Firo Tokenomics Discussion with upcoming Halving

Community Feedback
42

If we talking about price, it will never finish. After firo price go up and what the next ? Too many people wanna take profit and just profit and then leave. They didn’t see something big in the future for long term. Let to make firo will be Pioner of privacy in the future. We do the best for new era of privacy. For now firo is nothing, but in the future firo privacy is everything.

I’m sure people will see and need what firo has and the price of firo will rise along with how much more people will use firo’s privacy technology features in the future.

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43

Without talking about the price, firo has maintained this price, and after halving it, how does the team maintain the status quo? The team will fall apart, and firo will only die

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44

With the halving schedule re-evaluated, I think it’s definitely fair to say the industry has changed. Something more gradual than every 4years, especially as other projects steer away from this, does make sense. It doesn’t seem uncommon for people to overlook things like fixed supply for the speculative value of an ongoing, developing project. Just different propositions of value.

With block division, it feels like, at least for now, developer allocation should be higher. It requires very specialized expertise that’s hard to replace, and the market conditions aren’t the most favorable right now. Whether that comes from the community fund, or 2.5% cut from miners and master nodes, I’m not sure. However, the allocation, in my mind, does change depending on market conditions, but that is maybe a separate discussion.

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45

I think getting Spats out with assets so there are the options of USD and other currency stable coins with privacy by default will be a killer app feature to bring others to the ecosystem. Then imo we can make more of a case for maintenance mode. I am for maintaining or having a slightly more increase to the devs from miners, masternodes, and community funds so the devs can have the resources to put of Spats and Hellsing (private masternodes).

I am for Hashcloak to run simulations so the community and team can make a more informed choice with regards to different scenarios of tokenomics.

As far as security of the network with tail emissions are concerned, can a small miner device such as a Nerdminer V2 be outfitted to mine to a public open source pool maintained by the team, other individuals, and others to spread the hashrate around? That could be something to look at since those devices are low wattage and easy to use. Just connect to the wifi and input a wallet address with the default pool being an open source solo mining pool. Of course can provide menu options for those wanting to do true solo mining where it is possible to connect to their own firo node.

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46

I love the topics but i’m not an expert. What i can say is i like the idea of tail emission and expandable block size similar to how Monero does it.

And as mentioned by others my concern is the price and adoption of Firo.
The team has done amazing work considering the Firo budget and man power. But still price does not reflect the awesome Firo tech and everything that has been done.
It feels like we need a NFT division and a hype machine to pump (yes pump) the price. Sadly without price rise people wont join. Many other projects with great fundamental suffer from same situation.
Open for other ideas …

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47 
60% Masternodes
15% Miners
20% Dev reward
5% Community Fund

or

55% Masternodes
15% Miners
20% Dev reward
10% Community Fund

1. What should the block division be after the halving?
I took a lot of days to think about it and for the %, I really like nrsimha proposal. It would be soooooo sad if Firo would move to a maintenance mode only… Im very pround of what the team made in the last years even with a low budget : lelantus spark, exchange addresses, etc. All that would have been impossible without the dev fund.

2. Should the existing halving schedule be maintained or should it be relooked at?
3. Whether we should consider adopting a tail emission with/without dynamic blocks
This is really hard to answer. Maybe move to a more gradual reduction of supply? “Halving concept” was hot 15 years ago but not so sure now. I dont think ive enough knowledge on the subject.

To conclude, I really hope that dev rewards and community fund are here to stay. I really want to see Spats, Curve Trees, mining//masternode rewards directly to Spark, etc. We have been talking of Elysian since years now. It would be a shame to not have it with Spats now that Lelantus Spark is done :slight_smile:

Thanks for being here Ruben and the team.

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48

One way to balance keeping core development funded while making sure that if Firo maintains a certain average price over a certain period (let’s say 6 months), then core will commit to do a hard fork to reduce the development fund and redistribute it proportionately to the miners/masternodes/community fund.

This gives incentives for the community to also support the price increase without feeling that core is being enriched by it (which is never the intention).

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49

@Mikerah

Some of the questions that are running through my mind that may be applicable for the audit are:

  1. How do various changes in block rewards distribution affect the security and the price of Firo?
  2. What is the impact of masternode numbers on the security of the network?
  3. The impact of halvings vs more gradual supply emission reductions
  4. The long term viability of a hybrid masternode + PoW model with the halving model and more gradual supply emission models.
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50

I think we shouldnt make thing too complicated… If the firo goes high, then, core team will accumulate some funds for the future, I dont see this as a problem. Its a lot better than the current situation. If that happen, it would give us opportunity. IMO, there is no need to commit to hard fork and things like that…

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51

I’ve been thinking about this for awhile - and figured I should weigh in now.

