Staking Models in ILov.eU

The tokenomics structure of the ILU token now supports two distinct staking models for subdomain management: the Proxy Ownership Contract and the Temporary Rental Contract. These mechanisms allow users to secure subdomains through time-bound staking models with different levels of commitment.

1. Proxy Ownership Staking Model

This model allows users to secure partial control of subdomains for a limited period by staking a fraction of the full staking requirement (e.g., 10%–50%).

• Mechanism: A user (e.g., Miguel Knight for madrid.ilov.eu) can stake a percentage of the total staking requirement to become the proxy owner. This period is time-bound, typically between 3 to 12 months.
• Conversion: Before the proxy period expires, the proxy owner must stake the remaining amount to convert the subdomain to full ownership.
• Failure to Convert: If the proxy owner fails to convert within the given timeframe, the proxy stake is burnt, reducing the overall ILU supply permanently. This burn mechanism creates a deflationary impact, protecting the value of ILU for long-term holders and ensuring that only serious stakeholders participate.
• Governance Rights: Proxy owners have limited governance rights for day-to-day operational decisions but cannot participate in high-stakes governance. If the proxy period expires without conversion, all rights are revoked and the proxy stake is burnt.

2. Temporary Rental Staking Model

Designed for users seeking short-term, low-risk control over a subdomain.

• Mechanism: Users stake a smaller amount (e.g., 5%–20%) of the full staking requirement for a predefined period (e.g., 1 month to 1 year).
• Return of Stake: After the rental period ends, the stake is returned to the renter (minus fees), and the subdomain reverts to a neutral contract in the marketplace.
• No Burn Mechanism: Unlike the Proxy Contract, there is no burn mechanism for temporary rentals.
• No Governance Rights: Temporary renters have no governance rights but can manage basic subdomain settings (e.g., URL redirection). The focus is on low-stakes use cases, and renters do not participate in DAO voting or management.

Impact on ILU Supply and Value

The burn mechanism in the Proxy Contract reduces the circulating supply of ILU tokens, creating scarcity and enhancing long-term value. The Temporary Rental Contract offers a reclaimable stake, maintaining the overall ILU supply while generating additional fees for platform maintenance.