Token Economics Model

Token Overview

The Ambassador Token Illustration

Token Identity

The Ambassador (AMB) token is the utility token that powers the blockchain-based storm damage insurance claim handling system. It serves as the primary medium of exchange, governance mechanism, and incentive system within the platform.

Token Specifications

  • Name: The Ambassador
  • Symbol: AMB
  • Decimals: 18
  • Token Standard:
    • Foundation Stage: ERC-20 on Ethereum
    • Intermediate Stage: ERC-20 on Polygon
    • Advanced Stage: Native token on custom blockchain

Token Purpose

The Ambassador token serves multiple purposes within the ecosystem:

  • Facilitate Transactions: Enable seamless payments between all participants
  • Align Incentives: Create economic alignment among stakeholders
  • Reward Participation: Incentivize quality contributions to the network
  • Enable Governance: Provide voting rights for system parameters and upgrades
  • Reduce Friction: Streamline the insurance claim process
  • Create Network Effects: Drive adoption and ecosystem growth

Token Utility

Core Utility Functions

Payment Medium

The Ambassador token serves as the primary medium of exchange within the platform:

  • Insurance providers fund escrow accounts with AMB tokens
  • Contractors and suppliers receive payments in AMB tokens
  • Property owners pay deductibles using AMB tokens
  • Inspectors receive compensation in AMB tokens
  • Platform fees are paid in AMB tokens

Staking Mechanism

Participants can stake AMB tokens to access platform features and earn rewards:

  • Staking requirements vary by role and service level
  • Staked tokens generate rewards based on network activity
  • Staking periods influence reward multipliers
  • Staking provides fee discounts and priority access
  • Staked tokens serve as security deposits for service providers

Reputation System

Token staking is tied to the platform's reputation system:

  • Token staking serves as "skin in the game" for reputation
  • Quality service increases reputation score and token rewards
  • Poor performance risks reputation and staked tokens
  • Reputation scores influence future opportunities
  • Higher reputation leads to increased reward multipliers

Governance Rights

Token holders participate in platform governance:

  • Token holders vote on system parameters and upgrades
  • Voting power proportional to token holdings and staking duration
  • Proposal creation requires minimum token stake
  • Governance participation earns additional rewards
  • Specialized committees for different governance aspects

Fee Payment

Platform fees are paid in AMB tokens:

  • Transaction fees paid in AMB tokens
  • Fee structure varies by operation type and complexity
  • Fee discounts for token stakers based on stake size
  • Portion of fees burned to create deflationary pressure
  • Remaining fees distributed to stakers and platform treasury

Stage-Specific Utility

The utility of the Ambassador token evolves across the three development stages:

Foundation Stage

Basic utility functions:

  • Basic payment functionality
  • Simple staking mechanism
  • Transaction fee payment
  • Initial reputation tracking
  • Limited governance capabilities

Intermediate Stage

Enhanced utility functions:

  • Enhanced staking with variable lock periods
  • Reputation-weighted rewards
  • Basic governance voting
  • Fee discount tiers
  • Liquidity provision incentives
  • Cross-chain compatibility

Advanced Stage

Comprehensive utility functions:

  • Dual-token system with StormShield stablecoin
  • DAO governance with specialized committees
  • Prediction markets for risk assessment
  • Tokenized insurance policies
  • Cross-chain utility
  • Algorithmic stability mechanisms

Token Supply and Distribution

Token Supply Parameters

Supply Metrics

  • Initial Supply: 100,000,000 AMB
  • Maximum Supply: 200,000,000 AMB
  • Emission Schedule: Decreasing rate over 10 years
  • Inflation Rate: Starting at 10% annually, decreasing to 2% by year 5

Deflationary Mechanisms

  • Fee Burning: Portion of transaction fees permanently removed from circulation
  • Staking Lockups: Tokens locked in staking reduce circulating supply
  • Token Buybacks: Treasury-funded buybacks during market volatility
  • Utility Expansion: Increasing token utility creates natural demand