To me - the main reason why Firo still exists, is the Dev team is so good, and Firo is taking a leading-edge position in the development of privacy cryptocurrency technology - so we need to continue to give the team as much as we can to continue developing the roadmap - at a minimum Spats and hopefully Spark support for mining and Master Node payments. This means with the block rewards halving - the Dev fund percentage should increase to make up part of the difference.

I’ve spent time and effort over the past 6-7 years to help the Firo project and I currently mine and run Master Nodes to secure the Firo network. This is because I believe in what Firo is trying to do - basically do what Bitcoin has failed to do - which is to create an anonymous secure privacy focused low cost peer-to-peer cryptocurrency.

I think having HashCloak do an analysis is a very good idea - during the past halving there was a lot of speculation as to what ‘may’ happen with specific changes in the Firo tokenomic allotments. If HashCloak is using historical Firo/Zcoin data in their analysis they need to factor in that during the past halving a seed investor was dumping Firo continuously for about 2 years (now complete) and for the past year there has been a sell wall on the major exchange (Binance) suppressing prices until recently. Changes to the tokenomics during the last halving seemed to have little or no effect on Firo’s price - but this may have been due to the interference caused by the seed investor.

Addressing Reuben’s points:

  1. What should the block division be after the halving?

Current block allocations:

50% Masternodes
25% Miners
15% Dev reward
10% Community Fund

Block allocations after halving:

50% Masternodes
20% Miners
25% Dev reward
5% Community Fund

Reduce Miner and Community Fund rewards each by 5% and increase Dev reward by 10% - keep Masternodes at 50%.

Rationale: This will minimize the impact to the dev fund and allow current work to continue. Miners and Masternodes will adjust as they always do, and the Community fund will have to save up for projects that are really worthy of being funded.

  1. Should the existing halving schedule be maintained or should it be relooked at?

Personally I think we should have maybe 1 more halving and then switch to tail-emissions - but let’s see what HashCloak’s analysis comes up with.

  1. Whether we should consider adopting a tail emission with/without dynamic blocks

I’ve been thinking for quite awhile that tail-emissions (similar to Monero) would be a good idea. It would keep the network more stable and secure knowing that miners and masternodes will get consistent payments. (Nobody really questions Monero about having tail-emissions).
Implementing Dynamic blocks will prevent problems before they happen - we really want to keep the Firo network working smoothly without issues as the number of transactions increase over the years (this was one of the things they did wrong with Bitcoin - not increasing blocksize - and fees have gone wild).

Looking forward to see what Hashcloak’s analysis shows (I may post again depending on what they come up with).

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52

Weird idea, but throwing it out here anyway.
When the main goal is to keep the team going, without dipping into community fund etc:
As it is now, team needs aprox $1.90 per block
with firo price being the big unknown and volatile at times, wouldnt it be easier to deduct this value (converted to firo at current marketrate) from whatever the total blockreward is at that moment and devide what is left to MNs, miners and CF

So right now total block reward is 6.25 firo
dev team takes its $1.90 cut, current marketprice of Firo is 1.83, so thats 1.04 firo
remaining block reward of 6.25 minus 1.04 = 5.21 gets distributed following a fixed ratio of lets say 65% MN, 25% miners and 10% CF

So while the ratios are still fixed, the amount of firo left to distribute after dev fee is dynamic

53

Hey Everyone,

Here’s a detailed plan that we want to undertake for the economic audit. Please let us know what you’d want to see and want kind of questions it’ll help the Firo community answer:

We will be doing simulations of the following:

