In an ecosystem with a growing number of rollups, aligning the incentives of all participants is crucial. Although there have been attempts to achieve this, most encounter a few common core problems:
Misalignment of incentives for dApps that generate high levels of on-chain activity and value
Economic underutilization of the native token
Inefficient distribution of protocol-level grants and incentives to foster long-term value and alignment
Initia aims to address these issues for Interwoven Rollups through a novel incentive alignment mechanism known as the Vested Interest Program (VIP). This is done by programmatically rewarding valuable economic activities:
Rollup receive reward allocations for creating innovative apps and new use cases for the INIT token
Users earn INIT tokens from performing beneficial actions or meeting criteria set by the L2s.
Finally, by allocating a portion of the overall rewards directly to the rollups, the VIP program ensures that the rollup teams, its users, and INIT holders are long-term aligned with the success of the ecosystem.