It has been three years since we started to build the ILK token ecosystem, which has become a major tool and supporter of the INLOCK platform and the tens of thousands of customers who benefit from our token on a daily basis.

At the beginning of 2020, we decided to leave the previous fee/toll-based token model behind and switch to a membership model, where clients can benefit directly from holding ILK token. For this model, however, we have chosen a rather unorthodox solution. Unlike other similar platform solutions, we do not require our clients to buy ILK tokens continuously in order to benefit. They only need to purchase the necessary amount of ILK tokens once.

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Thanks to this model, our clients can be sure that once they have the required amount of tokens (25k, 100k or 1 million), they will receive the benefits (e.g. interest bonuses) under any circumstances, no matter what new direction the crypto market takes. This is definitely a major advantage of the model compared to other similar platforms, where customers can always opt-out of higher interest bonus levels if, for example, the value of their Bitcoin or other cryptocurrencies unexpectedly increases significantly.

Limited amount = VIP membership?

Since there is only a finite number of ILK tokens, there is obviously a finite number of customers who can have the ILK tokens needed to obtain each level. Almost 20% of the total 4.4 billion ILK tokens tied up as a membership bonus or an asset of the members of the INLOCK Prime program.

This resulted scarcity in the market has clearly led to an increase in token supply prices over the past year. The point is that in one year the token price has increased by almost 1000% and this rate of increase is likely to continue in line with the popularity of the platform.

As the token’s exchange rate increases, the amount needed becomes increasingly unavailable to a newly connected customer. A year ago, $50 was enough to buy the minimum amount of tokens needed to reach the minimum level (25,000 ILK), which gives a 5% higher interest rate on the interest stored in the Savings Account. Today, the same amount costs $250, which logically means that it is only worth investing in tokens if you either have a very long-term plan with INLOCK or if you have a larger quantity of assets stored in INLOCK that will give you a significantly higher annual return on the 5% extra interest than the 25,000 ILK tokens cost you.

What does 5% (12% or 20%) extra interest mean? We often get this question. It is important to note that we are talking about a percentage increase and not a percentage point. So if, for example, the base rate is 5% and the customer gets 25k ILK, his interest rate will obviously not increase to 10% (that would be the percentage point) but to 5.25% (5*1.05=5.25)

The logical consequence of the increase in the token price is that fewer and fewer people will be able to access each bonus level. This would in turn create an unjustified sense of VIP membership, which would not necessarily benefit the ILK ecosystem in the longer term. To resolve this ambivalence, we are introducing the Badges system.

New ILK token benefits!

Before we go into the details of the Badges system, let’s look at the additional benefits of holding ILK tokens over the next year:

Lower loan interest rates!

Similar to the principle already used in the current Savings Account, ILK holders can expect reduced interest rates when borrowing. In practice, this means that interest rates will be reduced by 5% for ILK 25,000, 12% for ILK 100,000 and 20% for ILK 1 million.

It is important to note that we are also talking about percentage reductions and not percentage points. So if the advertised interest rate is 10% per annum, you will only pay 9.5% interest on a loan in case of having 25,000 ILK, and 8% interest in case of 1 million ILK!

An important restriction is that the interest rate discount applied to the loan is only applicable on days when the client has the given amount of ILK token for the whole day. So, if a client takes out a loan of 1000 USDC at 10% interest for 30 days (while holding 0 ILK), then on the 10th day of the loan term, they buy 100,000 ILK and hold it until the end of the term, they will pay the 10% interest pro-rata for the first 10 days, but after that, they will only pay the interest reduced by 12% (~8.92%)

Taking over the network costs

Currently, the platform takes over the payment of network costs from clients only in certain cases (which occurs at the time of withdrawal). By holding ILK token, clients will be able to use this in a more dynamic way in the future. Depending on the amount of ILK held (25k, 100k and 1M), clients will receive a certain amount of free withdrawal each month, which will be valid for all supported crypto assets on any supported network.

Loan insurance

One of INLOCK’s most dynamic and popular products is undoubtedly the loan function, which has almost endless use cases. Some use it for tax optimization, many use it for speculative purposes and today many houses are built with INLOCK loan financing, where the INLOCK loan typically provides the down payment needed to obtain a more favorable bank loan.