Token Allocation

15%
20%
25%
15%
10%
15%
AMB
Development Team (15%)
Investors (20%)
Ecosystem Growth (25%)
Community Incentives (15%)
Insurance Provider Incentives (10%)
Reserve Fund (15%)
Allocation Category Percentage Amount (AMB) Vesting Period
Development Team 15% 15,000,000 4 years with 1-year cliff
Investors 20% 20,000,000 2 years with 6-month cliff
Ecosystem Growth 25% 25,000,000 5 years, strategic release
Community Incentives 15% 15,000,000 No vesting, earned through participation
Insurance Provider Incentives 10% 10,000,000 3 years, milestone-based release
Reserve Fund 15% 15,000,000 5 years, controlled by governance

Token Release Schedule

Year Development Team Investors Ecosystem Growth Insurance Providers Reserve Fund
1 0% 25% 10% 10% 5%
2 25% 50% 15% 20% 10%
3 50% 75% 20% 30% 15%
4 75% 100% 30% 50% 20%
5 100% 100% 50% 100% 30%
6+ 100% 100% 100% 100% 100%

Token Emission

After the initial token generation event of 100,000,000 AMB, additional tokens will be emitted according to a decreasing inflation schedule:

Inflation Schedule

  • Year 1: 10% inflation (10,000,000 AMB)
  • Year 2: 8% inflation (8,640,000 AMB)
  • Year 3: 6% inflation (5,616,000 AMB)
  • Year 4: 4% inflation (3,260,000 AMB)
  • Year 5+: 2% inflation (stabilized rate)

Inflation Distribution

  • 40% to staking rewards
  • 30% to ecosystem development
  • 20% to community incentives
  • 10% to governance treasury

Economic Mechanisms

Staking Economics

The staking system is designed to encourage long-term token holding and active participation in the network:

Tier Stake Amount Lock Period Reward Multiplier Benefits
Bronze 1,000 AMB 1 month 1.0x Basic platform access
Silver 5,000 AMB 3 months 1.2x 10% fee discount, priority matching
Gold 20,000 AMB 6 months 1.5x 25% fee discount, enhanced features
Platinum 50,000 AMB 12 months 2.0x 50% fee discount, premium features
Diamond 100,000 AMB 24 months 3.0x Maximum benefits, governance committee eligibility

Different roles within the system have different minimum staking requirements:

Role Minimum Stake Purpose
Insurance Provider 50,000 AMB Ensure claim payment capacity
Inspector 10,000 AMB Guarantee quality assessments
Contractor 20,000 AMB Ensure work completion
Supplier 15,000 AMB Guarantee material delivery
Property Owner Optional Access premium features 
// Staking Reward Formula
Reward = Base Rate × Stake Amount × Time Factor × Reputation Multiplier × Tier Multiplier

Where:
- Base Rate: Network-wide base reward rate (e.g., 10% APY)
- Stake Amount: Amount of AMB tokens staked
- Time Factor: Multiplier based on lock period duration
- Reputation Multiplier: Factor based on participant's reputation score
- Tier Multiplier: Reward multiplier based on staking tier

Fee Structure

The platform charges fees for various operations, which are used to sustain the ecosystem and create token demand:

Operation Base Fee (AMB) Fee Allocation
Claim Initiation 10 AMB 70% to stakers, 20% to treasury, 10% burned
Inspection Submission 5 AMB 70% to stakers, 20% to treasury, 10% burned
Contractor Assignment 8 AMB 70% to stakers, 20% to treasury, 10% burned
Milestone Completion 3 AMB 70% to stakers, 20% to treasury, 10% burned
Governance Proposal 50 AMB 50% to voters, 40% to treasury, 10% burned

Fee discounts are provided based on staking tier:

Stake Tier Fee Discount
Bronze 0%
Silver 10%
Gold 25%
Platinum 50%
Diamond 75%

Incentive Mechanisms

The system includes various incentive mechanisms to encourage quality participation:

Participation Rewards

Rewards for active participation in the network:

  • Successful Inspection: 10-50 AMB based on claim complexity and quality
  • Timely Claim Processing: 5-20 AMB based on processing speed and accuracy
  • Quality Contractor Work: 20-100 AMB based on work quality and timeliness
  • Supplier Reliability: 10-50 AMB based on delivery speed and quality
  • Governance Participation: 1-10 AMB based on voting consistency

