7. Smart Contracts and Governance

Smart Contracts and Governance

Income Layer is powered by smart contracts that automate financial processes. These smart contracts are designed to be trustless, meaning that participants can engage with the system without needing to trust a central authority.

Trustless Execution

Smart contracts automatically execute actions based on predefined rules, removing the need for intermediaries and reducing the risk of fraud or manipulation. For example, UBI distributions, staking rewards, and token burns are all governed by smart contracts, ensuring that they are conducted fairly and transparently.

Decentralized Governance

One of the key features of Income Layer is its decentralized governance model. Governance rights are distributed among participants based on the amount of $INCOME tokens they stake within the system. Users who stake their tokens are granted governance privileges, allowing them to propose and vote on changes to the system. This includes decisions on treasury management, future system upgrades, or changes to economic policies such as the tax or burn rates.

This locked governance model incentivizes long-term participation by ensuring that only those with a vested interest in the ecosystem have the power to influence its future direction. The longer tokens are staked, the greater the user's governance weight, encouraging users to stay engaged and committed to the system’s long-term success.

Treasury Management

A crucial component of the Income Layer ecosystem is the treasury. The treasury is funded through a percentage of the taxes and fees collected on transactions. These funds are used to maintain liquidity, distribute UBI, and ensure the long-term viability of the platform. To safeguard the ecosystem, 50% of the staked value in nodes is held as treasury funds. This provides a buffer against market volatility and ensures that there is sufficient capital to meet the system’s obligations, such as UBI payouts and infrastructure upgrades.