TLDR:

Proposal to repurpose the stablecoin reserve to fund on-chain incentives to boost liquidity and use of the Radix ecosystem, as well as start a Growth Fund.

Points-based incentives campaign would run over 18-24 months across multiple “seasons”, including “Season 0” looking at activity from Babylon launch to ~June 2025.

Growth fund allocated for high value activities like T1 Listings, bridges, VCs, etc.

Tokenomics adjustment: shorten emissions schedule by 20 years, max supply by ~6 billion XRD.  

Radix has always focused on the three pillars that matter for creating distributed networks of value, the developer experience, the user experience, and scale.

Now, with the ecosystem poised and requiring explosive growth, there’s an opportunity to accelerate adoption, deepen liquidity, and ensure Radix becomes a true hub for crypto.

How? By strategically repurposing the 2.4 billion XRD in the stable coin reserve for strategic use, primarily towards a carefully designed incentives campaign that rewards users, grows TVL, and strengthens the Radix community.

Why an Incentive Program?

Points based incentives programs have proven to be one of the most powerful tools in crypto for onboarding users and catalyzing growth.

Projects like Hyperliquid and Sonic have demonstrated that well-executed incentive programs can transform an ecosystem overnight - driving massive inflows of liquidity, increasing user engagement, and turning speculators into long-term holders and supporters.

Radix already offers the best-in-class developer experience (DevX) and user experience (UX) with its asset-oriented architecture - all alongside the only real path to Hyperscale in the industry. But to unlock full potential, we must bring in more users, liquidity, XRD holders, and capital - fast.

The campaign we're planning isn't just a crude airdrop of free money to try the network. It's a long term investment focused on building sustained network effects on Radix. While establishing genuine on-chain usage and liquidity, users and developers will experience Radix’s unmatched ease, speed, and security - ensuring they never return  to clunky, congested alternatives.

Why Now?

The Foundation's opinion is that the most immediate and effective way to supercharge ecosystem growth is to deploy this reserve directly into the hands of users who will actively contribute to Radix’s success.

Here’s why:

1. Immediate Network Effects: Every additional liquidity provider, trader, and staker increases the efficiency and usability of Radix infrastructure. The more capital in the ecosystem, the more attractive it becomes for developers and institutions.
2. Higher TVL = Greater Credibility: DeFi thrives on total value locked (TVL) as a key metric of success. More TVL means more liquidity for dApps, tighter spreads for traders, and a stronger foundation for lending protocols and other financial primitives.
3. Drive demand for XRD and reward active users: Allocating tokens to engaged users directly aligns ecosystem participation with incentives. By encouraging users to hold or stake XRD and linking rewards to active use of assets and capital within the ecosystem, demand for XRD naturally increases. Unlike traditional liquidity mining or basic airdrop campaigns, such as RadQuest, this approach fosters genuine, sustained on-chain activity through meaningful participation.
4. Competing with Other L1s: The crypto landscape is competitive, and Layer 1s are aggressively incentivizing users to move their liquidity. Radix has superior technology - but we need the right incentives to encourage migration and sustained adoption.
5. A Self-Sustaining Cycle: Once users migrate, liquidity deepens, and developers see real engagement, Radix can gain momentum. The network effects will drive continued growth even after the airdrop phases out.
6. Distribution Metrics: The stable coin reserve stands out in our tokenomics.  Those discovering Radix might not be aware of its intended purpose and cause them concern.  Distribution of that reserve by any means improves the tokenomics significantly and overall optics of Radix.

How the Airdrop Would Work

Rather than a one-time giveaway that attracts only mercenary farmers, the incentive campaign would be best structured in progressive, points-based seasons that reward genuine engagement over time:

1. Season 0 (Retroactive Rewards): Users who have been active in the eco-system since Babylon will receive an initial reward, as recognition for early adoption. Season 0 currently has a target end date of June 2025. Multiple seasons would then run over 18-24 months minimum, with the duration of each dependent on primary goals for that season. Each consecutive season will have significant incentives to hold or re-deploy any rewards earned from previous seasons, including from Season 0.
2. Ongoing Seasons: Users earn points based on real tangible activity, including holding or staking XRD (LSUs), holding or providing liquidity for stable assets (USDC, USDT), providing liquidity and trading volume across whitelisted assets, engaging in DEX swaps, lending and borrowing with white listed assets. Additional points can be earned through NFT activities (holding, trading, listing collections), holding and minting tokens, and engaging with specific dApps through first-time use, repeated transactions, and cross-dApp interactions. This ensures deep and sustained ecosystem participation beyond passive holding.
3. Tapered Rewards: The campaign rewards per season gradually reduce, ensuring a smooth transition from incentive-driven growth to organic adoption.