  • Show Firo’s issuance over several scenarios
    • Keep current issuance params + split params
      • 50% Masternodes
      • 25% Miners
      • 15% Dev reward
      • 10% community fund
    • Keep current issuance params + consider the following split params:
      • Scenario 1 (Rasikh):
        • 50% Masternodes
        • 25% Miners
        • 20% Dev reward
        • 5% Community fund
      • Scenario 2 (FiroFan):
        • 50% Masternodes
        • 20% Miners
        • 25% Dev reward
        • 5% Community fund
      • Scenario 3 (Mohammad):
        • 50% Masternodes
        • 25% Miners
        • 5% Dev reward
        • 20% Community fund
      • Scenario 4 (rehrar):
        • 47.5% Masternodes
        • 22.5% Miners
        • 20% Dev reward
        • 10% Community fund
      • Scenario 5 (nrsimha):
        • 60% Masternodes
        • 15% Miners
        • 20% Dev reward
        • 5% Community Fund
      • Scenario 6 (nrsimha):
        • 55% Masternodes
        • 15% Miners
        • 20% Dev reward
        • 10% Community Fund
      • Scenario 7 (Zen):
        • 65% Masternodes
        • 50% Miners
        • 10% Dev reward
        • 5% Community fund
      • Scenario 8 (Zen):
        • 70% Masternodes
        • 20% Miners
        • 10% Dev reward
        • 0% Community Fund
    • Keep current issuance the same + consider above split params + consider
      • Tail emissions w/o dynamic blocks
      • Tail emissions with dynamic blocks
    • Change the current issuance schedule but with the above configurations:
      • 5 years
      • 10 years
      • 50 years
    • Remove halving altogether and consider 50 year gradual emissions similar to Wownero

In order to achieve the simulations above, we will be using historical Firo data and time series analysis to show what the Dev and Community funds might look like over a long period of time, in addition to rewards to Masternodes and Miners.
We plan on open sourcing our analysis alongside a report to the Firo community as our deliverables.

Please let us know what you think. We look forward to working with the Firo community on this.

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54

What kind of data can we glean from this simulations beyond the amounts in Dev and Community funds? What sort of actionable information would we gain from such simulations is my question.

55

I think exchanges hold most of the masternodes thus keeping a constant selling pressure on the token price.
I would lower the masternodes distribution to 30%.

56

There is no evidence of this as the large addresses belonging to exchanges which are holding Firo are not doing it in 1000 chunks so cannot host masternodes.

57

By definition, a masternode does not create selling pressure since the Firos are blocked.
It is the blocking of these Firos which removes them from the market and which creates, on the contrary, a scarcity of sales and therefore positive pressure for FIRO price : this is why increasing masternodes remuneration is a means to increase FIRO price.

58

Here is a general, balanced proposed reward distribution for blocks, taking into account important aspects of the economy:

  • Masternodes: 40% - Providing an attractive share for Masternodes, encouraging long-term commitment and enhancing network stability.

  • Miners: 30% - Ensuring competitive rewards for miners, incentivizing continued activity in block mining.

  • Dev reward: 20% - Allocating resources for project development, maintenance, and enhancement by the development team.

  • Community Fund: 10% - Establishing a fund to support community initiatives, partnerships, and ecosystem development, giving the community the opportunity to influence the project.

This proposed distribution aims to encourage different stakeholder groups to engage in the Firo project, maintaining a balance between short-term benefits and long-term stability and coin value growth. Ultimately, the final distribution should arise from community discussions and be tailored to the specific goals and requirements of the project.

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59

Was this ChatGPT?

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60

I commissioned the translation to ensure that it would be as clear as possible, because I would not be able to describe it here any better than he did. Nevertheless, I would still distribute the awards this way.

61

A gradual reduction in block rewards instead of a halving would be something I would approve of, however I do believe the direction has to change somewhat. Ensuring our coins message is getting out to the masses is I believe, just as important as development. This is something I believe we have fallen far short.

The two go hand in hand. One should in theory always help the other. The more people aware, the higher the price should be if the tech is good. The higher the price, the more funds the dev team will have. There should always be a budget allocation to marketing, marketing should be focused on areas where privacy enthusiasts are mostly likely to see. On tokenomics, maybe a 5% reduction to the miners reward and reallocate this to the dev team while important work is undertaken but as a result the CFC reward is not aloud to be used for development etc. Only for coin image, marketing, market making etc. Collating what marketing campaigns have been effective and what hasn’t been and adjusting on that but no matter what always being there.

. We can have the best tech, but we can’t rely on people finding us, the cryptocurrency market has changed to what it was a few years ago. Now firo is drowned out amongst the crowd of over a 1000 cryptocurrency projects with any meaningful market cap. This is where I think we have lagged and is the main reason the price is where the price is. Our major centralised exchange is Binance, how many other coins are now on binance? Currently, we are one of the lowest market caps on Binance. Tech is always evolving, we cannot risk becoming obsolete because we have taken little to no steps to improve our market cap through exposure.

How are projects with little value on the tech side doing so well? Are they effectively just focusing all their resources on promoting their coin? Has it been effective for them? I see this for a lot of the projects.

This is where I believe there should be a self reflection point for the project, this is where the direction change should come from in my opinion.

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