Powered by STRD. ATOM and STRD.