Tokens & Mining Philosophy

in #speaklast month (edited)

TOKENS

Goals with mining:

  • No geographic restrictions
  • No patents (open and fair access to all)
  • Contribute valuable resources to the network (not wasteful)
  • Anyone, regardless of background, can participate on any scale.
  • The more that participate in mining, the more decentralized it gets.
  • Punish attackers while rewarding the honest network participants simultaneously.

Now that the Hive Video IPFS Desktop dApp is out and we finish the last touches on it, the main focus now switched to the Speak Incentive Layer.

3speak  Copy.jpg

We wanted to start putting my thoughts out there for feedback, as this will be a community effort.

Why a 3 Token System?

We didn't combine the governance token with the resource token because of a few reasons. When you combine a gas/RC token with a governance token, it needs to have inflation. You can't (or rather very difficult/inefficient) have a capped gas token, as you don't want the value to skyrocket, and you want it widely spread so users can use the platform.

We want to know exactly how much of the network governance we own without ever being diluted. So we separated the gas token from the governance token.

Hive got it right when resource credits, it is "free" to use the network, or at least it feels free because you got the RCs for free by staking your HIVE. We wanted the uploads to feel free, so BROCA is in the spirit of RCs. I think BROCA can be fungible; as RCs deal in text, BROCA deals in images and videos, which deal in more data; therefore, BROCA can be fungible and used to pay miners. If anything, we want BROCA to be a low, stable price.

The reason for Miner tokens is a few things. LARYNX miners will be open and equal to all who wish to buy them. Unlike with PoW mining, for instance, ASIC's, a company can create a revolunatry chip, patent it, and refuse to sell it to you. Specialized, patented miners create a centralized mining environment. Having digital miners sold in a decentralized way prevents this attack vector.

Having digital miners gets away from the electricity centralization. Cheap electricity for some, expensive for others makes unfair mining experiment where people are at a disadvantage based on where they live, or governments can subsidize cheap electricity. Hard drive space is the most commonly used, cheapest to acquire within no way can be specialized and patented and cornering the market the same way Asics can.

LARYNX Miner is mining SPEAK, a capped governance token. Without the MINER token, anyone can mine the network; this leaves it vulnerable to a money attack—someone coming in with mass resources and trying to nearly 51% attack the network.

With Bitcoin, you need to buy hardware, so there is a cost to attacking the network, as you purchase Asics in bulk to mine crypto. The SPEAK miners have a fixed investment in LARYNX Miners; the only thing you can do with these miners is to provide resources to the SPEAK network. You can't repurpose the miners for anything else.

Once you made that investment in LARYNX Miners, you're going to stake those miners and keep providing resources to the network as long as it is monetarily beneficial. Even then, people might still mine since you already sunk the money in the miners and hard drive space and bandwidth are so readily available. So the setup is amazing because the LARYNX miners are providing resources to the network, and they have an incentive to keep mining whether the price goes up or the price goes down.

However, the Speak Network deals with harddrive and bandwidth, two things readily available on web 2 used by various other things. Meaning, a centralized Youtube, for example, can point their exact resources at the network without having to "buy-in" - the Miner Tokens prevent this type of money attack to a large extent.

That is why distribution is essential. To try and 51% attack the network to gain an edge on gaining governance tokens, you'll also need to buy a ton of LARYNX miner tokens, which enriches the Hive community and will not be an easy thing to do, as the more you buy, the higher the price goes. So it is a defense on the governance.

Having Miner Tokens only be purchased by the asset it mines creates a continuous demand for SIP purchases, thereby creates an ever-growing fund backing the project. This is the definition of a value feedback loop.

Give out free miners to mine Speak. When you stake a Miner token, they can never be unstaked, essentially burned, but you retain your mining power on that account for life.

Every year a better miner comes out that can only be purchased with Speak. Speak is capped. Every purchase, therefore, makes Speak more scarce—supply & demand. More demand for a deflationary asset like Speak increases demand to mine it, which means people need to buy more Speak to mine Speak. Increased demand for miners raises miner token prices. Rising miner prices mean miners sell Speak for higher prices (in a healthy environment) - by design; when there is demand, the network fully captures and harnesses to the fullest extent. Things like this are not possible on one token system.

