PIP-10: Paloma Chain Mainnet Tokenomics

PIP Name: PIP#10 - Paloma Chain Mainnet Tokenomics

Status: Proposed

Author(s): @LARRY

Type: Chain Proposals

Discussions-to: PIP-10: Paloma Chain Mainnet Tokenomics

Created: 12/06/2022

Simple Summary

Create a fair & sustainable token distribution model for Paloma Chain on mainnet and welcome feedback from the community to provide signal on the quality of the model.


The Paloma Protocol is the fastest, most secure, and most scalable cross-chain messaging and gas
management oracle. Paloma is a new blockchain protocol for DeFi, NFTs, and on-chain gaming.

Paloma’s unique value proposition is its high-speed message-relay architecture, designed to minimize communications latency between blockchain endpoints. Paloma validators are incentivized to deliver maximum relay speeds, computation execution, and uptime service.


The Paloma economic model is straightforward: Validators receive gas refunds for cross-chain
message relays on behalf of message senders that want to send messages to multiple chains as
quickly as possible.

Gas, Security, and speed fees are paid in either Paloma’s currency GRAINs, or the native currency of the target chain receiving a message. Paloma is a message-delivery fee market.

Validators compete to deliver high message throughput across as many chains as possible, at the lowest cost, and with the lowest response latency possible. Paloma token stakers receive a portion of the message-relay fee revenue as staking rewards.

Paloma Chain Mainnet Tokenomics


GRAINS in Paloma Chain mainnet: 5,000,000,000

Stake Holder Share of GRAINs Amount of GRAINs Vesting Period
Volume Team & Advisors 15% 750,000,000 Lock-up / 4 Year Vest
Paloma Foundation 42.5% 2,125,000,000 No Lock / Delegated
Paloma Ecosystem Fund 40% 2,000,000,000 No Lock / Delegated
Validators 2.5% 125,000,000 No Lock / Delegated

Volume Team & Advisors

Paloma Chain’s dedicated Software Development and Marketing team contracted by thePaloma Foundation to deliver Paloma Protocol and launch its community.

The Paloma Foundation

Formally recognized as Columbidae Networks, LTD Caymans, the Paloma Foundation is a non-profit organization focused on supporting and sustaining the development of the Paloma Chain relay fee market. Initiatives include:

  • Ecosystem Support Program:
    • The Ecosystem Support Program was built to provide financial and non-financial support to further accelerate growth of entities within the Paloma Ecosystem that consists of the fee marketplace for cross-chain message relaying.
  • Paloma Conferences:
    • Online & offline conferences to educate and inspire entities building on the Paloma Chain and its relay fee market. The goal of Paloma conferences and events will be to grow awareness and partnerships for Paloma’s message relay utilities.
  • Paloma Fellowship & Grant Program:
    • An initiative to build on the Paloma community, bridging socio-economic gaps to solidify the relay fee market ecosystem.
  • Community Pool & Ecosystem: Grants/incentives dedicated for future Paloma Chain builders and contributors.
  • Validators: Community members running validators and professional validators that volunteer their computing power to maintain Paloma’s blockchain’s integrity during the Paloma testnest and coming mainneet. Paloma needs validators to secure the chain for mainnet and the launch of the Paloma fee market system.

The Paloma Message Relay Fee Market

The Paloma Message Relay Fee Market is a validator and message sender market for the clearing of fee relay services provided by the Paloma validator set. The fee market is a critical economic activity that gives GRAINs value. The fee market is the heart of Paloma’s Tokenomics.

Paloma Chain Gas Fees

The Paloma Chain gas fee market is the core economic activity of the paloma blockchain as a messenger chain. The Paloma native token, GRAINS, pays for the successful and timely delivery of messages by the Paloma blockchain validator and relayer set. Below, we outline the proposed market for fees that will give GRAINS value.

1. Gas Fee for message and schedule insertion

This is the variable fee market gas cost for inserting a message, and its schedule, into the Paloma Blockchain. This fee is set by each validator for message delivery

2. Gas Fee for message status Queries

This is a fixed fee determined by consensus for running computation to verify that a scheduled message has enough gas to be run.

3. Gas Fee for auxiliary services

This is the variable fee market gas cost and these are set by governance.

  1. If pigeons haven’t sent any message recently, they need to send a “keep alive” message
  2. Pigeons also send a message to attest the coins pigeons hold on the target chain
  3. Pigeons provide evidence that valset updates and smart contract deployments happened

Target Chains Gas Fees

Gas Fee on Target Chain for Message Broadcast

This is the target chain gas fee, which may be variable or fixed, and is charged by the target chain for:

  1. Inserting a transaction into a Compass-EVM contract and broadcast on a target blockchain
  2. Deploying a new Compass-EVM contract
  3. Sending update valset to keep the smart contract up to date with the latest valsets

How to submit the proposal

palomad tx gov submit-proposal \
--gas auto 
--fees 400ugrain

with the proposal.json:

  "title": "Paloma Mainnet Tokenomics Design Proposal for Community Testnet Vote",
  "description": "Paloma Mainnet Tokenomics Proposal for Paloma Mainnet Genesis",
  "recipient": "[YOUR_PALOMA_ADDRESS]",
  "type": "Text",
  "deposit": "10000000ugrain"

How to Vote on the Proposal

palomad tx gov vote 9 yes \
--chain-id paloma-testnet-13 \
--fees 400ugrain \
-b block


The engineering team behind the Paloma Protocol at VolumeFi Software Inc, wishes to encourage community discussion around the eventual launch of Paloma’s mainnet. Open discussion and presentation of proposals aim to achieve three critical goals.

  1. Transparency: Paloma’s mainnet must aim to achieve as much transparency as possible so that its small, but growing flock of community members will have a chance to do the work of expressing their views and opinions via open discussion as well as forum vote. Although the GRAINs of this proposal are testnest GRAINs, the success or failure of the vote will be a signal for the tokenomics model.
  2. Community: The Paloma community is a small, but growing flock of pigeons and other birds. The goal of this proposal will be to encourage community conversation around Palomoa’s proposed tokenomics as well as its relay fee design for validators and stakers. Also, the Testnest validators who supported Paloma over the past six months will want to know how their efforts will fit into the next phase of Paloma’s lifecycle as a mainnet chain.
  3. Improvement: Paloma’s tokenomics are not considered perfect. Paloma hopes to engage the community to help create a practice of ongoing improvements that will receive reviews, comments, and even criticisms by the global community of pigeons. Paloma Improvement Proposals aim to improve the protocol and its functioning. Thus, the publish of the Paloma Tokenomics model will help improve Paloma in the long run.

About Paloma

Paloma Protocol is a Cosmos-SDK blockchain protocol custom-built for omnichain communication that allows permissionless controls of any contract on any chain. Built by Volume, Paloma delivers the world’s first intelligently scheduled and automated smart contract transaction execution for the Cosmos ecosystem. The protocol enables developers to remotely control the transmission of value without the need to wrap, bridge tokens, or trust validators with their digital assets. Led by founding members of Sommelier, Paloma is building the primary communication layer of Web3.