How Do Power Ledger’s Active Projects Impact Circulating Supply of POWR?
The POWR token plays an important role in the adoption of Power Ledger’s technology. The more users we onboard, the more the token economy will drive the use of POWR.
More users equates to more energy being traded on the platform, which in turn requires more POWR tokens to be escrowed by application hosts to gain or maintain access to the Power Ledger platform.
There’s only 1 billion POWR tokens in existence, and there will never be more created. Only a portion of those are currently in circulation. Every time we onboard an Application Host, they’re required to escrow POWR. For as long as they maintain use of the platform, the tokens will remain in escrow and out of circulating supply.
There are two options for Application Hosts when escrowing POWR for projects.
The first is for them to purchase the agreed upon number of POWR from an exchange, which will then be sent to the escrow address.
The second option is for Application Hosts to pay Power Ledger in fiat currency, and Power Ledger will purchase and escrow POWR on their behalf.
We envisage that the second option will be utilized less as Application Hosts become more educated in the handling and use of tokens.
In some cases we may escrow POWR from the Growth Pool, as per the whitepaper, however we intend to keep this to a minimum.
We’ve developed an escrowing system that we believe provides the transparency the POWR community is seeking, while also protecting the commercially sensitive information of our partners.
We intend to release a POWR Project Escrow Report periodically, detailing the total amount of POWR being held for active projects.
The reason for releasing this report periodically is so the community can track the trajectory of tokens in escrow in relation to the growing number of projects.