Giving free miners to Hive holders offers a fair token distribution, and SPEAK only reaches the open market if it has been minded by providing resources to the network. Every SPEAK in circulation only exists because it improved the network's infrastructure, which is very cool when you think about it. We believe Hive is one of the fairest, broadly & diversely distributed assets on earth.

The power of tokenmics; the miner purchases create a bullish sink for all of Hive. Future LARYNX Miners will suck up a lot of SPEAK/HIVE/BROCA. A game theory in tokenomics that ensures the governance token remains scarce is capped and continually locked up while also helping add value to the Hive community.

Multiple token systems will be a thing. People will get used to them, and communities that build them right will do amazing things. You can't lump everything into one token. Hive has RC's, a separate token (virtually), except you can't trade them.

Having a capped governance token alongside an inflationary gas token allows the governance token to grow in value as the network grows while allowing users as close to a "free" feel as possible using the gas token.

Creating multiple tokens with smart parameters can create a token system that drives scarcity while spontaneously adding security while not affecting user experience.

In theory, the idea is with a high SPEAK token price, the more Hive can be taken and locked from the market forever. Eventually, when there is demand, Speak is scarce, and there is an ever-increasing demand for miner tokens, the SIP will be overflowing and can even help fund HIVE witnesses.

Think of a scenario where there is 100's of millions of USD value (common for DEFI today) equivalent locked in tokens in the SIP generated 5-10% interest a year. Potentially millions in funding dished out for infrastructure cost. The community can vote to take SIP funds to fund the Hive witnesses, thus lowering or even capping Hive's inflation altogether.

The SIP idea is not just to SPEAK, but for HIVE, and if the game theory plays out correctly, the fees generated from the SIP could pay for Hives infrastructure in a non-inflation way.

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Giving free miners to Hive holders offers a fair token distribution, and SPEAK only reaches the open market if it has been minded by providing resources to the network. Every SPEAK in circulation only exists because it improved the network's infrastructure, which is very cool when you think about it. We believe Hive is one of the fairest, broadly & diversely distributed assets on earth.

So there are 2 tokens SPEAK and a token that we get by mining aka providing resources to the network ?

Giving free miners to Hive holders offers a fair token distribution,

This means the mining-token will be airdropped to HIVE holders and they will be the primary participants in the mining ?

Queries:

  1. There has to be a decentralized, trustless mechanism which tracks the mining efforts and incentivizes the miners based on a distributed, decentralized, trustless consensus. This will ensure that not just the video/image hosting but the rewards also are immutable and free-as-in-freedom. How do we plan to achieve the same ?

  2. Have you thought about bringing NFTs to the mix ? The NFTs of today are not actually unique apart from their ids. The images representing the NFTs gets replaced by another one or the host goes down all the time resulting in the NFTs becoming a joke. Standards like ERC-721 has no mechanism to ensure neither uniqueness of NFTs or the immutability of the graphical assets which is used to represent assets. Providing immutable storage on the IPFS and then incentivizing could be a cool thing. Not even WAX can do this now.

  3. We will need a DEX or an exchange which can support trading, AMM, perphaps ability to talk to other chains .. just somethoughts

We've talked since you posted this, but I'll like to answer these questions anyway for anyone else who might have them.

Actually 3 tokens, A miner token, a governance token & a gas token.

Yes, we are doing a claim drop to HIVE hodlers; we will give at least a 3-month heads up before the claimed drop starts to give everyone an equal chance to get HIVE if they wish to become early miners.

We will ensure a decentralized, trustless mechanism via Proof of Access. We will go into great detail in the white paper soon to be released.
Yes, images have already been added. The next step is to allow people to tokenize and make into NFTs.
DEX + AMM is the backbone of how the SIP will operate. We will need a fully autonomous one that acts like a uniswap that can then pool fees generated from providing liquidity to miners.

