When discussing with our partners, PwC, DNV GL and some other prominent entities, within the Apotheosis process it was understood that the economic model was amongst the most pivotal portions of VeChain Thor. This model will dictate the longevity, stability, and interest the project will garner. It is for these reasons the development took numerous phases of discussion, and hundreds of hours of testing, to make sure our model met the needs of our current and future stakeholders.
It was a unanimous decision that a two-coin system provided the Foundation the flexibility to create both a store of value, to be used as smart payment currency, and the appropriate means of managing the costs of using the VeChain Thor protocol.
We believe our smart contract protocol will liberate many of the barriers currently existing in the modern world and with that task it as our priority to empower EVERYONE that uses our platform. It is precisely this mindset and worldview that leads us to the name Thor, a Norse God who empowers and protects his people. The power of Thor comes from the energy that he exudes as the God of Thunder. Thor is a symbol of might, power, justice and trust and it is only fitting that our second coin is named after the power he uses to be that change.
It is with great honor we present to you VeChain THOR POWER and the economic model that powers the VeChain Thor protocol.
SECTION 1: INTRODUCTION TO VECHAIN THOR POWER
The basic principle for designing this model is to prevent transaction fees from being directly exposed to the volatility in price of VeChain tokens (VET), making the VeChain Thor blockchain more suitable for conducting business/financial activities for both ordinary, enterprise, and government users.
It means no matter how high the value of VET becomes in the near future, our ecosystem will still function as intended.
In our model, we designed two types of digital tokens to facilitate activities at both levels, named VET and THOR POWER.
The function of the VET is to serve as the intermedium of value, or in other words, smart payment currency, to enable rapid value circulation within the ecosystem based on the VeChain Blockchain.
On the other hand, the THOR Power represents the underlying cost of using the VeChain Blockchain and will be consumed (proportionally burnt) after certain blockchain operations are performed, such as transferring VET and executing smart contracts.
The valuation of VET has two pillars to support it.
Firstly, VET represents the right and privilege to occupy and use the public Blockchain resources of VeChain Thor. Whoever holds more VET means the holder inherits more rights and higher priority to use VeChain Thor Blockchain that will be linked to THOR POWER.
In other words, whoever is holding VET will be given THOR Power to use VeChain as long as the Thor Power required to perform such tasks is less than the Thor Power available in their balance. (e.g., running an applications and smart contracts hosted on VeChain Blockchain).
Secondly, VET is the smart payment currency to carry out the economic and business activities running on VeChain Thor Blockchain. The total business volume contributes a critical portion of total valuation of entire VET circulation.
SECTION 2: BASE GENERATION RATE FOR THOR POWER PER VET HELD
Taken both the cumulation of current business partner usage, VeChain Thor Blockchain capacity, and the THOR Power consumption of transaction executions and other factors into consideration, the base generation rate of THOR Power generation speed is mandated to be:
0.00042 THOR Power per VET per Day;
Approximately 0.15 THOR Power per VET per Year;
To generate 1 THOR Power per day requires approximately 2,381 VET.
Please be noted that, this is the lowest THOR Power base generation rate as predetermined based on the factors mentioned above. The VeChain Foundation with the help of automated algorithms from our technology team, will closely monitor the usage and status of the VeChain Thor blockchain and to balance the VeChain ecosystem. At the same time, those figures and indicators will be shown in the VeChain Blockchain Explorer on a real time basis.
If needed, the Foundation shall initiate voting to re-adjust the base generation rate, and all node holders have one vote for re-adjusting the THOR Power base generation rate. Detailed information will be released together with full VeChain Economic Paper upon completion.
Considering the vital role enterprise users and smart contract owners play in our blockchain platform, and that we highly encourage them to adopt VeChain Thor Blockchain and integrate it into real business use cases, the THOR Power generated by a portion of VET possessed by the Foundation will be rewarded to them to facilitate the adoption and integration in the early stage.
SECTION 3: THOR POWER REWARDS TO EVERYONE!
With VeChain undergoing its next stage in its evolution it is imperative for our brand to grow with it, and grant power to all our VET holders, we introduced three reward structures to be implemented in VeChain Thor.
Reward 1: ALL VET generate THOR Power at a predetermined speed;
Reward 2: 30% of all THOR Power consumed by transactions on blockchain will be rewarded to 101 Authority nodes, i.e. Thrudheim Masternodes; and the remaining 70% will be burned;
Reward 3: VeChain Foundation will allocate a significant portion of THOR Power generated to distribute to all node holders to initiate the chain.
As the original intention of setting up the Rewards structure is to grant Power to all VET holders, mostly, individual token holders. Hence, to begin 2018, the Foundation decided to allocate 150 million VET possessed by Foundation into THOR Power Reward Pool. All THOR Power generated from the Pool will be used to reward VeChain Node holders. The allocated VET in THOR Power Reward Pool reduces by 25 million every 6 months, until further notice after 2019*.
Regarding heavy blockchain resource users, such as enterprises and smart contract owners, they will have to use enough THOR Power to accomplish the payment, smart contract execution and operation needs.
As VeChain ecosystem becomes more mature, there will be multiple methods for Enterprises and smart contract owners to acquire THOR Power to acquire services on VeChain Thor, such as borrowing and utilizing THOR Power Futures to secure current positioning, etc.
Who is eligible for these rewards?
All VET Holders with VET stored in VeChain wallets （After mainnet launch）are eligible for receiving Reward 1;
All 3 types of Economic Nodes (Mjolnir Masternodes, Thunder Nodes, and Strength Nodes) are eligible for Reward 1 and Reward 3;
101 Authority Nodes (Thrudheim Masternodes) are eligible for Reward 1, Reward 2 and Reward 3！
How much THOR Power will VET holders receive?
