Dear Community,
we would like to further explain some details about Proof of Trust/Pawn, a locking mechanism, that is one of the core attributes of future CreditBit token.
Two modes of tokens Each wallet (more precisely: each public address) will have two balances. Both balances belong only to this public address.
First balance is representing transferable tokens, similar like at other currencies. Second balance is representing “locked” tokens, that are not transferable. Balance is the sum of several batches of tokens, each locked for a different period of time. After the expiry of a locking period, each batch of previously locked tokens is moved to first, transferable balance.
“Lock” on the batch of tokens is an item by itself. It can be created only by trustworthy entities, that in practice represent distribution mechanisms or CreditBit DAO organization and with a prior consent of tokens owner. If and when an owner of tokens voluntary enters a distribution or voting mechanism with predefined batch of tokens, he lock them for a predefined period of time. In other words: if an owner of tokens wants new tokens or wants to vote, he/she has to lock a certain amount of his tokens and thus show his trust in the Community. Locked tokens are not lost, only their transferability is restricted for a certain time period.
Trust with locking?Several good currencies with brilliant ideas were destroyed due to market manipulations. Our community tends to support responsible behaviour, based on mutual trust. Long position on tokens bares some level of risk. With locking your tokens for months or even for a week you show your respect and trust into the community.
Bounties for developers and promoters will be payed out in locked tokens. Locking period will prevent instant dump on the market, helping currency to reach stability and proper value. We would like to spread risk/trust among all participants in our community.
Same principle will be in effect for voting in CreditBit DAO. In order to participate in DAO voting, owners will have to lock certain amount of tokens. Votes will be pounded with the amount of locked tokens, therefore linearly dependent on the trust.
Transferable LockAn owner will have an ability to transfer a right to unlock (ownership of a “lock”) a certain amount of locked tokens to other entity. Lock itself is thus a transferable entity, but the transfer does not affect the current ownership or transferability of locked tokens. This only means, that after the expiry of the locking period, an entity, that became a new owner of a lock, will have the right to unlock and transfer this tokens simultaneously to an address of choice.
Degree of TrustDegree of Trust is the ratio between sum of all locking tokens periods and all existing tokens. More locked tokens for longer periods, higher Degree of Trust. A constant or at least slowly changing Degree is a desirable state, that we tend to achieve.
DoT = SUM(NL
i*LT
i) / N
DoT … Degree of Trust
NL
i … amount of locked tokens in a batch
LT
i … remaining locking period for this batch
N … all tokens in existence
The distribution and other mechanisms will take into consideration an amount of currently locked tokens. Quantitative easing with distributing either free or locked tokens will counteract falling currency supply and prevent induced deflation.
Hope you enjoyed reading...
...and... happy Valentines day
P.S.: We promised on Slack to post about "Video script" task. The task is prepared, but it was not seen and approved by all dev-team members yet. Expect it on Thursdays post.
