The inner workings of THX Network 🛠️ 👩💻👨💻— Tokenomics (I)
Earlier we shared the exciting news of the upcoming $THX launch, starting on the 22nd of November.
Today we’ll delve deeper into the inner workings of THX Network, the blockchain-powered protocol that allows you to create and embed your own tokens in any app or website. Eventually this leads us to the THX token and it’s function in the THX Network, which is called the ‘tokenomics’ of the protocol. In this article we explain the basics of the $THX tokenomics, with a follow-up part II this week.
Pools, pools everywhere 🏊🏊
First we need some understanding of the THX Network architecture. The THX Network consists of various parts that help you embed blockchain technology in your application without worrying about security, performance or scalability.
At the core of the THX Network architecture are what we call ‘Asset Pools’, which are smart contracts that can hold any token or collectible that uses Ethereum’s ERC-20 standard. These tokens can represent virtually anything which properties are exactly the same (in type and value);
- reputation points in an online platform
- lottery tickets
- financial assets like a share in a company
- a fiat currency like EUR or USD
- a gram of silver
- and more…
Next to this we also support the ERC-721 standard for collectibles. These are representations of *unique* properties;
- a piece of art like a painting
- a photograph or video of a sport performance or song
- a virtual item in a game like a sword
The way those tokens and collectibles are used is flexible, thanks to our modular architecture. From gamified payments with stablecoins to creating and implementing your own ERC-20 tokens or ERC-721 collectibles in your app or website. The THX protocol has got it all… you only need to add it to your application.
Diamonds are forever — A modular architecture 💎
Asset Pools are build and managed using the EIP-2535 (Diamonds) concept by Nick Mudge. Listen to Nick explain them in this interview (warning ~45 min total). To increase the maintainability of the diamond facets we have grouped facets into modules that indicate the dependencies to one another. Since we plan on opening up the contract layer to new module proposals we have named them TMP’s: THX Module Proposals.
Generally speaking, the Diamonds implementation gives the following benefits to the code:
- No contract size limit
- Deterministic contract addresses
- Maintain contract functionality
The modular basis allows us to combine a variety of contracts and use them to deploy one single AssetPool smart contract. This means we’re not limited to a predefined set of features for a list of asset pool types, since we can mix modules to come up with new types while reusing existing functionality. This list shows the addresses for all Diamond facets that are maintained in this repository.
Plug-in Asset Pools into your app using the THX API 🔌
Last, but definitely not least; THX Network offers you an easy to use API to plug all the goodness described above right in to your own application, website or e-commerce platform.
To offer end users fast and cheap blockchain transactions, THX Network uses layer 2 scaling solution Polygon. THX takes away the burden of paying gas by relaying all contract state changing transactions to the API admin account which will be responsible for paying the network’s gas fees in $MATIC.
THX token — Tokenomics part I
Now that you have a general overview of the THX Network architecture, it’s time to introduce you to the THX token. While the basics of token-distribution and -circulation are explained on the token-page on THX Network website, we will elaborate on those in part II of the tokenomics.
Today we’ll zoom in on two key protocol features that we developed in the THX Network architecture and which provide potential benefits for $THX holders.
🥇Future protocol fees
Each Asset Pool is able to collect fees when tokenized assets are deposited by it’s creator or participants. Upon community vote, and if so decided by the community, the code that enables these fees is activated. From that moment on the THX token is able to accrue protocol fees, which in turn are claimable by token holders through a mechanism that performs market buys of our THX token using the fees that are collected.
As a quick example; an e-commerce merchant might want to offer $USDC cashbacks on their checkout page. While setting up their Asset Pool with 10.000 $USDC a 0,5% fee is charged on deposit. At this moment a 50 $USDC fee accrues to the protocol.
This mechanism is designed and ready for deployment (after audit); Feature/feecollector by peterpolman · Pull Request #5 · thxprotocol/modules-solidity (github.com)
🥈Govern the protocol
THX is a governance token. THX holders govern the parameters of, and improvements to, the protocol. This includes voting on managing the ‘Community Treasury’, the ‘Community Distribution’ and ‘Community Incentives’. But also more specifically the height of the ‘Asset Pool’ fees and the activation thereof.
At first this is done with gasless voting using Snapshot.org starting in Q1 2022, and later through on-chain governance.
Roadmap 🗺️🛣️
It’s important to be clear that this potential fee collection can only be activated by token holders, upon vote, which in turn requires active on-chain governance. The road to get there, and eventually decentralize the protocol, will take some time.
Our belief is that we can get to decentralization somewhere in the next 2–3 years, which is about 4 years from when the project started back at the beginning of 2020. We’d love for you to join the ride and to see each other there 💛
Sign-up to stay updated 📬
As a token of appreciation for those who wish to be updated, we’re giving a 1.000 $THX incentive to sign up to our email list *and* participating for a minimum of 75 USDC in the token launch. After leaving your email address on our website you’ll receive a link to a form in which you can submit the Ethereum/Polygon address.
About THX Network
When receiving something nice, the logical reply is “thanks”! That’s why we created the THX Network, a blockchain-powered protocol that allows you to create and embed your own tokens in any app or website, without breaking your brain or bank.
Use cases include loyalty programs, the offering of collectibles by creators, cashbacks, and engagement incentives.
The United Nations Development Programme (UNDP) uses THX Network to reward engagement on their employee and policymaker platform called SparkBlue. Over 70.000 transactions and counting have been performed on behalf of UNDP users using THX Network’s infrastructure!
Let’s meet in our communities
Discord 👾
Twitter 🐦
Or get in touch
Email our team 📧
Schedule a demo ▶️
Investment pitch deck (PDF on Google Drive) 💹
Other resources
Developer docs 📋
Code on Github 🛠️
Audit report 🕵️
Integrations with Slack, Discord and Drupal 🔌