Reputation System

Reputation scores influence reward multipliers:

  • 0-20 Score: 0.5x reward multiplier, 2.0x penalty multiplier
  • 21-40 Score: 0.8x reward multiplier, 1.5x penalty multiplier
  • 41-60 Score: 1.0x reward multiplier, 1.0x penalty multiplier
  • 61-80 Score: 1.2x reward multiplier, 0.8x penalty multiplier
  • 81-100 Score: 1.5x reward multiplier, 0.5x penalty multiplier

Penalty Mechanisms

Penalties for poor performance or violations:

  • Missed Inspection: 10-50 AMB penalty and reputation decrease
  • Poor Quality Work: 20-200 AMB penalty, reputation decrease, potential stake slashing
  • Late Delivery: 10-100 AMB penalty and reputation decrease
  • Fraudulent Activity: 100-1000 AMB penalty, reputation reset, stake slashing, potential ban

Liquidity Mechanisms

The system includes mechanisms to ensure token liquidity and price stability:

Liquidity Pools

Decentralized exchange liquidity pools for token trading:

  • AMB/ETH pool on decentralized exchanges
  • AMB/USDC pool for stable value exchange
  • Liquidity provider rewards from transaction fees
  • Liquidity mining program during initial launch phase
  • Incentivized liquidity provision through token rewards

Market Making

Mechanisms to ensure market efficiency and price stability:

  • Automated market maker for token liquidity
  • Strategic partnerships with market makers
  • Buy-back and burn program from treasury
  • Price stability mechanisms
  • Circuit breakers for extreme volatility

Governance Model

Governance Structure

The governance model evolves across the three development stages:

Foundation Stage

Limited governance:

  • Limited governance by development team
  • Community feedback through proposals
  • Parameter adjustments based on usage data
  • Centralized decision-making with community input

Intermediate Stage

Enhanced governance:

  • Token-weighted voting on system parameters
  • Proposal system for feature requests
  • Multi-signature approval for critical changes
  • Delegated voting capabilities
  • Timelock for implementation of changes

Advanced Stage

Full DAO governance:

  • Full DAO governance structure
  • Specialized committees for different aspects
  • Quadratic voting for certain decisions
  • On-chain execution of approved proposals
  • Governance incentives and rewards

The Advanced Stage includes specialized governance committees:

Technical Committee

Responsible for technical aspects of the platform:

  • Smart contract upgrades
  • Security improvements
  • Technical parameter adjustments
  • Integration of new technologies

Economic Committee

Manages economic parameters and incentives:

  • Fee structure adjustments
  • Reward rate modifications
  • Staking parameter updates
  • Treasury management

Dispute Resolution Committee

Handles disputes between participants:

  • Claim disputes
  • Work quality disagreements
  • Payment conflicts
  • Reputation appeals

Insurance Standards Committee

Defines standards for insurance operations:

  • Inspection standards
  • Damage assessment guidelines
  • Contractor quality requirements
  • Compliance with regulations

Governance Parameters

Key parameters that can be adjusted through governance:

Parameter Initial Value Adjustment Method Adjustment Frequency
Staking Reward Rate 10% APY Governance vote Quarterly
Fee Structure As defined Governance vote Semi-annually
Inflation Rate 10% annually Algorithmic with governance override Annually
Proposal Threshold 10,000 AMB Governance vote Quarterly
Voting Period 7 days Governance vote Semi-annually
Quorum Requirement 10% of staked tokens Governance vote Annually

Proposal Process

The governance proposal process follows a structured workflow:

1

Proposal Creation

A token holder stakes the required tokens and submits a formal proposal with detailed specifications.

2

Discussion Period

A 3-day period for community discussion, feedback, and potential revisions to the proposal.

3

Voting Period

A 7-day voting window where token holders can cast votes based on their voting power.

4

Execution Delay

A 2-day delay before implementation to allow for emergency cancellation if issues are discovered.

5

Implementation

Automatic execution of approved proposals through the governance contract.