MonetaryCoin Forging Introduction

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Monetary Protocol

5 min readJul 24, 2018

What is MonetaryCoin Forging?

Forging is the process of mining new coins on a blockchain that employs a ‘proof-of-stake’ approach for new token forging. The more coins you commit to forging, the more coins you can earn. Other coins that operate on the more familiar ‘proof-of work’ systems require specialized computer equipment to earn new coins. MonetaryCoinERO (MERO) and MonetarCoinCHI (MCHI) can be forged today with the help of this handy DApp: https://Forging.MonetaryCoin.io. In fact, they are being forged right now.

Each member of the MonetaryCoin Series will go through two stages of forging:

Stage One (Initial Distribution): A number of MonetaryCoin tokens are created in this stage so that the number of coins equals one percent of the money supply in a subject country. For example, the number of MERO coins is calibrated to a broad measure of the supply of Euros (i.e. M2). Expect a relatively high block reward for forging in this period. This phase lasts for two years, including a 6 month period where coins are distributed in daily auctions outside the forging process. Today, stakeholders are buying token in a 24 hour auction and then in immediately committing those tokens to the forging DApp. When the auction ends that will still leave about a year and a half for forging before the next phase begins.
Stage Two (GDP Forging): A country must grow its way into new coins — that is to say, if GDP expands then the number of coins available to forge increases. For example, if the Eurozone economy has grown by 3% then there will be another 3% of MERO available for forging. The duration of this stage is otherwise unlimited. This approach comes from the monetarists school of thought, hence — MonearyCoin, MonetaryCoinERO and MonetaryCoinCHI.

Algorithmic money supply

Total Supply — Total amount of tokens in circulation.
Block Reward — the number of tokens forged for each new Ethereum block
Total Stake — Number of tokens currently committed to forging.

Step by step guide to forging using MetaMask:

To try the forging DApp first obtain coins on the Distribution Dapp with the help of this video or buy them on an exchange. This section assumes some familiarity with Metamask, and the video below offers a helpful primer for those new to this handy browser plugin that doubles as an Ethereum wallet.

When visiting the DApp and using MetaMask your screen should look something like the following:

Below please find step-by-step instructions to get you started:

In MetaMask, connect to the Mainnet and unlock the wallet. That’s important because there are several Ethereum test nets and you do not want to use those.
Go to https://Forging.monetaryCoin.io
Select the token you wish to forge: today that would be either MCHI or MERO — and remember, this assumes you already have some tokens in your MetaMask wallet:

Scroll to the bottom of the page, make sure you see the following:

The Ethereum address of your MetaMask wallet should appear on the left side of the screen under ‘Address” and the balance of the MonetaryCoin for MERO held in your Metamask wallet (or MCHI) should appear under ‘Details’ next to ‘Balance” on the right side of the page.

Select amount to commit (in this case we’ll commit 1,000 tokens) and press the “commit tokens” button, then a MetaMask window will pop up asking you to formalize the transaction and set the Gas Limit and Gas Price:

Submit the transaction using the Metamask pop-up and wait for the transaction to be mined. When the Ethereum network is very busy a higher minimum gas price is recommended.

The commitment should appear under details.

Once the transaction is mined and the commitment appears under Details, we can query the forging reward:

The reward is calculated on-chain, and all the factors that influence it are displayed: The committed value, the block number, the stake during the commitment block and the block reward during the commitment.
The expected reward is the value that we would get if the withdraw transaction were mined in this block. The actual reward is calculated on chain during the actual transaction once submitted via Metamask.
When ready, press the Withdraw tokens button and submit the transaction using Metamask. Notice that we use Metamask to commit tokens and then use it again to withdraw tokens.
Once the transaction is mined, the user is credited for the original commitment and the forging reward.

How are newly forged coins distributed?

Each mined block bears a specific block reward. During the initial distribution the block reward is constant, and during GDP mining the block reward relates to the rate of GDP change in that token’s country or currency union.

The forging reward for a single block is calculated as follows:

S — user’s commitment

TotalS — all user commitments

R Block — block reward

So, the user gets a reward proportional to her commitment.

For multiple blocks the exact reward can be calculated as follows:

n — number of blocks

R i — reward for block i

TotalS i — all commitments on block i

To calculate the block reward we would need to store the total commitment for every block on-chain, and that might lead to a huge Ethereum gas cost related to storage. We can approximate this calculation by taking into account the first and the last values of the total commitment.