The Qredo Network is a decentralised custody platform designed to offer businesses and investors a secure and efficient way to manage digital assets.

Its main product, the Qredo Wallet, uses a Multi-Party Computation (MPC) architecture to provide enhanced security and enables users to set up access controls and governance rules. With features like Qredo Swaps and the integration with MetaMask Institutional, the platform allows for low-cost trading of crypto assets across different blockchains and secure access to Web3 dApps.

## Project overview

Qredo is currently going through a decentralization process. They are moving from a model where validator nodes are operated by the team to a federated PoS where a set of trusted parties runs the validator nodes and users will stake directly into a single validator pool. This is an intermediate phase toward a final delegated PoS network (aka Phase 1).

In order to ensure the Phase 1 transition is successful, the economics of the network need to be healthy and the team needs to be in a strong financial position. Thus, some cryptoeconomic changes and analyses are required here.

## Goals

There are two main areas of work requested by Qredo’s team:

1. Token utility and staking under the federated PoS model (Phase 1) → The goals for this work phase are:
1. Describe how the token will function under the federated PoS model
2. Explore options to increase the token utility and value to the network
3. Concretize the staking model and analyze the underlying incentives for users and validators
2. Token supply and redistribution for a sustainable network → The goals for this work phase are:
1. Analyze the current state of supply
2. Propose how to allocate and vest the second billion tokens from the original supply
3. Explore options to refund the Treasury

## Milestones

In terms of timeline, the Qredo team committed to having the full tokenomics design by end of Q2 and to share an initial draft with the community by end of May. Because of this timeline, the project will be split into two main phases:

1. Draft phase:
- This phase will last 5 weeks → until the end of May
- During this phase, we will focus on designing and documenting the broad mechanics of the token. We will also propose some sensible values for the main tokenomics parameters. However, the final values will be defined with the caveat that they will likely be updated during the simulation phase.
- The main deliverable of this phase will be a **draft tokenomics report** that can be shared with the community. The report will contain the results of our initial analysis and a description of the current tokenomics design. We can also support the team with the draft of a simplified version of the report that may be simpler to understand by less technical audiences.
- This first draft will contain the following tokenomics components:
- Principles of the utility of the token
- Draft burn schedule *(concrete values may be subject to update)*
- Draft token distribution *(concrete values may be subject to update)*
- Staking mechanics and method to derive APY *(concrete values for APY may be subject to update)*
2. Tuning and validation phase
- This phase will last one more month → until the end of June
- During this phase, we will focus on validating and tuning the initial tokenomics design. We will build models and simulations to test the design against different economic scenarios and we will tune the main parameters based on pre-defined success metrics (to be iterated with the team)
- The main deliverable of this phase will be the **final tokenomics report** that can be shared with the community. The report will contain the technical details and the results obtained from the simulation. It will also provide the final parameter values.
- In addition to the technical report, we will also draft a s**implified report** with the overarching changes to the tokenomics of Qredo and the reasoning and expected impacts. this report will be easier to digest by a broader audience.

## Deliverables

There were three main deliverables for this project, namely:
- A set of written reports, which can be read in this HackMD book. You simply need to navigate in the menu on the left.
- Code to reproduce the analysis, which can be accessed in our [GitHub repository](https://github.com/protocol/CryptoEconLab-Qredo-Collab).
- Presentation at CryptoEconDay Paris 2023, which can be watched on [Youtube](https://www.youtube.com/watch?v=74fDt_MYgBU&t=1s).