SEED —Ontology Pegged Value
How the Ontology Peg Works
- Sesameseed earns ONG on the Ontology blockchain as a block producer.
- ONG will periodically be converted to ONT and 100% of Ontology consensus node rewards will be utilized to back the value of SEED.
- Daily rewards for Ontology participants will be distributed using the 80:10:10 model. No other Ontology block producer offers daily rewards.
- Currently only SEED holders will be able to stake authorize with less than the minimum required amount on Ontology.
- SEED holders automatically earn rewards from multiple blockchains and SEEDGerminator. Holding SEED earns more SEED every day.
Aug. 5, 2019: This section was updated to include Foundation Rewards.
The Ontology blockchain runs on a system of stake authorizing with ONT on consensus nodes operated by Block Producers (BPs). The minimum amount that must be held in order to stake authorize is 500 ONT.
Each Ontology consensus node earns rewards from the network in 2 different ways. These rewards are in the form of Ontology Gas (ONG), a resource which gets consumed in order to access network resources or process transactions.
- If certain node requirements are met, the node earns additional rewards in the form of foundation bonus’ etc. All rewards are considered node rewards and are distributed as a part of participation rewards.
- 50% of all ONG from transaction fees paid by users on the network is split between all BPs each month. The amount of ONG each BP receives increases depending on the percentage of all ONT staked on the network to that BPs node.
There is an additional rewards process which pays out ONG directly to users, although the exact amount will vary depending on whether or not they stake authorize their ONT with a BP.
- If an individual chooses not to stake authorize their ONT, an estimated 15.7% of their ONT holdings is earned as ONG over an annual period. This percentage does decrease over time. Please refer to official Ontology documentation here.
- BPs may choose to incentivize users to stake ONT on their node by offering a portion of their node rewards. If an individual chooses to stake their ONT with a BP, they can possibly earn even more rewards depending on whichever rewards structure is offered by their chosen BP. Sesameseed will be offering 80% of its node rewards back to Ontology community participants, distributed as SEED on a daily basis. This means participants who stake their ONT with Sesameseed will earn a share of 80% of total node rewards which includes the estimated 15.7% ONG rewards, all to be distributed as SEED.
SEED is pegged to ONG and ONT
Sesameseed earns rewards from Ontology in ONG, but only ONT can stake authorize on the network in 500 ONT increments. At regular intervals, Sesameseed will convert its accumulated ONG rewards into ONT. The ONT and any residual ONG will continue to back each SEED token in circulation. This allows the ONT to be efficiently utilized to stake authorize to the Sesameseed node and earn rewards for SEED holders.
As an example, if Sesameseed has accumulated an amount of ONG worth 700 ONT, the portion of ONG that would purchase 500 ONT is converted while the remaining portion equivalent to 200 ONT would stay as ONG in reserve. All SEED tokens in circulation would at that point be backed by 500 ONT and an amount of ONG equivalent to 200 ONT. As shown in the graph below, the ONG:SEED pegged value will steadily rise as ONG accumulates, and then drops as ONG is converted to ONT by Sesameseed to ensure maximum participation in the stake authorization process and increased rewards for SEED holders. SEED is pegged to both ONG and ONT, allowing the total pegged value of SEED on Ontology to increase as daily SEED distribution is limited. The data in the figure below represent a projection of the Ontology pegged value of SEED using conservative estimates.
Sesameseed is represented on multiple blockchains. Each represented blockchain can have different rewards cycles. For example, TRON rewards block producers every certain number of hours while Ontology block producers can claim their rewards every certain number of blocks. All Ontology node rewards will be tracked by Sesameseed on a daily basis and included in the calculation for total daily node rewards. Rewards will be distributed as SEED.
Every SEED is backed by tokens which automatically participate on their native blockchain and earn more SEED. Distributing rewards daily maximizes rewards for participants through this compounding system. In accordance with Sesameseed’s 80:10:10 reward model, daily rewards will be distributed to participants who stake authorize their ONT on Sesameseed’s consensus node as SEED token on the Ontology network. This is unique to Sesameseed. At the time of this writing, no other BP on Ontology offers daily rewards.
Another unique utility provided by Sesameseed for its community is the ability to stake authorize with less than 500 ONT. Currently this opportunity is only available to SEED holders. Each SEED token is backed by a certain amount of ONT and that ONT automatically participates in staking with Sesameseed. Even though each individual SEED token will be equivalent to staking with less than 500 ONT, all the SEED tokens in circulation will be aggregated and the rewards they earn will be divided amongst all SEED holders in proportion to how much SEED they hold.
At the time of this writing, Sesameseed is the only BP on Ontology that offers daily rewards and staking with less than 500 ONT.
Sesameseed is committed to providing increasing value and utility to its SEED token. Participation across multiple blockchains will increase rewards and the pegged value at a faster rate. Each new blockchain that Sesameseed joins will expand the reach of SEEDGerminator to new developers and communities. This will translate to more incentivized blockchain development and adoption, which in turn will result in more monthly rewards for SEED holders.
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