Token Utilities

The RDO token is a foundational asset in the Reddio ecosystem, designed to drive sustainable utility across its high-performance Layer 2 network. The token’s utility extends beyond simple transfers, forming the backbone of operational, economic, and governance mechanisms. Below is a detailed breakdown of each core utility, structured to highlight its role in supporting the protocol’s long-term value.

Transaction Fees

Purpose: Gas fees for network operations
Participants: All users

The RDO token is used as gas for executing transactions on the Reddio network. Every contract call, token transfer, or application interaction requires RDO, making it the default medium for paying transaction costs. This demand-driven utility scales with network activity. As Reddio supports high-frequency use cases such as DeFi, gaming, and on-chain AI, the recurring need for gas fees ensures continual baseline demand for RDO.

Key characteristics:

• Charged on every transaction within the Layer 2 network
• Scaled based on computational resources used
• A percentage of the fees is allocated to staking rewards and burned, reducing overall supply

Stake to Earn

Purpose: Passive rewards for ecosystem participants
Participants: Token holders

RDO holders can stake their tokens to earn a portion of the network’s revenue. Staking contributes to network decentralization and liquidity, and plays a key role in increasing Reddio’s Total Value Locked (TVL), a key metric for ecosystem credibility.

Key incentives:

• Access to reward pools funded by protocol fees
• Helps boost key metrics such as TVL and retention

Stake to Validate

Purpose: Validator participation in Proof-of-Authority consensus
Participants: GPU miners, node operators

Validators must stake RDO to qualify for block production and sequencing. This aligns validator incentives with network integrity. Reddio’s PoA framework uses identity-bound validators to maximize efficiency while retaining decentralization at the node and compute levels.

Staking RDO for validation:

• Provides access to mining rewards
• Ensures economic alignment and reputation-based trust
• Allows validators to contribute GPU compute power to the network

Burn Mechanism

Purpose: Deflationary tokenomics
Participants: Entire ecosystem

Up to 20% of each transaction fee is permanently burned, reducing the token’s circulating supply. This mechanism adds deflationary pressure and enhances long-term value.

Burn features:

• Automatic burn of a portion of gas fees
• Tokens sent to an unrecoverable address
• Publicly verifiable on-chain

Governance

Purpose: Community-driven decision-making Participants: RDO holders

RDO holders gain governance rights that enable them to influence key protocol developments. This includes upgrades to the core network, modifications to consensus parameters, and enhancements to the Modular Sequencer SDK.

Voting rights include:

• Protocol upgrade proposals
• Validator onboarding criteria
• Sequencer module configuration

This governance utility promotes decentralization and transparency while empowering token holders to steer the network's evolution.