TELIP: Year 2 TEL Allocation Proposal
Abstract
This TELIP proposes a Year 2 (1/1-12/31/2025) TEL allocation of 900M TEL (10% of the TEL Treasury) to sustain core platform development and miner incentives. Key allocations include 364.4M TEL for Telcoin Network development, 200M TEL each for validator incentives and TELx liquidity mining, 105.6M TEL for TAN developers and stakers, and 30M TEL for Council Member compensation. The proposal aims to finance critical infrastructure development while maintaining established miner reward rates, with particular focus on launching Telcoin Network mainnet through comprehensive engineering, security, and operational investments totaling roughly $2.277M.
Motivation
The primary duties of the Telcoin Platform governance system, as self-organized and determined by the four Miner Groups and their elected Councils within the Association, are to:
- Provision: Plan and finance Platform infrastructure construction and maintenance, to provide information, and other collective goods.
- Allocate TEL: Regulate TEL flows sustainably throughout the Platform for the four miner groups to harvest from the system based on their individual share of production, according to rules set and enforced by their Miner Councils.
The Platform and Treasury Councils use the TELIP process to govern the TEL Treasury, the primary source of TEL emissions, to accomplish these two critical governance duties. This TELIP submits for review and deliberation a TEL allocation for year two (2025) which ensures the Association has sufficient budget to finance critical infrastructure, namely Telcoin Network, while retaining the same TEL issuance levels for miners to harvest according to rules set by their local councils.
Specification
The Year 2 TEL allocation from the TEL Treasury includes a total issuance of 900,000,000 TEL, or 10% of the remaining 9B TEL in the TEL Treasury, in line with the rules set in the initial Telcoin white paper and approved via this Association’s founding proposal: TGIP1: Establishing the Telcoin Platform and Association. These allocations are slightly modified from their original form due to the ongoing development costs of Telcoin Network and the outstanding TANIP proposal to activate TEL issuance for Stakers and Developers.
| Safe | Description | Y2 TEL Allocation | Rationale |
|---|---|---|---|
| TAN Council (Polygon) | Developer and Staker incentives and TAN Council budget | 105,555,556 | TAN TEL issuance has not commenced, so this amount will serve to equal out the total TEL between Developers and Stakers |
| TELx Council (Polygon) | Liquidity miner incentives and TELx Council budget | 200,000,000 | Month 1 TEL rewards have already been distributed, so the exact number is actually 183,333,333.33 |
| Telcoin Network | Validator incentives and network development costs | 200,000,000 | Same amount as last year |
| Council Members | Council member stipends | 30,000,000 | Same amount as last year |
| TAO Safe (Polygon) | Developing Telcoin Network mainnet and driving GSMA adoption | 364,444,444 | Budget needed to develop and implement Telcoin Network |
| Total Y2 2025 | TEL Incentives | 535,555,556 | |
| Telcoin Network Development Budget | 364,444,444 | ||
| Total Emissions | 900,000,000.00 |
TAO Budget Overview - 2025
| Expense | Estimated Costs 2025 |
|---|---|
| Engineering | $1,000,000.00 |
| Security Audits | $500,000.00 |
| Cloud Services | $250,000.00 |
| Bug Bounty | $500,000.00 |
| Total USD Costs | $2,250,000.00 |
| Total TEL Allocation | 364,444,444 |
| TAO Total USD ($0.00625) | $2,277,777.78 |
TAO Budget Breakdown - 2025
Engineering: $1,000,000
- Rust protocol 2x
- Smart contracts 1x
- DevOps 1x
- Frontend dev work / Design 1x
- Security engineering and hardening 1x
Security Audits: $500,000
- Smart contracts
- Consensus registry
- Staking
- Rewards
- Bridging
- Consensus registry
- Frontends
- Block explorer
- Bridging
- Infrastructure audit
- Block explorer
- Mainnet
- Protocol
- Public RPC
- Internode RPC
- Gossip network + NVV
- State sync
- Consensus code
- Execution logic
- Key management
Cloud costs: $250,000
- Block explorer
- 4 node testnet
- KMS
- Static IP
- GCP security scanning
- 4 node devnet
- 4 node alpha mainnet
- KMS
- Yubikeys
- GCP security scanning
- Discovery nodes
- Stress test / benchmark
- Domains
Bug Bounty Program: $500,000
- Set aside to finance a public bug bounty program through third party integrations and services providers
Rationale
The proposed allocation aims to balance resource distribution across various critical areas to achieve the following objectives:
- Telcoin Network Launch: The allocation to Validators (TN) ensures the infrastructure for the Telcoin Network mainnet is robust and scalable, facilitating MNO (Mobile Network Operator) setups and supporting decentralization efforts.
