Focus on decentralization – Waves platform introduces new monetary policy

The developers of the Waves blockchain platform announced the need to take another step towards sustainable growth and financial stability, the essence of which is to update the existing economic model.

In a broader sense, representatives of Waves argue , the cryptocurrency sphere should become a full-fledged economy, and not existing with donations.

According to them, today there is a trend of deficit of WAVES tokens, since their number in circulation is limited. Using the Proof of Stake consensus algorithm leads to the withdrawal of a certain amount of WAVES from circulation. In addition, tokens are blocked as a result of leasing, and the soon appearance of sidechains will lead to the blocking of even more tokens.

“We recognize that there are different opinions about the impact of the amount of money in circulation on the economy. The number of WAVES tokens was determined in a centralized way at the platform launch and is unchanged. The community can develop any applications and user cases (and we only support it), taking advantage of the economic viability of the platform. And yet it does not have control over the number of tokens in circulation, on which the platform’s economy depends, ”Waves said.

To solve existing problems, the project team considers it necessary to introduce a decentralized monetary policy under the control of the community. For this, functionality is proposed that provides a new approach to the issue of tokens and supports transparent and collective decision-making.

Block reward

One of the steps towards financial stability is the introduction of remuneration for block generators for each block created. As Waves expects, the reward will increase interest in token leasing, attract new block creators (new nodes), and increase demand for WAVES.

It is emphasized that, unlike the Proof of Work consensus algorithm, the Waves Proof of Stake consensus algorithm does not require expensive equipment: it is enough to have a computer with a dual-core processor, 4 GB RAM and a hard disk capacity of 50 GB (SSD).

“We expect that most of the funds received as a reward for creating blocks will be used for leasing. Since block generators do not need to maintain expensive equipment, they will prefer to increase the steak, thereby increasing the chances of creating a block. If the Proof of Work block generators strive for powerful equipment, it is more important for WAVES to have a larger steak, ”the developers say.

To make the generation of WAVES blocks more attractive, a reward of 6 WAVES for each created block is proposed, which corresponds to the previously promised target annual income of about 5.3% (in WAVES), provided that the generating balance increases and the block reward we offer does not change. However, in order to make the platform more democratic and community driven, Waves introduces a decentralized monetary policy: the amount of remuneration for creating blocks will be determined by the community through voting.

“This procedure will be to some extent the decentralized equivalent of the central bank deciding on the size of the key rate. The only difference is that the procedure is completely decentralized and controlled by the community, and not by the regulator, ”the platform said.

WAVES block generators will be able to change the size of the reward. The established size will be valid for 100,000 blocks, which approximately corresponds to 69 days. The last 10,000 blocks from this period – or, approximately, a week – the voting period for the amount of remuneration in the next period.

During the voting period, block generators can offer a higher or lower remuneration or leave it unchanged by writing its value to all created blocks. The reward change step is 0.5 WAVES. To increase or decrease remuneration, more than 50% of all block generators must vote for this. Otherwise, the remuneration will remain unchanged during the next period.

Recall that earlier, with the support of the Waves project, we prepared a special project on Web 3.0 – the next stage in the technical and social evolution of the World Wide Web.

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