CHRONOBANK - PHASE 1: A NON-VOLATILE DIGITAL TOKEN BACKED BY LABOUR-HOURS 3 All TIME tokens purchased during the crowdsale will constitute 88% of the total TIME tokens generated during the initialisation of the ChronoBank system. The remaining 12% of tokens will be split with 10% given to the ChronoBank.io team (for ongoing research and development) and 2% to advisors and early adopters of the system. claim rewards. Withdrawing TIME tokens from the contract will also withdraw any rewards currently owed to the depositor. TIME holders may also leave their tokens deposited in the rewards contract indefinitely and claim their rewards periodically. Figure 2. Issuance fees (fi) and transaction fees (ft) are deposited into the rewards contract. TIME holders can withdraw a portion of the LHT after each snapshot, if their TIME tokens were deposited into the contract. 2.1.2. TIME Token Rewards For the use of the LHT, users will be charged a fixed fee, ft = 0.15% on all transactions. Complementary to transaction fees, issuance fees (fi) will be taken during the minting process (further details in Section 2.2.1). The issuance fees will start at 3% during the first year of operation and will stepwise decrease by 1% each year until a final issuance fee of 1% is achieved and maintained. Both the transaction and issuance fees will be automatically collected and sent to a rewards contract on the Ethereum blockchain as shown in Figure 2. The rewards contract is designed such that TIME token holders can withdraw their earned rewards in a manner that makes them non-unique (i.e. withdrawal of rewards is not tracked on a per-token basis) and hence tradeable on exchanges for equal value. The rewards contract will allow TIME token holders to retrieve their rewards at regular payout intervals, P. At any given stage, TIME holders may deposit their tokens into the rewards contract. At the onset of a payout interval, a snapshot of deposited TIME tokens and the current contract reward balance will be taken1. The rewards will be divided equally among the TIME tokens that were deposited at the time of the snapshot. Depositors may then withdraw their share of rewards during the following payout interval. At the next payout snapshot, any unclaimed rewards will be forfeited and added to the total balance of that snapshot. Figure 3 illustrates this concept by plotting the rewards contract balance over time. We also note that we expect P to be of the order of a few months. TIME holders may deposit and withdraw their TIME tokens at any stage, however only TIME holders who have deposited before the snapshot of each payout interval can Figure 3. The rewards contract receives Pr rewards for every payout interval P (in our example, we assume that Pr is constant). At each snapshot, the portion of rewards that are not withdrawn is d. Rewards that are not withdrawn roll over to the following payout interval P. The dashed line indicates the withdrawable balance, which reduce over each payout interval as TIME holders withdraw their rewards. This reward payout system gives upper bounds to the amount of rewards that can be stored in the contract in any interval, under some reasonable assumptions. The total rewards obtained via fees for a particular payout interval, P, is Pr. If we assume a constant amount of transaction and issuance fees per payout interval (i.e. a constant Pr), and an average percentage of locked TIME holders that do not withdraw in any payout interval, d, we can calculate the upper bound of the LHT stored in the smart contract through the limiting geometric series relation2: ∞ k=0 Prdk = Pr(1 − d)−1 . (1) To clarify this, let us take a conservative estimate, that 90% of all locked TIME token holders do not withdraw their rewards in every payout interval (only 10% actually withdraw). In this scenario, no more than 10Pr worth of rewards will be stored in the rewards contract at any given time. A less conservative estimate, being 50% of locked TIME holders withdrawing each payout interval, will ensure the rewards contract never contains more than 2Pr worth of rewards. Through the careful (and potentially dynamic) choice of P we can find a balance between practicality (frequency of reward withdrawal) and security (safe level of stored value in a smart contract). 2.1.3. TIME Voting From time to time, the CBE may hold polls on the Ethereum blockchain to elicit the opinion of TIME token holders. Poll results will be incorporated into decisions made by the CBE concerning the financial or technical 1The transaction for which may be initiated by anyone, but typically by the CBE. 2Assuming 0 ≤ d < 1.
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