As we continue to build Kreivo, a treasury funded parachain for decentralized organizations and governance, we’re committed to creating a sustainable ecosystem that benefits the entire Kusama community. We’re proud to introduce our innovative approach to tokenomics, which focuses on generating revenue through membership sales and advanced payment fees, rather than relying on inflationary token issuance.
Membership Model: Unlocking Pre-Paid Gas
To kickstart our sustainability model, we’re introducing a membership system that allows DAOs to purchase pre-minted memberships for their users. These memberships are NFTs that represent “pre-paid gas” that can be used to interact with the chain for free without worrying about acquiring KSM besides being required for community governance. Memberships come in different tiers, offering varying levels of “gas tank” sizes and expiration dates. Existing communities/DAOs control the supply of memberships via governance to ensure a steady stream of revenue for the protocol treasury.
Example of membership pricing:
| Renewal/Size | S | M | L |
|---|---|---|---|
| Quarterly | - | 0.3 KSM | 0.6 KSM |
| Six-monthly | 0.1 KSM | 0.5 KSM | 1 KSM |
| Yearly | 0.2 KSM | 1 KSM | 2 KSM |
Organizations can assume the costs of memberships themselves, apply for treasury funds to have the memberships sponsored by the protocol, or pass down the cost to the end user. For instance, a video-streaming business using the Payments Pallet can charge a subscription service paid in stable coin. Users automatically become members of the DAO and are given a membership NFT to interact with the chain, allowing them to buy other shows and movies without having to hold KSM or a different token.
Advanced Payment Fees: Extracting Value from Transactions
For longer term sustainability, our Payments Pallet offers a configurable Fee Handler, allowing the system to charge fees proportionally to transaction size, sender/receiver, good/service being paid, and more. This approach enables DAOs to create their own fee structures to match their business model and the parachain to accrue value from high value interactions. This not only sustains the protocol but also contributes to the global economy of Kusama.
Let’s consider two examples for a similar payment:
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A client directly contacts a freelancer for a specific task and pays with stable coin using Kreivo’s Payments Pallet. The system(Kreivo treasury) charges the client 1% on top of the payment and the freelancer is discounted a 3%, a reasonable fee compared to traditional platforms, both parties see value in using the system as the built-in escrow mechanism and dispute resolving system protects them from any potential misbehavior by the other party.
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Now imagine the client and freelancer join a community set up as a DAO, where members use smart contracts to rank and curate freelancers. The DAO sets its own fee structure based on what kind of freelancing job is being conducted. Now when the client issues a payment to the freelancer via the freelancing DAO, the client is charged 0.5% of the payment that goes to her local community, and the freelancer is charged 1% that goes to the DAO and 1% to the system, a cheaper option compared to the p2p payment that incentivizes people to form organizations with added value.
Fee handlers can go far beyond just charging fees. They could be used for discounts, personal savings, pension plan and insurance from a salary and much more!
When sustainable?
In our early alpha testing phase the last month, Kreivo’s treasury went from zero to collecting enough KSM to cover its costs of blockspace for the coming few months 
Kreivo communities will use their own governance to vote in the parachain’s governance to purchase core time via XCM with their newly acquired funds.
Covering costs of infrastructure and blockspace seems very feasible now but we are only getting started, the protocol is still in its infancy and there is a ton of features the Virto team wishes to implement based on user’s feedback. In the short term Virto will still need the support of KSM holders so expect us coming back to ask for your support 
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… In the meantime, come join us! it’s now possible to easily create you very own community with our preview app(in alpha).
We are exited to serve all kinds of use cases for on-chain organizations, perhaps you’ll use it to set up(or join) an ecosystem collective to participate in governance like the KSM Community? or validate your next start up idea without having to go through the expensive and tedious process of setting up a company just to receive payments? maybe in you next hackathon distribute funds transparently; or leverage the power of XCM to issue tokens on AssetHub controlled by a decentralized organization; You can even migrate your entire parachain governance to Kreivo to enjoy the latest advancements in OpenGov! 