However, the loan feature also carries a number of risks, as our clients must guarantee that the value of the collateral pledged for the loan will exceed the current debt in all circumstances. Yet in the highly volatile crypto markets, this is not always an easy task and our clients are constantly aware that they need to make sure their assets are over-insured.

To ease the situation, we will soon be launching our complimentary insurance product, INLOCK SHIELD. The product will help reduce risks in three ways:

  • If a client fails to repay his loan in time but has SHIELD insurance, the system will automatically make the final repayment from the client’s free USDC reserve, if it is available in their Savings Account before the contract is forced to close and collateral is sold.
  • If an under-collateralization situation would occur, extra collateral will be automatically added for clients with INLOCK SHIELD at 80% LTV level, if the client has free reserves in their Savings Account from the relevant collateral asset.
  • If an under-collateralization situation would occur, but the client does not (already) have sufficient collateral in his Savings Account, but has INLOCK SHIELD insurance, the system will attempt to partially prepay the contract from the client’s free USDC reserve, thereby ensuring that the LTV level of the contract is reduced below 80%.

To conclude the INLOCK SHIELD insurance, the client must have an existing loan service. The service fee is 4% of the value of the collateral in ILK tokens. If there is no loss on the related loan contract, i.e. the SHIELD insurance is not used, the client will get back the amount of ILK required to take out the insurance after the loan has been repaid!


Currently, the INLOCK community is most excited about the development of the Badges, as this is the key to the long-term future of INLOCK and therefore the INLOCK token.

With the introduction of Badges, we are creating a whole new use case in the crypto ecosystem. Perhaps it is not so bold of us to say that this kind of utility can become at least as high-profile in a few years as the NFT mania is right now.

Essentially, through Badge, we will tokenize the benefits of the ILK token for a limited period of time, allowing our clients to enjoy these benefits without actually committing to the ILK token.


A total of three badges will be introduced, representing the three ILK token bonus levels:

  • Bronze badge: the customer will receive the benefits of holding 25k ILK for 30 days.
  • Silver badge: the customer will receive the benefits of holding 100k ILK for 30 days.
  • Gold badge: your customer will receive the benefits of holding 1M ILK for 30 days.

Two versions of the three badges (bronze, silver and gold) will be available: freely transferable and account-based. The former can be freely transferred to another INLOCK client, the latter can only be used by its owner.

Transferable badges can only be obtained by those who have ILK tokens. Depending on the ILK balance, the client will receive a certain number of bronze, silver and gold badges, which they can freely distribute among their friends, helping them to achieve higher bonuses for a limited period of time.

The number of badges clients receive depends on their ILK balance. For example, if they have 2 million ILK, they will receive 2 gold badges every month. If they have 500 thousand ILK, they will receive 5 silver badges. And if, for example, they have 1,280,000 ILK, they will receive 1 gold, 2 silver and 3 bronze badges every month. The distribution of badges is completely automatic, the client cannot choose any other method of distribution.

Due to the interest bonus given by the badge itself, we need to modify the current interest calculation of the Savings Account at several points:

  • First, a badge may be activated or deactivated during a given interest period. A typical example: a client’s silver badge expires on Saturday, and then they can receive another bronze badge on Monday. In this case, the 12.5% extra interest bonus is paid from Wednesday to Friday, then the basic interest rate is paid from Saturday to Sunday, but the interest bonus is 5% for Monday and Tuesday. – To handle this, not only the calculation of interest but also the accounting will be carried out on a daily basis. So, unlike the current indicative “conditional” interest calculation, the new system will actually calculate the interest every day and you will see exactly how much interest is calculated. For interest payments, we will continue to stick to weekly payments.
  • For interest payments, it will still be possible to request interest in ILK tokens, but the way to set this will change, as in the new system you will always be able to set the currency for the interest payment for the NEXT period.
  • An important advantage of the actual daily interest rate calculation is that we modify the method of calculating the Savings Account balance, which is often criticized – which is justifiable. Until now, you only received interest on amounts that were in the Savings Account for 24 hours. However, withdrawals from the Savings Account were always made from the oldest allocations. This was a wonderful approach from a software design point of view… but a disaster from a customer experience point of view, because it meant that if the customer had, let’s say 2000 USDC and then borrowed another 2000 USDC and then paid it out straight away… he actually paid out his previous 2000 USDC, which meant that neither for his existing 2000 USDC nor the 2000 USDC he borrowed as a new loan they would have received interest on that day. In the new interest calculation model, the lowest value of the balance is taken into account on that day, so the anomaly described above should not occur.

