Minter 3: Dynamic Mining and 3Y Stake Lockup

A large Minter Network update aimed to modify the tokenomics of BIP is set to take place on April 12 this spring. Two of the most important changes:

  1. Dynamic mining

Let’s take a closer look at how each of these can contribute to the strengthening of BIP, the network’s native coin.

Dynamic Mining

Right now, a set number of BIP coins is mined in each block. At the time of writing, this figure stands at 238 BIP, which is distributed among validators and their delegators. It’s gradually going down (once every 200,000 blocks), making it more difficult to mine new coins.

The decrease in block rewards is common in many chains and algorithms. For example, the halving was first applied by Satoshi Nakamoto in his Bitcoin mining protocol design.

New dynamic mining in Minter implies that the number of BIP mined will depend on the price of BIP.

ℹ️ For example, when the supply of coins on the market exceeds the demand, BIP’s price drops. To make this less impactful, we introduce a block reward balancer that reacts by reducing block rewards when the BIP price falls, helping to avoid further BIP surplus. At the same time, when the BIP price goes up, the balancer increases the rewards to maximize staking outcome.

With dynamic mining, the block reward depends on the price of BIP. The greater the price, the greater the reward, and vice versa. There are, however, two different delegation schemes, under which delegator block rewards are reset and then accumulated until a pre-specified value is reached. A ‘pre-specified value’ here refers to the amount of BIP in a block. This one is re-calculated every 24 hours at a pre-determined time (somewhere between 12:00 p.m. and 1:00 p.m. UTC).

The user will have an option to choose either of the delegation schemes:

  1. Regular delegation (no stake lock) — the reset feature enabled

Regular Delegation

Regular delegation is a standard scheme, under which you can get your stake back in 518,400 blocks after unbonding. During that time, the amount withdrawn won’t be generating any new rewards.

To delegators, a rule of ‘one-by-one unbonds’ will apply. This means that it will be impossible to make the next unbond transaction while the previous one is still in progress (518,400 blocks).

Block Reward Calculation Formula:

Price ^ (1/4) * 350,

where

  • Price : BIP/USDTE rate

Price Examples

  • Price = $0.001, reward = 62 BIP

Block Reward Reset

When block reward is reset, the number of BIPs in a block goes to 0. The reset occurs if there’s a sharp, 10-percent drop in the price of BIP:

100 - Price_new / Price_old * 100,

where

  • Price_new : self-explanatory

Return to the pre-specified value happens if the criteria below are met:

  1. The following snapshot does not record another 10-percent drop

Burning by Balancer

When block reward is reset, the BIPs that haven’t yet been distributed to the pre-specified value are burned via being sent to the 0th address. For example, if the block reward has been reset while the pre-specified value = 100 BIP, then that 100 BIP is burned. The next snapshot sees the addition of 10 BIP, the difference between that and the pre-specified 100 BIP is 90 BIP, so the 90 BIP gets burned as well.

Delegation with a 3Y Lockup

Unlike the standard scheme, the three-year lock means:

  • unbond is not allowed until the period is over

The lock applies to the entire address.

Block Reward Calculation Formula:

Price ^ (1/4) * 350 * 3

Price Examples:

  • Price = $0.001, reward = 187 BIP

The DAO and the Team will still be each receiving a 10-percent tax on the new BIPs mined and transaction fees collected. This tax will be applied to the base amount of block rewards, and not their threefold product. The validator fees will also be calculated using base rewards from stakes.

The test Toronet was launched on March 29. Everyone is welcome to join and try the new mechanics!

Follow our Telegram channel to stay updated on all the key news & announcements and feel free to join our group.

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Supporting development and adoption of Minter, a digital assets marketplace powered by a fast blockchain. Other social media: minter.org/#follow

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Minter

Supporting development and adoption of Minter, a digital assets marketplace powered by a fast blockchain. Other social media: minter.org/#follow