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From $GOLDNUGGET to $BITBAR
(What the heck is that?)
It is a well-known issue that native tokens can be subject to a lot of inflation over time. While some yield farms have come up with max-supply solutions, this solution cannot pay out rewards once the max supply is reached. To tackle this limitation and the inflation of unlimited tokens, we provide both limited tokens and our unlimited native token ($GOLD NUGGETs), which give the users exclusive privileges (such as governance and using our game features).
Blockmine Tokens ($GOLD NUGGETs, $GOLDCOINS, $GOLDBAR, $BITBAR)
Playing lottery or other games is a nice way to burn native tokens, but we believe this hardly solves inflation in the long term unless more and more users enter overtime or more and more tokens are burned for nothing. It is obvious that the rarer a token, the higher its value gets. As a deflationary mechanism, the minting of these tokens is therefore also subject to burning native tokens. We have currently planned three limited utility tokens (the special use-cases of $GOLDBARs and $BITBARs will be revealed someday (SPOILER: they may be essential for the restricted chain routing protocol), but not in this paper, for $GOLDCOINs see below)
  • $GOLDCOIN Token (max supply: 1,000,000)
  • $GOLDBAR Token (max supply (100,000)
  • $BITBAR Token (max supply (10,000)
The burning ratio of $GOLDNUGGETs and the token minting is determined by math (we will get to that later). To access features on the platform (such as games), both $GOLDNUGGETs and one of the tokens above are needed (the ratio is determined by the smart gaming contract, thus, the value of $GOLDNUGGETs is always linked to the limited utility tokens). Why is that a deflationary factor? Well, first of all, deflation is achieved by burning $GOLDNUGGETs. Secondly, the limited tokens work as value storage, and since (it gets a โ€˜lil complicated..) the utility of $GOLDNUGGETs is linked to the utility tokens, the value of the $GOLD NUGGETs is linked to that limited token as well. Does that make sense? ๐Ÿค”
Initially, there will be a $GOLDNUGGETs pool that generates 0.046875 $GOLDCOINs / Block. As a further deflation mechanism, $GOLD NUGGETs are locked for 30 days before collecting the $GOLDCOIN token. We call such an operation refinement, and the contract is the so-called Refinement Master (๐Ÿ‘‰ link to the contract will be added once deployed), who is the owner of the refined tokens. Thus, no one else can ever mint any of these tokens, and the contract itself ensures that the max supply is never exceeded by math. Some readers may think: โ€œWhy the heck have they come up with such a weird number as 0.046875?โ€. Do you remember when you had a weird number as a solution for solving an equation and you thought it must be wrong? Well, this time, it is not and is indeed the mathematical solution of the refinement algorithm. The algorithm makes use of the geometric series to determine the correct conversion rate between $GOLD NUGGETs and $GOLDCOIN (the same applies to the other tokens as well). The geometric series states:
aโ‹…โˆ‘(nk=1)12kโ†’1โ‹…aa \cdot \sum \binom{n}{k=1} \frac {1}{2^{k}} \rightarrow 1 \cdot a
Geometric series that the refinement protocol relies on.
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This means, that the value converges to value a (i.e., never exceeds a), where a = 985,500, which defines the number of tokens that is minted within the refinement contract (14,500 are pre-generated to set the initial conversion of $GOLDNUGGET:$GOLDCOINs of 1:0.046875 at launch time) and k = 1 year, the halfing period of token minting. Following the above formula, the tokens minted per block (TPB) are:
TPB=985,0002โˆ—365โˆ—2800=0.046875TPB = \frac {985,000}{2*365*2800} = 0.046875
$GOLDCOIN minting / Block
As mentioned before, minting those tokens is not just for free but includes a burning mechanism. ๐Ÿ”ฅThus, to refine tokens, $GOLDNUGGETs must be burned in hell ๐Ÿ˜ˆ (or wherever $GOLDNUGGETs can be burned safely).
Therefore, for any amount of generated tokens b, the burned amount of used $GOLD NUGGETs n is:
nburn=2kโˆ’1โ‹…bmaxsupplyโˆ—nn_{burn} = \frac {2^{k-1} \cdot b} {max_{supply}} * n
$GOLDNUGGETs are burned when refined into $GOLDCOINs. The formula determines the burning amount based on gained gold bars in relation to the max supply.
This basically means that
1) every year a vast amount of used $GOLD NUGGETs is burned in the refinement process (max. 50%) and
2) the burn-ratio of $GOLD NUGGET:$GOLDCOIN doubles every year, which makes the gold coin minting even more valuable over time since the minted amount of $GOLDCOINs per year is halved every year (it will take approximately seven years to collect 99% of all $GOLDCOINs, while for the last 1%, >eight times as many $Nuggets must be burned to get one single $GOLDCOIN compared to year one). The conversion rate determines the value of the $GOLDCOIN, i.e.,
Value of $GOLDCOIN and $GOLDNUGGETs as per minting ratio.
You may notice one crazy thing: Although the price of a $GOLDCOIN is 21.33 $GOLDNUGGETs at app launch, only a fraction of the $GOLDNUGGETs are actually burned, making it a huge incentive to stake $GOLDNUGGETs in order to get gold coins (also you need them to be able to play our gamesโ€ฆ no $GOLDCOINs, no games). The actual burned amount is not fixed, but determined by the staked nuggets within the refinement contract, i.e., in theory (just to give a clearer understanding), if one single person staked 1 $GOLDNUGGET for 1 year without anyone else staking, they would get 492,750 $GOLDCOINs for just 0.5$Nuggets (too good to be true?, yeah kind of, since obviously, a lot more people will stake $GOLDNUGGETs). The overall burned amount of nuggets per coin type can be tracked in the refinement protocol. The launch time of the tokens is as follows:
  • $GOLDCOIN: APP LAUNCH
  • $GOLDBAR: ~ after 90d
  • $BITBAR: ~ after 180d
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