B = Base THOR Power generation rate for 1 VET held (0.00042 THOR Power a day);
FR = Amount of VET distributed from the Foundation Reward Pool (150 million VET);
F = Amount of THOR Power the Foundation Reward Pool generates per Day (150 million VET x 0.00042 = 63,000 THOR Power);
A = Number of Authority Node designated VET (101 nodes x 250,000 = 25,250,000 VET);
M = Number of Mjolnir Masternodes designated VET (variable);
T = Number of Thunder nodes designated VET (variable);
S = Number of Strength nodes designated VET (variable);
NB = BASE reward generation rate for all Nodes.
Economic Nodes extra Thor reward formula , F, M, T, S is known, Solve for NB
F =(ANB(1+100%))+ (MNB(1+100%)) + (TNB(1+50%)) + (SNB(1+0%)).
Confused? Here’s an Example A
Given the condition that Foundation allocates 150 million VET to generate THOR Power for Node Holders. Due to the varying nature of M, T, and S the following are ASSUMED numbers based on educated calculations.
F = 63,000 THOR Power generated by 150 million Foundation VET Daily;
A = 25,250,000 VET (101 Authority Nodes on chain, at 250,000 VET per node);
M = 100,000,000 VET (667 Qualified Mjolnir Nodes on chain, at 150,000 VET per node);
T = 80,000,000 VET (1600 Qualified Thunder Nodes on chain, at 50,000 VET per node);
S = 50,000,000 VET (5000 Qualified Strength Nodes on chain, at 10,000 VET per node);
NB ~= 0.00015 THOR Power per VET a day.
Under Example A : Thrudheim Masternode THOR Power Generation Rate
0.00042+(0.00015200%) = 0.000720 THOR Power per VET a day or 0.2628 per Year;
An increase of +75.2% THOR Power Generation rate compared to Non-Node Holders, Authority Masternodes will have additional rewards;
The base 250,000 VET will amount to 65,700 THOR Power a year PLUS 30% of all THOR Power consumed by transactions on blockchain!
Under Example A : Mjolnir Masternode THOR Power Generation Rate
0.00042+(0.00015200%) = 0.000720 THOR Power per VET a day or 0.2628 Per Year;
An increase of +75.2% THOR Power Generation rate compared to None-Node Holders;
The base 150,000 VET will amount to 39,420 Thor Power a year!
Under Example A : Thunder Node THOR Power Generation Rate
0.00042+(0.00015150%) = 0.000645 THOR Power per VET a day or 0.23542 per Year.
An increase of +57.0% THOR Power Generation rate compared to None-Node Holders;
The base 50,000 will amount to 11,771 THOR Power a year!
Under Example A : Strength Node THOR Power Generation Rate
0.00042+(0.00015100%) = 0.000570 THOR Power per VET a day or 0.20805 per Year;
An increase of +38.7% THOR Power Generation rate compared to None-Node Holders;
The base 10,000 VET will amount to 2,080.50 THOR Power a year!
Please be noted that Thunder Nodes and Strength Nodes can be upgraded to Mjolnir Masternodes under certain conditions, including accumulating enough VET, Node Maturity Period (will introduce later), community related simple tasks, etc.
SECTION 4: NODE MATURITY PERIOD
“Node Maturity Period” is a term used in the VeChain ecosystem, meaning once a wallet has the amount needed to qualify for a certain node and the corresponding amount stored in ‘THOR Power Forge’, the built-in function in VeChain wallet, then the Node Maturity Period starts to count.
When the maturity period ends, and the quantity of VET stored in ‘THOR Power Forge’ does not drop below the threshold at any given moment, then the node status will be officially designated, and the node reward will start to generate.
Maturity Periods Start Date & Required VET Amount
Thrudheim Masternodes Maturity Period: From 21st Dec 2017 to the date VeChain Thor Blockchain mainnet launch; Requires minimum 250,000 VET;
Mjolnir Masternodes Maturity Period: 30 Days after VeChain Thor Blockchain mainnet launch; Requires minimum 150,000 VET;
Thunder Nodes Maturity Period: 20 Days after VeChain Thor Blockchain mainnet launch; Requires minimum 50,000 VET;
Strength Nodes Maturity Period: 10 Days after to VeChain Thor Blockchain mainnet launch; Requires minimum 10,000 VET;
Confused? Here’s an example
Tony has 8,000 VET in his VeChain wallet and he decides to buy 2,000 additional ones. Once he properly deposits all his 10,000 VET in the ‘THOR Power Forge’, the built-in function in VeChain wallet, the maturity period will start counting. 10 days after that, Tony’s VeChain wallet address becomes a full Strength Nodes and will be eligible for Strength Node Rewards given by the Foundation.
SECTION 5: LIMITATIONS
The theme for THOR is “Power to the People”, we want to empower EVERYONE within our community as much as possible. We would also like to try our best to distribute the Foundation generated rewards to as many people who make up the community as possible.
For this reason, the Foundation has decided that the wallets holding 1 million VET and above, require you to contribute the VeChain community in various ways before we deem you a qualified Mjolnir Masternode to receive Foundation allocated rewards. Details will be released prior to mainnet launch.
Otherwise, the THOR Power generated by those wallets will be donated back to the Foundation’s THOR Power Pool and distributed to other VET holders.
If you hold between 150,000 and 1 million VET you will automatically become a Mjolnir Masternode holder after the maturity period, extra reward will start to accumulate at the moment of the end of Node Maturity Period.
- VeChain Foundation reserves the right to adjust the amount after 2019.12.31.
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