A short word on farmers - by weighting earning points across a range of activities, which increase the longer the account has consistently been active, applying minimum XRD requirements and the fact that interactions to catch rewards cost a fee, we can minimize the risk of mass low-value farming, as ultimately many wallets would need to be net contributors of value for periods of time.

Repurposing the Stable Coin Reserve: A Catalyst for Growth

For an incentives campaign to be effective in the current market, it needs to be sizable enough to get attention and attract long-term users and capital - a small scale campaign doesn’t deliver ROI. The recent Sonic airdrop allocated around 6% of supply - the effects of which have contributed towards a surge in TVL and CMC ranking.

For Radix,  this would require at minimum 650m XRD. However, given the difference in USD terms compared to Sonic, we are proposing that 1 billion XRD is allocated to ensure similar results can be achieved.

Funding this entirely from existing Foundation reserves would significantly deplete the treasury, severely limiting resources needed for essential future development, marketing, and ecosystem support.

Previously, Radix allocated 2.4 billion XRD as a locked reserve for a future stablecoin project. Since then, the landscape has changed significantly and looking forward, this reserve is unlikely to be utilized for that purpose.

The Foundation is proposing to repurpose this reserve to deliver the growth essential for the success of the network and ecosystem. This would be part of three proposed changes to the tokenomics:

1. Approximately 1 billion XRD from the stable coin reserve would be allocated to the incentives campaigns, which would run for 18-24 months and heavily incentivise holding or potentially vesting the rewards.
2. To offset the increase in circulating supply this would bring, the current network emission window will be reduced. We are proposing to reduce the emissions window from 40 years to 20 years, which would reduce the max supply of XRD by approximately 6 billion. This would also improve the optics of fully diluted value (FDV) as reported on sites such as CoinMarketCap and CoinGecko.
3. Creation of a 1 billion XRD Growth Fund: while the Foundation operational treasury remains healthy with regard to current activities (protocol development, marketing, etc.), developer incentives, and network incentives, we must ensure the Foundation can pursue expensive elements of eco-system growth such as T1 exchanges, including for eco-system projects, bridges, liquidity, partnerships, and supporting external investment into the network (e.g. VCs).
4. The remaining 400m XRD would be held to either extend the incentives, growth fund, or be burnt.

As our position in the market improves, we will continually reassess the above. The long-term preference is supply reduction, therefore it is desirable to burn XRD from the newly created  Growth Fund where possible given a set of met criteria which we will later define.  Additionally, any remaining XRD in the incentive campaign allocation will be burnt upon its conclusion if it is decided not to extend it.

The Big Picture

The fundamental tech-stack of Radix is unmatched. If Radix is going to change trend, the Foundation's number 1 priority must be increasing the demand for XRD and making Radix the most compelling ecosystem for DeFi builders, traders, and liquidity providers.

Having investigated a full range of options, the most promising strategy is the combination of a massive yet strategic distribution of XRD combined with Radix’s superior technology, UX, DevX, and a roadmap to Hyperscale that will position Radix as a leading crypto hub.

The alternative? Doing nothing with the 2.4 billion XRD while competitors onboard users and dominate liquidity flows, or burn it, and hope for a short term flash mob. We believe it is a clear choice - repurpose this reserve and make Radix the home of the next generations of DeFi.

Given the scope of this proposal we welcome input from the community at this early stage of planning. Please share your thoughts in this reddit thread.

We also hope to get input from the ecosystem as exact details of the incentives structure, criteria, and distribution are defined. If you are keen to participate in initial focus group(s), please submit an application by filling in this form: https://go.radixdlt.com/incentives-focus-group

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