The Orcfax platform includes a Cardano-native utility token which has been named $FACT. This utility token has been designed with a limited number of explicit uses. $FACT can be used for:
- Payment by consumers for data publication, either by a heartbeat publication model or an on-demand publication model
- Staking by our data validator nodes to participate in oracle processes
- Reward payments to validators for participation in the Orcfax node network
- Voting power in Orcfax DAO governance decisions
Importantly, Orcfax has grounded the utility of the token by minting a fixed supply; there will only ever be 1 Billion FACT tokens, and 50% of this total supply has been reserved for validator node rewards to incentivize participation.
Utility 1: Payment
The FACT token is used in the Orcfax network as the form of payment for the fees charged to publish new fact statements.
Orcfax feed consumers (e.g. dApp, smart contract) seeking to fund feeds which are published on a user-stipulated heartbeat schedule will have the cost of publication quoted in FACT.
Alternatively, if an Orcfax feed consumer needs a more current update for a given datum feed (e.g. ADA/USD) than is available on-chain, then an on-demand publication request can be triggered. The cost of publishing this new fact datum on-chain will likewise be quoted in $FACT.
While consumers will also have the ability to pay in ADA, these transactions will incur an additional fee (covering the costs of converting the ADA to FACT) tokens in order to fulfill the feed payment. The ADA which was used to fund publication will be sold for FACT.
Utility 2: Staking
$FACT will also be used by Orcfax validator node operators as staked collateral to incentivize good performance and trust in the network.
To become an Orcfax Validator, users are required to 1) mint and/or hold a Validator license, and 2) deposit $FACT tokens into the Orcfax validator smart contract.
- There are only 100 validator licenses available for node operation. During the origin minting process, each license cost 100,000 $FACT.
- The required $FACT deposit will be determined by market value as of 1 March 2024, whereby either 500,000 $FACT or 10,000 USD equivalent in $FACT will be required (i.e. whichever $FACT amount is larger on that date).
By requiring operators to put up a certain amount of $FACT to run a node, operators demonstrate their “skin in the game”. Orcfax decided on the required amount of $FACT which simultaneously encourages a diverse community of node operators while also discouraging bad actors.
On January 9th, 2024 Orcfax announced published its Orcfax Validator License Announcement, which outlined what potential node operators and non-validators could look forward to as licenses became available and as the incentivized testnet (ITN) was rolled out.
If, for whatever reason, a node reports irregular data or has persistent networking issues, then their deposited stake will be slashed by the protocol. This is both a penalty for jeopardizing the integrity of the Orcfax network, as well as an incentive to re-calibrate their node operations.
Utility 3: Rewards
When a fact statement is published on chain the validator that was randomly selected to put that statement on-chain will be rewarded with FACT tokens. This means that because the amount of Validator licenses are limited, more feeds means more rewards will be distributed to each active validator.
The initial version of the validator network (V1) will be designed to select validators at random to publish a fact statement, giving all validators an equal chance of earning a reward. Future models will weight this random distribution by biasing rewards to those with higher $FACT delegation.
A full 50% of the FACT token allocation has been reserved to subsidize the payment of validator node rewards. This will incentivize network participation long enough to allow the network to become fully self-sustaining via its publication fees.
Validators have the ability to estimate potential rewards that they can expect by utilizing the initial rewards calculator.
The calculator allows users to simulate certain scenarios by modifying the most important parameters that define the estimated rewards (like number of feeds). The yellow fields can be modified by the user. Some fields include notes to help users understand how the calculation works.
Utility 4: Voting
Governance of the Orcfax network, including its technical operations, R&D, community management, new feed nominations, fee schedule, etc., will all be transitioned from Orcfax Ltd. to a Decentralized Autonomous Organization after the network has proven to be healthy and self-sustaining.
As different proposals are brought to the Orcfax DAO for approval, the FACT token will serve as stake in weighted voting scores. That is to say, the more FACT that an Orcfax DAO member holds, the more weight their up or down votes will have.