ECOSYSTEM ALIGNMENT INCENTIVES The best way to create a long-term store of value is to incentivize long-term holding. ndau holders are given the opportunity to earn extra ndau through Ecosystem Alignment Incentives (“EAI”). ndau held for longer than 30 days may accrue an incentive of ndau at a rate of 2 percent on an annualized basis. As ndau is held longer, this rate increases in 1 percent increments each additional month up to 10 percent when held for 9 months. The chart below shows the EAI structure.
Further, holders can take advantage of the ndau equivalent of a certificate of deposit, holding ndau over a specified period of time to accrue a predetermined rate of additional awarded incentive. In the ndau ecosystem, this is called “locking ndau.” By locking, the holder accrues ndau at a higher rate. Locking ndau for 90 days adds an additional 1 percent to the EAI rate above the incentive structure, as shown in the chart below.
Further increases occur at 6, 12, and 24 months of locking ndau until at 36 months a maximum of an additional 5 percent annualized rate is earned.
Locked ndau immediately begins to accrue EAI at the rate it would be accruing if it had already been held for the lock period, plus the lock incentive. Receiving and immediately locking ndau for 90 days thus immediately begins accruing a 5 percent EAI: 4 percent as if it had already been held for 90 days plus a 1 percent lock incentive. Likewise, ndau purchased and immediately locked for 3 years accrues a 15 percent EAI: the 10 percent rate as if it had already been held for that period plus the 5 percent lock incentive.
It is important to note that EAI is not an automatic entitlement. Further requirements on the ndau holder may be set or modified by the BPC over time in order for the holder to permanently earn the accrued EAI. These additional requirements are to align individual incentives with the objectives of the entire ecosystem and all of the participants therein.
EAI Service Fee
Certain service fees are deducted from EAI. The fees collected are used to fund the continuous growth and operation of the ndau ecosystem.
4 percent Ecosystem Funding:
All EAI is charged a 4 percent fee to help grow the ndau ecosystem by funding functions such as software development and marketing.
1 percent Market Maker Price Discovery:
All EAI is charged a 1 percent fee to fund the Market Maker’s operations.
Additional Fees
Certain fees are only charged in conjunction with a service or particular circumstance.
10 percent Network Operations: EAI incentives are available only to those holders supporting the ndau ecosystem by operating or associating with an ndau network node. Many currency holders will not want to operate their own node and will instead choose to associate with another node operator. A fee of 10 percent of EAI is charged to such holders to cover node operating costs.
5 percent exchange for other services: The BPC may elect to initiate an automatic exchange of up to 5 percent of EAI into other kinds of tokens, still under control of the holder, used for various non-currency services offered within the ndau ecosystem (“side chain services”). These services may include, but are not limited to, identity, dispute resolution, and secure communications.
(Note: this Solutions article also exists on our Knowledge Base - EAI Rate Schedule and EAI Service Fees.)