In addition to announcing a hard fork for additional stability of our coin, we would also like to announce the development of a sidechain to augment the Karma ecosystem.
This will be the first working sidechain in the world of cryptocurrency.*
This sidechain, dubbed "Karmx" for now, will be a PoW/PoS/Po* hybrid that is merge-mined with Karma to provide additional security to the Karma blockchain. It will allow us to introduce some new features and add value to the Karma blockchain.
Supporting Karma by Merged MiningBy merge-mining with Karma, miners are rewarded for securing the Karma blockchain with both Karma rewards
and KARMx rewards during the PoW period (and possibly beyond). No new Karma coins needs to be created. (In fact, this could help reduce the overall number of coins.)
Variable PoS InterestWe feel that introducing
variable PoS interest instead of hard-coded, static interest mirrors the real economy and allows the Karmx economy more flexibility to react to the health of the Karma blockchain. In this way we are mirroring the benefits of a centralized system (such as a central bank) in a decentralized way (determined by distributed mining activity and of course the algorithm). For example, if there is a period where the Karma net hash rate drops significantly the Karmx sidechain would react by increasing the interest rate.
A Gold PegAdditionally, Karmx will be a mathematically-controlled 1-way peg that introduces pricing stability into the Karma ecosystem during its PoW period. Karma will be sent to the sidechain, exchanged for Karmx at a rate commensurate with the price of gold (or a composite or equity with greater stability, such as the DJIA; open for debate)
ExampleDay 1 - 5,000 Karma = 1 Karmx (baseline of gold is $1,000)
Day 10 - 4,750 Karma = 1 Karmx (gold has decreased 5% from base)
Day 40 - 5,750 Karma = 1 Karmx (gold has increased 15% from base)
In this way, there is support for the price of Karmx as investors either A) buy KARMx with BTC if the exchange rate is lower; or B) buy KARMx with Karma is the exchange rate is higher. It could also provide additional support to Karma.
The price of Karmx can rise significantly higher than the peg as users buy the currency outright, of course, but the peg acts to provide support to the price and provide a minimum exchange value with Karma.
We are in the process of writing a whitepaper for this that clarifies the network and economic benefits of the Karmx sidechain better than I can explain it in this announcement. We would expect the X11+automatic checkpointing+time warp limitation updates to be available within 3 weeks or less and the sidechain work to begin after that.
Po*More information on this possible feature will be released as we approach launch.
Greater Freedom to DevelopLike Bitcoin's development of a Bitcoin sidechain, a Karma sidechain allows us the freedom to develop and, importantly, scale. A Karma sidechain can be used for extending the features of the Karma blockchain. Things like user-issued assets, smart contracts, and a multitude of financial instruments that add value to the Karma economy.
Karmx is, essentially, Karma blockchain v2.0
Sidechains allow us to do things that we couldn't do (or would not want to risk doing) to the Karma blockchain. It creates a firewall, protecting the Karma mainchain.
FeaturesPoW phase:
- 1-way, indirect peg to price of gold
- ends 120 days after launch
- estimated coins: 3,456,000
PoS phase:
- Variable PoS interest depending on how much network security is needed
- stake with Karmx wallets
- possible continued peg to price of gold
Po* phase:
- Other unique features of this coin may be announced closer to launch
General features:
- PoW/PoS/Po* hybrid
- merged mined with Karma
- 40 million total supply
- 20 coins per block
- 60 second block target
- No new Karma coins need to be created
(for those wondering how we can do PoS and issue 20 coins per block, it should be noted that the parameters are effectively manageable but not infinitely so. The benefit of having a low number of coins for the first ~50 years outweighs the difficulty involved with running out of coins in ~200 years. Hopefully by then we'll be mining directly from our brains!)
In future we may create a two-way sidechain with lots of cool features. But for now, Karmx will be a one-way sidechain until we figure out network integrity, security, value-store properties, etc.
*Although companies like Coinbase may have their own private Bitcoin sidechains
Lol I'm sure you had no idea that was coming...
Well you did something I wasn't really expecting based on announcements, you closely missed what I think is best.
Like:-Pegged against gold (or similar, I can't imagine a better peg)
-Variable interest, depending on how it works exactly
-Can buy KARMX during PoW
Dislike:-Merged mining (any mining) to get it started
-We are using a potentially less valuable PoS system by market cap to help secure a more valuable by market cap PoW system. It isn't just an added security measure, it can lock in abuses. It is like if Bitcoin were to decide to use Blackcoin to implement check pointing. Why can't people who hold Karma directly secure Karma directly? My coin holdings (lets say 1 billion for arguments sake, which it is not the amount I really hold) would be a much better protection than somebody that mines or cheaply buys KARMX on an exchange - who could theoretically buy them for a fraction of my holdings. KARMX could become worthless just like any another coin unless you can always trade KARMX back into Karma at a set rate and rebuy at a set rate, however you may just end up with nobody holding KARMX or KARM. You are far more likely to have nothing at stake on KARMX than KARMA.
I hope PO* is something to do with actual KARM holdings. If it is releasing that as 3 out of 2 announcements is foolish because there could be billions of Karma on the market before you have a chance to announce it.
I hope people doing trades for 100s of Litecoin don't know the 3rd of 2 announcements.
I will not buy KARMX to secure KARM, that is an unreasonable expectation.
We are looking at a catastrophic mistake if done poorly and a big mistake if done correctly, with the level of mistake centering around how little or much KARMX is involved in securing KARM. Luckily you left out Karmashares so nothing can go wrong in that respect.
