Ravencoin — Asset Issuance Cost

Let me start by thanking everybody in the community that has passionately contributed thoughts and ideas on the economics of asset creation and RVN burn rates. There are several great ideas that have been thoroughly discussed by the developers. That being said, there will be some that will be unhappy with the final decision. Please don’t let that affect the unity of the Ravencoin community as that is one of our greatest strengths.

Overview

First, let me summarize the problem and introduce a few token economic concepts.

Priorities of Ravencoin

Easy to Use — This is a high priority of Ravencoin. There are other asset platforms, like ERC20, but they are confusing and require an understanding of smart contracts, GAS, and it’s possible to lose your tokens if you don’t know what you’re doing.

Proposed Options

Fixed 500 RVN burn for asset issuance

  • Pro: It is consistent with the roadmap.
  • Pro: It is simple and easy to understand.
  • Pro: It automatically puts limits on the number of assets
  • Pro: As mining hash power and price increase, the cost of asset issuance should increase.
  • Pro: If 500 RVN too high, then market for 100 RVN sub-assets under premium top-level will materialize.
  • Con: It may price out some use cases as the cost per RVN increases.

Fixed 500 RVN burn adjusted at the halvenings (with a floor)

  • Slight modification from the roadmap
  • Pro: Adapts to the potential (but unknown) increase in price at the halving.
  • Caveat: Can’t continue to halve or it goes to zero.
  • Con: Not as straightforward as 500 RVN (fixed)
  • Con: Shifts to arbitrary floor.
  • Con: Assumptions about market price of RVN increasing at halvening.
  • Con: Need to code for transitions around halvening to prevent asset creation failure — could be as simple as >= X where X is cost to create asset.
  • Pro: Less likely to price out use cases.
  • Scaled halvening (25% off at each halvening with a floor of X)
  • 4 halvenings (500->250->125->skip->62.5->skip->skip->31.25)
  • Reduces by 20% of original value at each halvening. (500->400->300->200->100)
YEAR      ISSUANCE      RE-ISSUE/SUBS      UNIQUE
Now 500 100 5
2022 400 80 4
2026 300 60 3
2030 200 40 2
2034 100 20 1

Adaptive RVN based on number of asset issuances in X blocks

  • Con: Requires more constant values to be guessed, and estimation on the “right” amount of asset issuance
  • Pro: If no assets are being created, the cost (in RVN) lowers.
  • Pro: If “too many” assets are being created, the cost (in RVN) increases.
  • Con: Complexities like asset issuances failing because cost went up between asset creation tx and confirmation in a block.
  • Con: Mempool holding asset creation creates a potential time lag.

Adaptive RVN based on mining hash power

  • Pro: Hashpower is a proxy for value, but only after factoring for electricity price, and hardware efficiency.
  • Caveat: Intelligent guesses must be made on efficiency increases and power costs and target a range.
  • Example: Set 50,000 difficulty as baseline at which 500 RVN is the target. If diff drops to 25,000 make it 1000 RVN, if the diff goes to 100,000, it would be 250 RVN to create an asset. Note: This does not factor in gains in mining efficiency or electricity costs increasing.
  • Con: Unknown hardware efficiency changes.
  • Con: As security increases exponentially, this keeps the cost of asset creation relatively static (subject to volatility in hardware efficiency — — cheaper with more efficient hardware)
  • Con: Similar complexities for the code to adapt by X blocks. As hash power goes up and cost goes up, some asset issuances will fail because they were priced incorrectly for consensus algorithm.

Recycling RVN through mining instead of burn

  • Con: RVN not removed from circulation
  • Con: Ravencoin not being burned does not help token economics with excessive circulating supply.
  • Con: We want the market to limit the number of assets created because blockchain data, UTXO sets, and storing of all asset names to prevent duplicate creation needs to be done by all nodes.

A second token with its own economics

  • Some have suggested an additional token with its own economics. Ravencoin will not have two different tokens because it is confusing and goes against the ease-of-use goal.

Send RVN to a development fund instead of burn

  • Con: Not compatible with the model of RVN which is to not have a developer set-aside.

Recurring payments for asset names (expiring assets) — returning names to the pool

  • Pro: Recurring burn
  • Pro: Unused assets return to available pool.
  • Con: This is too complicated in a UTXO model.
  • Con: There will be unspent outputs owned by users.
  • Con: If a single unpaid renewal invalidates the assets, it’s unlikely to be the type of system where people know with certainty they have the tokens.

Ratios

500 RVN — Asset issuance (any qty) — Minimum 100

  1. Agree that a secondary market (GAS) is not a good idea for Ravencoin — primarily due to excessive complexity.

Freedom advocate, crypto developer, businessman, entrepreneur, and lead dev for Ravencoin — a top crypto-currency and asset issuance platform.