- Ditch Phases 1,2,3
- Ditch XRI basket
- No pMin, no pMax
- Make fiat tokens the primary payment units on the network
- Decouple circulation of business payments (“fiat”) from circulation of XRD (“gas”) and tie them together by usage such that fiat circulation is the engine for gas circulation
- DEX at golive
- Approved Minters
- Backed fiat tokens
- Businesses can do their accounting in their familiar stable fiat unit
- Fee prices can remain stable
- XRD price can appreciate increasing network adoption as well as give incentive to speculators
- The Radix Economic Model becomes intuitive and simple enough for an elevator speech
- At golive: Genesis wallet holds XRD, no fiat tokens minted yet
- Users ramp up: inflowing fiat tokens backed by Approved Minter reserves
- Fiat tokens start to fluctuate. On creation of a fiat transaction a fraction of the fiat token goes to the DEX and creates a buy order for an amount of XRD “gas” that equals 0.01 USD No pMin. No pMax.
Thereby the business payment layer becomes the engine for the network payment layer and the price of XRD gets tied to the adoption of the network.
More adoption = more fees = more buy pressure on XRD = XRD price uptrend
- The gas goes directly to the nodes. In case of low network activity the system will airdrop a minimum incentivation of XRD to nodes.
Network activity --> daily buying pressure on XRD
4 tps --> 3.456 USDT
10 tps --> 8.640 USDT
100 tps --> 86.400 USDT
500 tps --> 432.000 USDT
This proposal suggests both: pegged fiat layer for business payments (for accounting and such) and a volatile XRD coin for network payments with a built-in uptrend (for speculation). The author strongly believes that Radix cannot have one without the other and still get wide adoption. There are already too many half baked solutions out there. “One hand don’t clap”. You need both, seperated from each other so every user can understand which one his best choice for him: safe haven oder bull ride.
- This proposal of the Economic Model only creates XRD inflation in case of low network activity (airdrop to nodes).
As suggested by @tesslerc: This Economic Model allows to set different fee prices for different fiat tokens to reflect that 0.01 USDT can be considered a “high” fee in developing countries. With having different fees for different economic areas you can make fees “relatively low” which further fuels world wide adoption. 0.01 USDT, 0.01 EURT, 0.05 RUBT, 0.10 CHFT, 100 JPYT, …
In reply to @mario: The buying algo acts no longer as a “buyer of last resort” who puts a buying wall into the order book that sucks up every drop of XRD in the market. I envision that the buying algo acts more like a pacemaker instead. The algo price sets a mental anchor in the market as it will become public knowledge that there is buying pressure for a predictable amount of XRD. For potential sellers this gives a lot of comfort. And for potential buyers this creates a little FOMO. It is a little nudge for the users, which can be very effective. Ever wondered about the fly in the urinal? Nudge theory - Wikipedia
In reply to @tadkis
Demand can be figured as a linear curve function based on the number of tps. To calculate the demand for 1000tps just double the demand for 500tps (1000tps --> 864.000 USDT) and so on and so forth.
Beauty of this suggestion:
If the resulting buying power in USD still seems too low, you can increase the transaction fee to create more buying pressure. If transaction fee was 0.10 USD instead of 0.01 USD the resulting buying pressure with 1000tps would be 8.640.000 USDT.
Removed pMin as it skews the model. The algo buys at fair market price instead.
This Economic Model suggestion was inspired by Melonports Tokenomics