Any economic activity has its own energy, which can be converted into value. As an example, we can consider taxes like VAT or sales tax: the higher the activity in the economy — the more tax revenue is generated. Regarding blockchain technology, many people think that transaction fee is like a tax. But that is not the case!
Let’s look at the tokenomics of most modern blockchains — they are almost unchanged from the very first model laid out back in Bitcoin.
As you can see, we are not aware of what users actually do in the blockchain. They pay to use the system, just like they buy songs on Apple Music or movies on Netflix.
Taxes are not levied on the number of Fa notes in a purchased song or the number of frames in a movie — they are charged on payments for using the system.
Hence, this very scheme shows the essence of economic activity, from which we can get additional value. But in passing, we can also solve other problems of the conventional Tokenomics model.
First, almost all existing blockchains use only one system token. As we all know, one token or currency cannot perform well in all three basic functions of money at once: the measure of value, means of payment, and means of accumulation.
If a currency rises in value, thereby performing well as a means of accumulation, it will lead to deflation and a decline in economic activity. If it becomes cheaper, spurring economic activity, then what kind of a means of accumulation is it? It seems, that it is impossible to build a consistent economic model using only one token.
Second, the network node takes a commission for each specific transaction, which leads to the possibility of front-running. This is when someone pays a higher commission raising the priority of operation and thereby managing to buy some asset before a transaction with a big purchase.
Third, as the network load grows, so does the absolute price of the commission, which prevents further activity increase. Also, when the relative to outer world token price rises, the commissions seem more expensive.
And usually, the relative and absolute costs of a fee increase at the same time! Probably, the people who will understand me best are those who also paid $150 per transaction in Ethereum at the peak of the bull run.
Now that we know the tasks to solve and the problems to escape, let’s look at our solution.
Our tokenomics is based on two tokens. BUSD is an stable token in which a transaction fee is paid.
YET is a highly deflationary token used to print BUSD/USDT. Initially, there will be 3,000 000 000 YETs in the system, but they will be burned for printing BUSD/USDT. Moreover, not only will YET be permanently burned, but there will be a constant demand for it. Also, the distribution of the YET token will be organic and 100% (3,000,000,000) of it will be distributed by Fair Launch, no any other tokens will be held by the Team and no single holder will be able to get more then 1% of its supply.
Unlike the obsolete tokenomics of other blockchains, YETI will have new mechanics called Grinder. This is a system money printing machine whose working principles are quite simple.
First, the Grinder knows how many YETs have been burned and printed. Thus, it can create as much BUSD/USDT as needed to make YET’s volume in the economy equal to a predetermined amount. In essence, the YETI Grinder acts as an automatic central bank.
Second, Grinder will determine which YET tokens to burn by profitability — whoever offers to burn more YET for the same amount of printed BUSD/USDT will win. A queue will be formed for burning YET: the higher the YET rate offered for burning, the further in the line will be such an offer. This is similar to limit sell orders, with a constant limited buying volume from the Grinder.
Thus, adding Grinder to the system not only gives anyone access to printing money but also solves many other problems, the most important of which is isolating the value of the economic activity.
The more transactions are in the system, the more BUSD/USDT tokens will be redeemed from the market and more YET will be burned. It’s as if all the taxes in a country are destroyed, causing hyper deflation.
With Grinder, it is possible to reward validators/holders according to more flexible rules (for example, depending on the percentage of time online), as not all the fees are received directly by the network nodes but are burned. But how will be the order of transactions in the block determined? For example, it can be set by operation hashes. This approach will eliminate the possibility of front-running.
Due to the stable nature of the BUSD/USDT token, the relative cost of fees won’t grow much over time — it will depend on the ratio of BUSDs and real-world inflation.
Since the base fee will be set at 1%, 10 000 000 transactions per day can burn 10% of the total supply.
As stated above, YET is released into circulation to compensate burned fees so that a particular supply volume is reached. Initially, it will be done according to a mathematical formula.
It is literally a certificate for printing money (BUSD/USDT) in the system, the value of YET will be backed by the decreasing supply and the permanent need of YET to be burned for buy tax.
Binance Chain
Token Name: YET
Reward Token: BUSD/USDT
YETI Chain
Token Name: YET
Reward Token: YETS (Pegged to BUSD/USDT)
But how will it actually work?
You can try the simulation here: tokenomics.yetichain.com
Check our communities:
Twitter: https://twitter.com/yetichain
Telegram: https://t.me/yetichain