"The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions..."- Bitcoin: A Peer-to-Peer Electronic Cash System ("Bitcoin White Paper")
With Bitcoin, the original purpose centered on removing the need for third parties involved in "small casual transactions".
Due to network actors that emerged, such as ASICs, which are dedicated computers built entirely for the purpose of cryptographic mining, Bitcoin's fees have sky-rocketed, making small casual transactions unfeasible, and leading to forks (Bitcoin Cash) and other cryptocurrencies.
Forks are a good thing, and more cryptocurrencies with unique properties serves as a good thing for the broader community; however, if Bitcoin were designed today (with 10 years of data in seeing how cryptocurrencies perform in the real world), we believe that certain tools would have been added to the network's design which would usher it towards its original vision of being used for small casual transactions, and less towards where it currently is: a currency with high-fees and used mainly as a Store of Value.
For this reason, we have created the Cryptoeconomic Reserve.
On January 5, 2018, one of Ethereum's creators, Vitalik Buterin, published an exploratory idea aimed at improving the ICO model by merging the benefits of the Decentralized Autonomous Organizations ("DAO") with the Initial Coin Offering ("ICO") model. The goal of the concept, which is termed a "DAICO", centered on minimizes the complexity and risks for the Token Holder.
DAICO's have not yet become the standard in the realm of new cryptocurrency projects; however the idea brought the idea of creating more Token Holder protections and introduced some novel cryptoeconomic concepts. One concept Buterin introduced, is a state variable called tap (units: wei / sec). The tap serves as a safe-guard to token holders to hold the project's team accountable in meeting the milestones of the project. This is done by setting the tap rate in which the funds can be withdrawn from the project's contract to be spent on developing the project and meeting its milestones. The tap rate specifies the amount per second that can be withdrawn from the contract. If the project progresses and even if additional requirements arise, the tap rate can be voted on and increased.
For this reason, we developed a Cryptoeconomic Reserve built into the smart contract of the XYO Token Sale. The purpose of this reserve is to have a mechanism that can be "tapped" in order to provide cryptoeconomic incentives to important members of the XYO Network ecosystem. This ensures that the XYO Network grows in the manner necessary to build a robust location network and eventually replace our sole-reliance on GPS. In an ideal system, the XYO Cryptoeconomic Reserve would never need to be tapped; however because the XYO Network relies on location-verifying hardware providers across multiple acting components, cryptoeconomic incentives may need to be rewarded to certain crypto-location mining components that would otherwise not feel incentivized to do so if only paid by the XYO Gas provided by the blockchain smart contract developers that wish to use the location data provided by the acting component. To achieve this, the Cryptoeconomic Reserve can be tapped to provide cryptoeconomic subsidies to the actors in the XYO Network, though, ideally the Cryptoeconomic Reserve would never need to be tapped.
The Cryptoeconomic Reserve may be tapped to incentivize the following network actors:
Proceeds from the XYO Token Sale will be allocated in what we deem the best way to achieve our primary vision: displacing centralized GPS. We believe the appropriate mix to make this happen is devoting our resources (which includes our funds, as well as the XYO Network ecosystem's focus) on the following areas:
|PRE-SALE||XYO MAIN SALE||
|Private||Open||GAMMA Platform Sale; Crypto-location Miners; Exchanges|
|2.1.18 to 3.6.18||3.20.18 to 5.20.18||5.21.18|
|15 ETH||0.5 ETH||1 ETH|
|$48M Target Cap
Unsold & Unallocated Tokens Burned; All Sold & Allocated Tokens = XYO Token Pool
|XYO Token Pool|