Badge Market!

ILK holders will also have the possibility to sell their generated badges. A Badge Market function will be developed for this purpose, which will essentially look like the model of the ILK token market. The price of gold, silver or bronze badge will be determined solely by market supply and demand.

On one hand, the Badge Market will provide ILK holders an additional use case for their ILK tokens, as it will allow them to earn a return on their ILK tokens in addition to the interest. On the other hand, the Badge Market can also provide a viable alternative for new clients who are new to the INLOCK platform, as they do not have to commit to buying large quantities of ILK tokens immediately to earn higher interest. This can be of particular benefit to those who would typically only use INLOCK for shorter periods of time when they are sitting in a crypto position.

Welcome Bonus

All new clients who register and complete their customer identification after registration will automatically receive 3 badges (1 of each type). These badges will be linked to the account, so they are not transferable, but new clients can enjoy the highest interest bonuses immediately after registration without having to buy ILK tokens, request badges from other clients, or purchase badges on the Badge Market.

Seasonal Bonuses

In case of various events or achievements, INLOCK will distribute badge rewards to clients or a certain group of clients. These badges will always be linked to the account, so they cannot be transferred, but can be used immediately by the account holder.

Long-term sustainability

For any finite resource, the following evolution can be observed: initially, there is an oversupply of the resource, then an equilibrium level develops, which later turns into a market shortage, which eventually leads to the resource becoming unprofitable.

This kind of tendency is also true for all cryptocurrencies and tokens that exist in finite supply. Different tools try to deal with this in different ways. A good example is the case of Bitcoin, where the first stage (there are too many) is essentially shortened by mining, and the middle stage (equilibrium) is maintained in the long run by reducing the number of new coins released every 4 years so that the growth in demand is controlled by a slowly shrinking fresh supply.

In case of the ILK token, the equilibrium level will clearly be maintained by the Badges system. The ILK token alone, because of its finite number, cannot serve the interests of the platform indefinitely. However, with the ILK + Badges system, the equilibrium can be maintained in the long term, even in the event of a significant (several orders of magnitude) increase in the number of clients.

A large part of the ILK token supply will be aggregated by token holders who will essentially use it for generating badges, that will be eventually sold on the Badge Market to future INLOCK clients.

Since Badges are used in a very specific way (they give a certain amount of interest bonuses for 30 days), the exchange rate of Badges can be completely different from the ILK token exchange rate.

Keeping the Badge ecosystem at a healthy level will be the responsibility of INLOCK Prime members, who will now also oversee the ILK token ecosystem in addition to the INLOCK platform. The main tool for this will be the fine-tuning of the parameters linked to badge issuance. They will be able to modify two parameters that affect the supply market:

  • How often a new badge should be created (base value is 30 days)
  • Exactly how many badges should be created for a given amount of ILK.

By fine-tuning this parameter, INLOCK Prime members can monitor the long-term sustainability of the INLOCK platform and they can make sure that all new clients should be able to use the platform on equal terms.

Why do we believe that this task is better left in the hands of INLOCK Prime members than if it remained in the hands of the team directly maintaining the INLOCK platform?

  • Members of the INLOCK Prime program are early buyers of ILK tokens who purchased tokens during the private sale and essentially contributed to the creation of INLOCK. Prime members currently hold nearly half a billion ILK tokens, which is ~10% of the ILK tokens in circulation. So it can be said that they have significant exposure to ILK tokens. (At current market value we are talking about close to three million dollars)
  • The INLOCK Prime program members directly benefit from the profits of the INLOCK platform after their work, so it is in their best interest to make the platform sustainable and profitable in the long term, the most important tool of achieving this is high customer satisfaction and, of course, new clients.

It is clear that, based on these two aspects, the members of the INLOCK Prime program are specifically interested in making the best decisions for our clients in the fine-tuning of the badge issuance.