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Managing Token Supply – the Logistic Curve

Managing Token Supply - the Logistic Curve

Architected with miner and user adoption ter mind, the Equibit network is designed to go after a natural production curve and provide the network with an apt supply of tokens spil it develops te use. By engineering the production of EQB tokens te an S-curve and ter line with the network effect, Equibit Group ensures that tokens are released ter parallel with podium adoption, translating into better price stability, miner profits, and decentralization.

Imagine an oil exploration company, far out ter the middle of nowhere, punching crevices te the earth ter search of the black gold. One day this precious resource spews forward.

Spil they drill more fuckholes, more oil is collected at an ever-increasing rhythm. The field develops spil the deposit is mapped out and the best places for more wells are determined.

Eventually, the field reaches peak production rates. The balance inbetween the internal pressure of the oil field, and the fuckholes from which it can escape, are at their optimal point.

At some future date, the pressure commences to druppel, more energy is required to get the oil out of the ground. Pumps are installed and the production rate declines leisurely at very first, then more rapidly.

Eventually, the resource is depleted.

If wij were to plot the daily production of this oil field wij would expect it to look like a bell curve. This is, te fact , pretty much exactly what happens. It happens to coal and other natural resources spil well.

When Bitcoin wasgoed created it wasgoed meant to be a form of digital gold and overheen the years it seems to be meeting that use-case . However, where it didn’t fairly mimic gold wasgoed ter the rate at which Bitcoin wasgoed being produced.

Bitcoin production is governed by a plain mathematical algorithm , embark by making 50 bitcoins every block and cut that amount te half every 210,000 blocks. Each block takes about Ten minutes to produce.

The problem with this function is that no natural resource behaves this way. Maximum production rates aren’t realized until years, even decades, after the resource is discovered. Spil a result, more than half of all Bitcoins were mined during a time when the system languished te obscurity and without chance for real adoption.

Imagine if today, almost nine years into Bitcoin, wij had only recently kasstuk peak production rates.

Certainly, it would make presently commencing up a Bitcoin mining operation much more lucrative and help to decentralize the mining base. Furthermore, due to the low initial production rates (i.e. inflation), wij may not have seen such wild swings te Bitcoin’s value te the early years.

For thesis reasons, Equibit Group determined to explore other possibilities for EQB production. Networks like Bitcoin and Equibit are a public utility, with their own embedded form of payment te exchange for the network’s services. Thesis networks and their tokens are a commodity resource like any other, and should behave spil such.

Come in the logistic curve, also referred to spil an S-curve.

This curve is already ter use by petroleum engineers and other experts te the natural resource business to predict the future rates of production of the resources they oversee. It’s a good approximation for how the natural world works. For us, it seemed only natural for Equibit to go after the same pattern, permitting chance for synergy inbetween network effect and mining production.

Using the formula for a generalized logistic curve, wij plugged ter our very first requirement, a total mineable supply of 21 million EQB.

Plain enough. But wait, there’s more.

Wij had to pick a growth rate, something that determines how long it would take for the system to generate all 21 million EQB. Using a 0.001% rate adjusted the curve so it would take about 60 years for all the EQB to be created. This ensures the miners are subsidized with fresh EQB for more than enough time than is needed for the network to reach broad industry adoption.

Eventually, the standard curve centers around zero, where maximum production rates occur. This will not do, spil the block toonbank starts at 0 and goes up to infinity. Wij therefore shifted the curve to the right by 420,000 blocks, meaning peak production rates of 52.Five EQB vanaf block aren’t klapper until the end of year 8 of Equibit. At this point te time a little overheen half of all EQB have now bot produced. Oh, and of course wij can’t leave behind the 1 million EQB pre-mine.

The formula for this curve looks like this:

This is what Equibit will use to calculate the mining prize of the very first block. It will contain a prize of harshly 1,000,000 + 310,258 EQB. The latter portion will be kept by Equibit Group. The million EQB pre-mine is being sold to early-adopters, with 229,301 already spoken for.

So far so good, but what about all the subsequent blocks? This formula calculates the total supply of the system, not the prize of an individual block.

Calculus to the rescue!

By taking the very first derivative of the above formula, wij arrive at our block prize equation.

The Equibit production curve represents a more natural way for a fresh network to create its utility token. Overheen 94% of all EQB are mineable by the public, meaning the system is built for long-term resiliency. The lower inflation rate instantly following system inception should also help to reduce volatility ter the value of EQB, making adoption lighter by the industry. Spil peak inflation doesn’t toebijten until the end of year 8, this should hopefully coincide with the point of rapid growth te its userbase, providing a powerful incentive for fresh miners to join and secure the network.

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