Incentive Tokens

When a user buys a chip, the company, using its special fund of tokens, transfers several tokens to the user for trust management. Let’s call these tokens: “incentive”. But this is the same main token of the entire project. The difference is that the user cannot pick them up or somehow manage them. Incentive tokens allow the chip to mine and validate blocks on behalf of the user if the user has not purchased any other tokens. This is similar to staking and is a measure of authority in the blockchain when generating new blocks. To the incentive tokens, the user can add his own tokens (in temporary staking), which he will earn during the life of the project or buy. Of course, your tokens are completely in the power of the user; they can always be completely withdrawn, sold, or transferred. In total, the chip always has some kind of fireproof balance of incentive tokens, which it can dispose of only for validating blocks, plus on top of it a certain number of the user’s own tokens. Therefore, even if the user has withdrawn all the tokens from his wallet and transferred/sold them somewhere, his chip will still work due to the incentive tokens.

In addition to our company, which allocates tokens for each new chip, any other organization on the blockchain can do this in the future to increase the value of the chips. At the same time, another company may build its policy differently regarding such incentive tokens. Let's consider several options.

  • Another company gifts each new chip with incentive tokens and may allow the user to take back such gifted tokens at some point. For example, if the chip performs some useful amount of work in the blockchain. After which you can issue all tokens at once or in stages.

  • Or vice versa, the company can only give them out for a few days as a demo and then take them back for itself. But these few days, temporarily borrowed incentive tokens will be able to increase the authority of the user's chip at the time of signing blocks.

  • Any other mechanisms are possible. For example, a daily gift to each chip of stimulating tokens for the amount of staking of the user’s tokens. The more the user invests tokens, the more such a company will stimulate this.

In all cases, it is the company that donates the incentive tokens that dictates the policy and is their full owner. But they work in the interests of the user's chip.

Our project allows any other companies to organize such a policy. It is completely safe, decentralized, and does not infringe on the user in any way. Initially, only our company acts as the initiator. This step will allow users to completely withdraw any tokens from their account, but without destroying the value of its chip.

Technically, this is organized by the fact that the initiator of incentive tokens creates his own smart contract. The token fund is transferred to the smart contract account. The smart contract manages all the policies embedded there (see examples above). When a new chip is created, a smart contract within the wallet's own ledger notes how many incentive tokens are transferred. Tokens are not transferred to the user's wallet. But from this moment on, the user’s chip receives limited rights to dispose of them. As soon as the user’s chip starts working to generate a new block, the chip uses staking of these tokens. The user's chip will not be able to take them for itself or dispose of them in any other way. However, if the chip is involved in malicious activities such as slashing, the user will be fined a certain amount of incentive tokens. Because all tokens belong to the owner of the smart contract, and not to the user, the smart contract will simply take back some of the tokens. At the same time, the smart contact cannot dispose of the user’s personal tokens in any way. The amount of the fine is the policy of the smart contract owner.

Types of situations that entail a fine:

  • the chip declared itself a validator, but missed its participation in maintaining the network consensus

  • the chip tries to add the same block to the blockchain twice (in order to reduce its computing resources and receive a “free” reward for a new block)

  • the chip creates conflicting blocks

  • the chip votes for conflicting blocks

  • the chip votes twice for one block

On the other hand, if it is included in the smart contract, each chip can be rewarded for validating a block. There is no reward built into the mechanism of our smart contract, because the blockchain already does this. It would be a parallel tool. Other companies that place their smart contracts can fine/reward for any actions. This refers to actions to maintain consensus in the network in accordance with the policies of such a company.

This chapter describes only the hypothetical possibility of destructive actions of chips, which will result in fines. In practice, of course, all chips are equipped with a verified version of the code. Access to chips is maximally protected from hackers and hacking. Perhaps not hacker problems. For example, if the chip rebooted due to a power failure and quickly generated a new block that competes with its own previous candidate (this is also a purely hypothetical problem, the chips have backup power and correct initialization at startup). But following the blockchain ideology, no one should trust anyone. Therefore, destructive activities will be financially unprofitable.

The basic amount of the first fine is 3.226% of the amount of the initial volume of incentive tokens gifted to the user. The second and all subsequent fines are doubled each time. After the 6th violation, the chip will completely lose incentive tokens. The parameters (formula) of the fine can be changed by the owner of the smart contract.

In contrast to fines, any chip can publish evidence of other chips' wrongdoings on the blockchain. For this, a reward will be assigned from the token fund in the smart contract account. The reward goes to the chip that first reported the violation, and to the chip that managed to add the violation message to a new block of the blockchain.

Let's summarize. Even a blank new chip that a user has just purchased immediately gains a small base authority to become a full-fledged validator. The initiators of maintaining authority can be any company, not just ours. This mechanism works in parallel to the mechanism built into the blockchain, which also monitors the honesty of all participants.

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