Moonbeam’s first major rollout is planned for the Polkadot ecosystem, using an associated token named Glimmer (GLMR). Since the Moonbeam network is still being built, details here may be updated ahead of the network’s public launch.

Glimmer Token Utility

Moonbeam is a decentralized smart contract platform, and it relies on the Glimmer token to operate. GLMR sits at the core of Moonbeam’s architecture and cannot be stripped out without losing key functionality. The Glimmer token is used on Moonbeam for:

Inflation and Fee Model

Moonbeam aims for a 5% yearly inflation rate, resulting in an uncapped token supply.

This inflation is intended to fund the network’s continuing security requirements. Key parts of the security budget include ongoing payment for a parachain slot and incentives for collators to provide collation (block production) services that help sustain the Moonbeam network. Of the 5% inflation, 1% is used to encourage collators and 1.5% is allocated to the parachain bond reserve, which accumulates funds on-chain to support a parachain slot indefinitely. The remaining 2.5% is distributed to users who stake their GLMR tokens and contribute to the collator selection process.

Moonbeam handles fees tied to transactions and smart contract execution in two parts. 80% of the fees paid are burned, creating a deflationary effect and increasing value for current GLMR holders as network usage rises. The other 20% is directed to the on-chain treasury, where on-chain governance can allocate it to initiatives and projects that drive additional adoption and engagement with the network.