Native and Backed Phonons
There are two types of phonons: native phonons and backed phonons. Although their value is derived from different sources, they are functionally interchangeable on the phonon network, where they share these benefits: No transaction fees, infinite scaling, perfect privacy, and instant settlement.
The Phonon DAO has decided to move forward with experimenting with native phonon mining on the upcoming testnet. In preparation for this, let’s discuss native phonons and how they differ from backed phonons.
A phonon is a token that is transactable on the Phonon network. It is immutable and secured by hardware (think credit cards and the eSIM inside your smartphone). All phonons — regardless of their type — are equal and interchangeable on the phonon network. That said, phonons are broken into two categories: native and backed.
Native Phonons
A native phonon is independent of any blockchain. Technically speaking, it is a hash associated with its secure hardware’s ID. It is mined on a Phonon card (and in the future, any Phonon-approved hardware). There is no fee to mine a native phonon — the costs are time and negligible electricity.
A native phonon’s value is derived from its mining difficulty (i.e., how rare it is). This rarity (and therefore the native phonon’s value) is denominated by the number of leading zeros in the binary representation of its hash. It is more time-consuming for the card to mine a native phonon with several leading zeros, so these are worth more:
- A one-bit native phonon has one leading zero and is the easiest to mine.
- A two-bit native phonon (two leading zeros) is twice as difficult to mine as a one-bit phonon and is equal in value to two one-bit native phonons.
- A three-bit native phonon is twice as valuable as a two-bit native phonon.
- …
- The largest native phonon is a 255-native phonon, though mining cards have limits to how much they can mine before they physically break.
It’s important to note that native phonons with only a few leading zeros will be worth very little, at least to start. For example, current tests show that a card can mine approximately 40 hashes/second. At that rate, a one-byte (that’s an 8-bit) native phonon can be mined every ~3 seconds. A two-byte native phonon can be mined every ~6 minutes.
The user interface will evolve as we approach production, but it will be incumbent on the user to set their upper and lower bounds on the value of native phonons they are willing to mine. The Phonon DAO will release more information on native phonon emissions in the future, but it’s worth highlighting now that cards will have a hard-coded maximum number of bits they can mine (in any combination of native phonon that the user desires, as set by the user interface). This emission curve will reduce with time.
Finally — and I would argue most importantly — a native phonon’s value is inherently verifiable by other phonon hardware, thanks to clever cryptography. No need to check in with a blockchain to verify the on-chain asset.
Backed Phonons
A backed phonon is a keypair tied to an on-chain asset. It is minted by interacting with a supported blockchain, and the fee to create a backed phonon is dependent on the blockchain. A backed phonon’s value is derived from the asset backing it. For example, a 2 ETH backed phonon is worth (surprise!) 2 ETH. You can think of a backed phonon as the keys to unlock it’s on-chain counterpart. Using the Phonon network, you can securely and instantly send these keys to anyone for free.
Both native and backed phonons share these characteristics:
- Free to transact: A phonon transaction is simply an exchange of data packets, be them native phonons, backed phonons, or a combination of the two. Whether you’re using your phone’s NFC to pull phonon off your eSIM or using a card reader at the coffee shop, the transaction is free.
- Infinitely scalable and instantly settled: Transactions are peer-to-peer and independent of any blockchain. No need to wait to be included in the “next block.” Transactions are instant, regardless of the number of phonon transactions happening at the same time.
Native Phonon Use Cases
A common question we receive is, “What is the point of native phonons?” Imagine a scenario where you only need $3 worth of phonon to pay for a bagel. It would cost you more in gas and transaction fees than the actual phonon is worth. This is where native phonons shine: They are low value and live on the Phonon network to provide liquidity. Remember, as well, that phonons are immutable. If you need to make change for a relatively inexpensive transaction, you could send your backed phonon worth $100 of ETH to a changemaker, who would in turn send you $100 worth of lower-value native and backed phonons.
Another use case of native phonons is instant value verification. Backed phonons are simply keypairs — they have no idea what they are worth. If someone is offering to pay you in backed phonon, you (or your wallet software) will want to verify the on-chain assets by querying the blockchain. It will be hard to verify that $30 SOL backed phonon if the blockchain is down. This isn’t a problem for native phonons. They are instantly verifiable, no network required.
Phonon DAO
Within the Phonon DAO, we are still working through the process to refine our global mission and values — we would love your input! Drop into our discord and let us know what’s on your mind.
