Ionic Score

Ionic’s goal is to adequately reward the most dedicated users.

To do so, we examined our current points system, as well as the existing points meta driving rampant speculation across crypto today. Truth be told, protocols must build while maintaining a delicate balance - reward/incentivize protocol usage without being farmed and left for dead shortly thereafter.

As mentioned in ION's Core Goals we have set out to build the best money market in DeFi. To do that, we need the best users in DeFi and a way to measure/reward how great these users are.

Introducing the Ionic Score.

Think of one’s Ionic Score as their report card for Ionic Usage. A shift away from the $ per point per day game to a multi-faceted scoring system that rewards consistency, longevity and proper risk management.

What does a traditional credit score take into account?

  • Longevity - how long your account has been active

  • Credit Usage - how well you manage your credit risk

  • Consistency - how frequently you pay off your debt

  • # of Accounts - how many sources of credit do you have

In a similar vein, the Ionic Score is multifactorial and incorporates more than just monetary contributions to the system. A credit score-like system creates more nuanced user profiles that ultimately work better for our incentive mechanism.

What are the components of the Ionic Score?

  • Credit Usage - amount of borrowing activity

  • Activity Score - bonuses for

    • Activity across multiple chains and

    • Borrowing/lending via isolated pools

  • Health Score - maintaining a Health Score greater than 1.2

  • Participation - bonus for active engagement in our voting system

  • Referrals - rewards for spreading the word of Ionic and bringing new users to the system

We believe that a user’s complete Ionic profile, not just the amount of $ put into the system, should be rewarded; thus, Ionic Score’s release will be aligned with the conclusion of our Points Program. However, Ionic Score will stand as our protocol’s loyalty/reputation system, as well as a gateway to advanced features on Ionic! A few main benefits of having a high Ionic Score includes:

  • Greater Yield Opportunities (think - cashback like a credit card company!)

  • Better Rates = Higher LTVs

  • Access to earlier features - such as isolated pools & supply vaults (coming soon!)

  • Governance Voting

  • Boosted $veION multipliers

Ionic Protocol will allow users to mint their Ionic Scores onchain as Dynamic NFTs. A dynamic NFT (dNFT) is an NFT with encoded smart contract logic that enables it to automatically change its metadata based on external conditions. Issuing Ionic Score to users in this way allows both the protocol and the user to update scores to reflect a users most up-to-date user profile.

A user’s Ionic Score will automatically update via smart contract on a monthly basis; however, users are able to manually update their Ionic Score as needed intra-month.

Activating Ionic Score

To activate Ionic Score, protocol users must have at least 2.5% of the value of their total Ionic collateral position staked as $veION.

For example, if user Alice has $100 of wETH supplier on Ionic, Alice should have at least $2.5 worth of $veION staked.

Note: due to the price fluctuation of wETH, we recommend maintaining a buffer of roughly 5% of one’s collateral value to avoid losing out on token emissions.

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