- Liquidity Provision: Funds allocated to TELx incentivize liquidity providers, ensuring sufficient liquidity across decentralized platforms, which is essential for ecosystem growth and user engagement.
- Developer and Staker Participation: TAN allocations support active developers joining the Telcoin ecosystem and reward stakers who grow the network through their connections.
- Operational Stability: The allocation to TAO ensures that Telcoin Network development continues at a rapid pace while adhering to strict security design and practices.
- Transparency: By presenting a detailed budget for Year 2, the Telcoin Association reinforces its commitment to transparency and accountability to the community.
Implementation
-
Budget Approval: Upon approval of this TELIP, the specified TEL amounts will be allocated to designated safes.
- Safes will be managed on Ethereum and Polygon as appropriate, ensuring secure custody of allocated TEL.
-
Operational Oversight: The TAO will oversee disbursements and expenditures in alignment with the approved budget. Bi-annual reports will provide detailed updates on fund utilization while ensuring operational efficiency.
-
Council Member NFTs and Compensation: Council Members hold special governance NFTs that serve as both proof of their elected position, proposal and voting authority across their jurisdiction, and a mechanism for receiving TEL compensation. When elected, each Council Member receives an NFT that automatically streams TEL emissions throughout their 12-month term. For the upcoming Year 2 (2025), these NFTs will maintain the same emission rate established in Year 1, providing consistent compensation of 909,090.909 TEL annually per Council Member. This continuity ensures stable governance incentives while the platform evolves.
-
Governance and Resource Allocation: After approval, the TEL allocations will be transferred from the Treasury to designated safes across different areas of the Telcoin Platform. Each governing council will then have complete autonomy over their allocated funds within their jurisdiction - for example, the TELx Council manages liquidity mining incentives, while the TAN Council oversees developer and staker rewards. These transfers are irreversible and final, reflecting the polycentric nature of the platform’s governance, and the authority and autonomy of its governance units. Should any area require additional funding from the TEL Treasury beyond these allocations, whether for expanding miner incentives or supporting new platform developments, the community must approve such changes through a new TELIP proposal. This structure ensures both local autonomy and community oversight of the platform’s resources.
Transfers
As a result of an approved TELIP proposal, the following TEL transfers will be made from the TEL Treasury:
| Safe | Transfer Amount |
|---|---|
| TAN Council (Polygon) | 105,555,556.00 |
| TELx Council (Polygon) | 183,333,333.33 |
| Telcoin Network | 200,000,000.00 |
| Council Members | 30,000,000.00 |
| TAO Safe (Polygon) | 364,444,444.00 |
Concluding Remarks
This TELIP represents a critical step in Telcoin’s evolution, allocating 900M TEL to drive platform development and sustainable growth. The budget balances essential infrastructure investment - particularly the development of Telcoin Network mainnet - with continued miner incentivization across all platform layers.
The comprehensive engineering, security, and operational investments outlined in the TAO budget demonstrate our commitment to building robust, secure infrastructure. Upon approval, these allocations will enable the timely launch of Telcoin Network while maintaining the platform’s decentralized governance model through transparent fund management and community oversight.
Send Money Smarter,
Parker Spann