Numbers Protocol Asset & Deflationary Token Economy
Numbers Decentralized Photo Network
Numbers is building a decentralized photo network for creating community, value, and trust in digital media. Its Numbers Protocol redefines digital visual media as assets and is the backbone of a suite of tools for registering and retrieving images and videos in the Numbers network. These include:
- Capture app: The first blockchain camera in the world that users can easily register photos and use Web 3.0 applications.
- Seal API: Developers and enterprises can implement Numbers API to register photos and access their Web3.0 addresses and certificates.
- Certificates: content authenticity certificates with on-chain provenance
- CaptureClub marketplace: Native NFT marketplace which allows photo generators to sell and stake their creations.
- NFT Search Engine: The first Web 3.0 NFT search engine that helps users verify the history of NFTs and prevent potential NFT fraud.
Numbers champion the purity of digital media and enable people to think more critically about the interactions between our images and the world around us. The goal of Numbers is to tokenize authentic photos (including images and videos) to create a decentralized photo network in Web 3.0. In order to fully realize this goal, we are introducing a Deflationary Token & Asset Economy — a system executed on a quarterly basis to determine service fees and calculate the number of tokens to be bought back and burned.
Web 3.0 asset economy
The transition from Web2.0 to Web3.0 brings a fundamental change in how assets are viewed and how photo services operate. In Web3.0, assets are registered and have a clear ownership record. This distinction allows assets to have value and introduces the notion of an asset economy. It also opens the door for new types of photo services in the Web3.0 space.
Having already created tools and services to equip users to register assets in Web3.0 as well as a native network token, NUM, Numbers Photo Network is aptly equipped to support the Web3.0 asset Economy.
The following table shows the network’s basic service fees announced for Q1 2022. The fee structure is based on NUM, and fees will be adjusted on a quarterly basis to ensure users can leverage network actions at stable prices.
More base service fees may be announced in accordance with the roadmap and development progress.
Developers and enterprises may also leverage Numbers services (Seal API) to register & access photos as well as retrieve on-chain provenance, Web3.0 addresses and certificates. Similar to user services, fees will be adjusted on a quarterly basis to ensure API users can have stable fees.
Discovering creator signatures, ownership records, transfer history and content provenance of photos uploaded to Web2.0 services such as Instagram or other social media platforms is difficult if not impossible due to the nature of the current web. Within the Numbers decentralized Web3.0 photo network, these records are accessed easily because of Numbers Protocol.
As the native content protocol of the Numbers network, Numbers Protocol leverages the latest in Web3.0 and content provenance technology to ensure the purity and traceability of content. Once the authenticity of content is assured, it opens the way for 3rd-parties to provide innovative photo services to help users navigate the Web3.0 space with their photo assets, through registration, monetization, etc.
We call these 3rd-party services Ecosystem Apps which include (but are not limited to) NFT marketplace, Web3.0 storage, social media platforms, and stock image/video services. For Ecosystem Apps, 0.5% of the total payments charged will be collected in order to keep the long-term operation of the network. If the Ecosystem App is “free-to-use”, there will still be a base payment applied when users use the Ecosystem App in the Numbers network.
Here are the partnerships announced in the last two months which represents the progress we have made with Numbers Protocol adoption.
Deflationary Token Economy
The value generated by the registered assets will be used to buyback and burn NUM tokens. The number of tokens to be burned will be based on the network adoption and the revenue of the quarter. We will use 20% of the network value to buy back NUM and burn them until we buy 50% of all the NUM (500MM) back. The first NUM token burning is scheduled for March. The total amount of NUMs to be burned in the first quarter will be based on the total registered assets.
N_burn = N_newly_registered_assets * R * 20%
The constant R represents the value of each newly registered asset and is a function of the quarterly adoption rate, market cap, and also NUM price.
The burned tokens will be removed from the circulating supply.
We noticed that the current asset growth curve is similar to the growth of Instagram’s active users. As a result, we may refer to the growth curve of Instagram as an estimation of the future growth of registered assets in the Numbers network.
From the above graphic, the grey line indicates the growth of the Instagram active monthly users from its founding in October 2010 to April 2017. The solid blue line indicates the current asset growth in the Numbers network (from Service Launch to December 2021) while the blue dotted line represents the projected growth of the Numbers network.
Constant R of Q1 2022 is determined as 0.5. In accordance with the projections, the estimated burned tokens will amount to
N_burn_Q1_2022 ~ 30M * 0.5 * 20% ~ 3M
Since it is the first time we perform token burning, the N_newly_registered_assets will be equal to the total assets registered in the Numbers Protocol network (from Dec 2020 to March 2022).
Community focused and decentralized are core values of Numbers Protocol. As a reflection of our values, we hope to create a transparent and democratic space for our community through decentralized governance. Establishing a Decentralized Autonomous Organization (DAO) is our first step to creating an open space for us to hear voices and input from our community as well as empowering DAO members with decision-making power to pursue common goals for the future of Numbers network.
Community review of Asset & Deflationary Token Economy plan starts tomorrow (14th Jan 2022) until 13th Feb 2022. The feedback and suggestions from the community review will be considered as potential future improvements and will be carefully considered and voted by NUMBERSDAO.
The basic governance rules of NUMBERSDAO have passed the community review in December. More details of the first poll will be provided by the end of January 2022.
About Numbers Protocol
Numbers is building a decentralized photo network for creating community, value, and trust in digital media. Its Numbers Protocol redefines the nature of digital visual media as assets and is the backbone of a suite of tools for registering and retrieving photos and videos in the Numbers network — the Capture app, Seal API, and Trace website — plus the CaptureClub marketplace and a proprietary NFT Search Engine. Numbers champion the purity of digital media and enable people to think more critically about the interactions between our images and the world around us.