Thanks @theycallmedan

A table explaining the 3 type of tokens and their functionality can be good. Let me try to note down few points that I have understood. (I may be wrong ... )

Actually 3 tokens, A miner token, a governance token & a gas token.

LARYNX : Airdropped to HIVE holders which will be permanently vested enabling mining. (stake and mine)

SPEAK : Initial Distribution = 0, SPEAK gets minted based on the mining performed by IPFS hosts who hold vested LARYNX. Rate of minting of a given miner will proportional to staked LARYNX.

BROCA: Every user on the network will earn (?) BROCA and use the same to perform various operations like upload videos or images. Network bandwidth and disc storage space both will be measured and allotted in terms of BROCA ?

Proof of Access : In this, what are the metrics ? Say, network bandwidth, storage space, latency etc could be measured.

How to measure node/host/SIP-node performance ?

To incentivize the miners we will have to measure and send the predefined performance metrics to the blockchain via trustless oracle mechanism. Each node can be an agent which sends instrumentation data to be received on the blockchain validator nodes. A decentralized mechanism on the chain can use this data to emit SPEAK proportional to the staked LARNYX. Daily cap will be allotted on the amount of SPEAK to ensure no attacks on the network.

A quick question for someone not that techie: What is exactly a claim drop? Like a webpage where we will be able to send/burn hives and get those Larynx?
Thx and congratulations on the idea and display. After some years really dark for free speech and freedom in general, 2021 can be definitely an inflection point.

No don't burn Hive . Stake Hive. You will receive the tokens for the amount of Hive staked if I am not wrong.

The tokenomics are really clever... I have a few questions.

BROCA can be fungible and used to pay miners. If anything, we want BROCA to be a low, stable price.

LARYNX Miner is mining SPEAK, a capped governance token

One thing I still don't understand perfectly is how miners will get paid. People stake SPEAK and earn BROCA. They then use BROCA to pay the miners. But miners earn SPEAK for mining, so now I'm confused. Does that mean BROCA is burned, and not paid to miners? Also, the first quote implies that BROCA is tradeable, but RCs are not tradeable on hive. They can only be consumed for network usage.

Great question. Broca is a instant payment to the first miner that puts CIDs (video hashes) into the network for others to download. This is called proof of access mining. So there is an incentive to be first because you'll get that Broca reward. The rest of the miners, the ones downloading the videos and have the recall block will be eligible to mine Speak.

Amazing tokenomics. I gotta read it 2-3 times to understand better. Great Stuff @threespeak team is doing. Well done Dan. :)

I love the Solution-to-any-problem approach of this concept and those behind it. I know I'd happily participate once I can fully grasp (ha, look at a this pun, not intended) it.

I like the idea of multiple tokens. It makes it also easier for Investors to step in without doing the "daily" platform work basics. It is smart and I think it will play out with the time very well.

When starts the claimdrop?

Before reading this article, I thought I had a little knowledge of tokens, mining, etc.

Now, I realized that I did not understand anything ...

Most of all, it is not clear what the LARYNX token will be (on a separate blockchain, like a smart contract on the Hive-Engine exchange, or some third option)?

And where can you buy LARYNX?

All of it aside from the IPFS for storing videos/images will be built on Hive.

We are receiving rewards by locking Hive. It is a good process of mining crypto.
Your Philosophy is Admirable,

So how and when would that happen. I know this is just a hint that it's coming soon

In theory, the idea is with a high SPEAK token price, the more Hive can be taken and locked from the market forever.

Seems we are not far from moon then.

for instance, ASIC's, a company can create a revolunatry chip, patent it, and refuse to sell it to you

Big companies are even working on fast FPGAs these days for the mining - and for transaction processing too.

Strangest thing. This post is not showing in either Trending or Hot on Hive.blog. Nor does it show up on my personal feed, and I follow you.

Came across it thanks to @taskmaster4450's post: https://hive.blog/hive-167922/@taskmaster4450/3speak-an-incredible-sink-for-hive

I am excited and looking forward to having it soon. There is a lot to come on Hive this year and it will bring more value to hive ecosystem.