Utility

Overview

The SNR token serves as the native utility token of the Sonr network, enabling various functions from transaction processing to governance participation. Its multi-faceted utility design ensures sustained demand and value accrual.

Core Utilities

1. Means of Payment

The primary utility of SNR is facilitating transactions across the Sonr blockchain for user account management and application operations.

2. Staking Mechanisms

SNR tokens enable network security and participation through various staking options:

Validator Staking

• Minimum Stake: Required SNR deposit to run a validator node
• Delegated Staking: Users can delegate SNR to validators for rewards
• Slashing Protection: Validators must maintain good behavior or risk stake loss

Service Node Staking

• Highway Nodes: Stake required for running Highway service nodes
• IPFS Storage: Minimum stake for operating storage infrastructure
• Availability Guarantee: Staking ensures node uptime and reliability

3. Governance Participation

SNR tokens grant voting power in the decentralized governance system:

Module-Specific Operations

Service Module (x/svc)

SNR tokens are required for service operations within the decentralized service marketplace:

• Service Registration: Pay SNR registration fees to claim unique TLD domains (e.g., music.sonr, defi.sonr)
• Capability Requests: SNR deposits for requesting root capabilities via MPC signing
• Service Updates: Fees for modifying service metadata or requesting additional permissions
• TLD Management: Economic safeguards prevent domain squatting through registration fees

DWN Module (x/dwn)

The DWN module enables revolutionary gasless onboarding while using SNR for advanced operations:

• Gasless Vault Claiming: Initial MsgClaimVault transactions require no SNR fees
• Vault Configuration: SNR fees for updating vault settings and WASM runtime upgrades
• MPC Operations: Transaction fees for multi-party computation within secure enclaves
• Cross-Chain Operations: SNR payments for bridging assets and multi-chain vault management

UCAN Module (x/ucan)

Authorization operations require SNR for security and spam prevention:

• Root Capability Issuance: SNR fees for initiating MPC threshold signing requests
• Revocation Processing: Transaction fees for on-chain capability revocations
• Delegation Chain Verification: Computational costs for validating complex authorization chains
• MPC Signing Participation: Validator rewards for participating in multi-party computation

DID Module (x/did)

Identity operations use SNR for registration and management:

• DID Registration: Fees for creating new decentralized identifiers
• Authentication Linking: SNR costs for adding WebAuthn credentials or other auth methods
• Assertion Management: Fees for linking/unlinking identity claims and verifications
• Transaction Execution: SNR payments for UCAN-authorized transactions on behalf of DIDs

Economic Mechanisms

Demand Drivers

The token's value is driven by multiple demand sources:

$$\text{Demand} = \text{Transaction Volume} + \text{Staking Locked} + \text{Governance Participation}$$

Supply Dynamics

Effective supply is reduced through:

• Staking Lockups: Validators and delegators lock tokens
• Governance Stakes: Proposal creation requires token deposits
• Service Collateral: Service providers stake SNR for TLD registration
• Fee Burns: Partial fee burning reduces total supply

Developer Incentives

Service Development

• Service Registration Subsidies: Reduced TLD domain costs for verified developers
• Root Capability Grants: Free MPC signing for approved service capabilities
• Revenue Sharing: Earn portion of service interaction fees through UCAN delegation
• Integration Support: Subsidized vault interaction costs for new services

Infrastructure Provision

• Validator Operations: SNR staking rewards for consensus participation and MPC signing
• MPC Node Operations: Additional rewards for multi-party computation services
• IPFS Storage: Compensation for decentralized vault configuration storage
• UCAN Verification: Fees for running delegation chain validation services

Future Utilities

Enhanced Module Features

• Advanced UCAN Features: Zero-knowledge capability proofs and cross-chain validation
• Vault Upgrades: Seamless WASM runtime updates and social recovery mechanisms
• Service Marketplace: Categorized service discovery with reputation systems
• Multi-sig Services: Shared service ownership through DAO governance

Cross-Chain Integration

• IBC UCAN Verification: Cross-chain capability validation fees
• Multi-Chain Vault Operations: Enhanced cross-chain asset management
• Bridge Service Registration: Specialized TLD domains for bridge operators
• Interchain DID Resolution: Cross-chain identity verification services

Privacy and Security Enhancements

• Privacy-Preserving MPC: Enhanced secure multi-party computation features
• Conditional Revocations: Time or event-based capability revocations
• Hardware Vault Support: Integration with dedicated secure hardware
• AI-Powered Workflows: Natural language vault command processing

Utility Summary

The SNR token's utility encompasses:

1. Essential Operations: Core network functions and transactions
2. Security Provision: Staking for network consensus and safety
3. Governance Rights: Democratic participation in protocol decisions
4. Economic Incentives: Rewards for valuable contributions
5. Access Control: Gateway to premium features and services

This comprehensive utility design ensures the SNR token remains central to the Sonr ecosystem's growth and sustainability.