Economics

Horizon Protocol's economic model incentivizes honest participation through fee distribution, staking, and dispute resolution.

Fee Structure

Mission Completion (5-Way Split)

When a mission completes successfully:

Recipient	Percentage	Type	Purpose
Performer	≥90%	Guaranteed	Reward for completion
Protocol	2.5%	Fixed	Platform sustainability
Labs	2.5%	Fixed	R&D and development
Resolver	2%	Fixed	Dispute resolution pool
MetaDAO	0-1%	Variable	Platform fee (e.g., iTake)
SubDAO	0-2%	Variable	Business fee (e.g., Restaurant)

Inclusive 10% Fee Model

Fixed Fees (7% base):

• Protocol (2.5%) and Labs (2.5%) fund platform operations and development
• Resolver (2%) funds the dispute resolution pool

Variable Hierarchy Fees (up to 3%):

• MetaDAO fee (0-1%): For vertical platforms like iTake
• SubDAO fee (0-2%): For individual businesses like restaurants
• Total fees never exceed 10% - performer always receives ≥90%

No Guild = No Hierarchy Fee:

• For missions without a guild, performer receives full 90%

Example: No Guild/Hierarchy

For a $100 USDC mission without guild:

Performer:    $93.00 (93%)
Protocol:     $2.50  (2.5%)
Labs:         $2.50  (2.5%)
Resolver:     $2.00  (2%)
MetaDAO:      $0.00  (0%)
SubDAO:       $0.00  (0%)

Example: With Guild (3% fee)

For a $100 USDC mission curated by a guild with 3% fee:

Performer:    $90.00 (90%)
Protocol:     $2.50  (2.5%)
Labs:         $2.50  (2.5%)
Resolver:     $2.00  (2%)
Guild:        $3.00  (3%)

Example: iTake Delivery (MetaDAO + SubDAO)

For a $100 USDC delivery mission with full hierarchy:

Performer:    $90.00 (90%)
Protocol:     $2.50  (2.5%)
Labs:         $2.50  (2.5%)
Resolver:     $2.00  (2%)
iTake (Meta): $1.00  (1%)
Restaurant:   $2.00  (2%)

Total Fees:   $10.00 (10%)

Guild Fee Tiers

Guilds can configure different fee rates based on mission characteristics:

Tier	Fee Range	Use Case
Basic	1-2%	Simple tasks, quick turnaround
Standard	3-5%	Regular missions, moderate effort
Premium	5-8%	Complex tasks, specialized skills
Elite	8-10%+	High-value, verified performers only

Guilds define these tiers in their DAO governance and apply them when curating missions to their board.

DDR (Dynamic Dispute Reserve)

The DDR is a 5% deposit required when raising a dispute.

Purpose

• Creates "skin in the game" for dispute parties
• Discourages frivolous disputes
• Funds resolver compensation

Mechanism

1. Party raises dispute → Deposits 5% of reward
2. Other party responds → Also deposits 5%
3. Resolution reached → Winner receives DDR back
4. Fees deducted → Resolver (20%), Protocol (10%)

Example ($100 mission)

DDR per party:           $5.00
Total DDR pool:          $10.00

After resolution:
Resolver fee (20%):      $2.00
Protocol fee (10%):      $1.00
Winner receives:         $7.00

LPP (Loser-Pays Penalty)

An additional 2% penalty on the losing party.

Purpose

• Further discourages bad-faith disputes
• Compensates winner for time/stress
• Supplements resolver incentives

Example ($100 mission, Performer wins)

Poster loses:
- Loses DDR deposit:     $5.00
- LPP penalty:           $2.00
- Original reward:       $0.00 (goes to performer)

Performer wins:
- Receives reward:       $100.00
- Receives DDR:          $7.00 (after fees)
- Receives LPP:          $2.00

Total performer payout:  $109.00

Dispute Outcomes

Poster Wins

• Performer failed to complete task
• Full reward returned to poster
• Performer loses DDR + pays LPP

Performer Wins

• Poster wrongly rejected completion
• Performer receives full reward
• Poster loses DDR + pays LPP

Split Decision

• Partial fault on both sides
• Reward split according to fault %
• DDR returned proportionally (minus fees)
• No LPP applied

Cancelled

• Dispute withdrawn or voided
• DDR returned to both (minus fees)
• Original reward returned to poster

Future Token Economics

Token-based governance and staking mechanisms may be introduced in future protocol versions. Current governance is based on protocol participation and reputation.

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XP Economy

XP Sources

Action	XP Reward
Complete mission	10-50 XP
First mission	+25 bonus
Perfect rating (5/5)	+10 bonus
Mission streak (5+)	+15% multiplier
Guild board completion	+10% bonus
Curation success	+20 XP
Dispute won	+100 XP
Dispute lost	-50 XP

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Level Progression (25 Levels)

Horizon uses a 25-level progression system optimized for engagement:

Onboarding (Levels 1-5)

Fast progression to hook new users (~8-10 missions to Level 5).

Level	Title	XP Required	Perks
1	Newcomer	0	Basic access
2	Rookie	75	Mission posting
3	Starter	200	-
4	Apprentice	375	-
5	Explorer	625	Guild joining

Early Game (Levels 6-10)

Building momentum and unlocking key features.

Level	Title	XP Required	Perks
6	Scout	925	-
7	Tracker	1,325	-
8	Pathfinder	1,825	Premium missions
9	Ranger	2,475	-
10	Adventurer	3,275	Guild creation

Mid Game (Levels 11-15)

Core engagement with governance unlocks.

Level	Title	XP Required	Perks
11	Voyager	4,275	-
12	Wayfarer	5,525	-
13	Navigator	7,025	Curator eligible
14	Trailblazer	8,825	-
15	Pioneer	11,000	Resolver eligible

Late Game (Levels 16-20)

Dedicated users with governance power.

Level	Title	XP Required	Perks
16	Captain	13,575	-
17	Commander	16,650	-
18	Elite	20,325	Governance voting
19	Master	24,725	-
20	Champion	30,000	Protocol proposals

Prestige (Levels 21-25)

Top-tier users with full access.

Level	Title	XP Required	Perks
21	Hero	36,300	-
22	Guardian	43,850	-
23	Sentinel	52,850	-
24	Titan	63,525	-
25	Legend	76,200	All perks unlocked

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Feature Unlocks

Feature	Level Required
Mission Posting	2
Guild Joining	5
Premium Missions	8
Guild Creation	10
Curator Eligible	13
Resolver Eligible	15
Governance Voting	18
Protocol Proposals	20

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Treasury Management

Protocol Treasury

Receives 2.5% of all mission completions.

Allocation:

• 50% Development
• 30% Security audits
• 20% Reserve

Guild Treasuries

Managed by guild governance.

Common uses:

• Member bonuses
• Marketing
• Equipment/tools
• Events