Staking is a way of providing consensus more efficient than mining, it's consider the future consensus mechanisms for most public blockchains and although it has some problems, like hoarding, some of them are using it right now (Cardano, EOS, NEO, Bitconnect, Pivx).
In the financial world whenever you give up the opportunity of using your money they give you an asset in exchange representing that money you gave up so you can trade this asset in secondary markets, for example, when you buy debt from a country they give you a bond representing the debt that is owed to you.
We are bringing this idea to staking in Ethereum (Testnet), it's a really logical step that has never been proposed in any blockchain before, it will provide liquidity to your staking asset and increase the cash-flow.
The process is simple and seamless, you just send your ether to a smart contract, the same way you would if you were to do regular staking, but unlike traditional staking we give you a token for each wei which represents the ownership of that wei(The ether token ratio can be adjusted in the future). The wei gets locked in an "escrow like" way on the smart contract, and you can get them back at any point in time by just sending back the tokens, in the meantime you are getting all the profits of the stake that your ether is generating in the contract.
This not only gives you cash flow to your locked ether, but it also creates a safer and more stable token that can be used in a community in a more logical way than a regular ERC20 token.
- Regular ICO ERC20 token This kind of token is just a digital representation of a value that the company which created it promises to support.
This kind of token has a number of disadvantages:
- The token is not attached to real value, if the company that created it goes bad the token is worth nothing.
- The token is really volatile since is not attached to anything and it's mostly used for speculation.
- Users payed in this kind of token in a regular manner don't want to hold it, they rather have it in a more stable currency.
- Users don't get any profits from holding this token.
- Lingotts token: ERC223 like token with real value attached to it.
This token fixes, at least in some degree, all of this problems.
- The token is attached to value in ether, if the company crashes you can take your ether back, so it will never be worthless (At the beginning the relation may not be 1 to 1, but if the smart contract works well, the risk will be next to 0 and will be 1 to 1 or really close)
- The token will be less volatile, safer to hold and hence less used for speculation.
- Since the token is more stable and has a minimal value, users can base their income in it without incurring in high risks or exchanging it as soon as they get it.
- You will get the profit generated by staking the associated ether.
To manage all this ecosystem we have designed a governance system by creating a DAO that will be stored and managed completely in the blockchain, one thing to note is that if you want to participate in the DAO you need to go through a Digital Identity system (Uport, Alastria...). All updates are suggested and voted by the community, for example, if a new application, like a betting system inside the marketplace, wants to be added to the platform, a user can make a proposal, and if enough users like and vote the proposal, the application will be added to the system.
We are going to provide a completely new service that will give you cash flow while you stake your ether and creating a new kind of token which users are more incentivised to hold and use for applications instead of just speculating with it, with it's increased used due to network effect within the community, the usefulness of this token will increase and due to money theory this will impact the value of the token.
In our github (https://github.com/nefera606/Lingotts) you can find a working implementation of this system including a DAO for governance and a node API to monitor user information different diagrams explaining the architecture (Still working on those).
This project has been developed during IMAGURU's Blockchain hackaton (With Minsk and Madrid participants). We consider this to be a great idea, in our group this is the first time we meet most of each other in person, some of us were in contact before today, but we met new members here that were interested on our idea which was great, the last day we even got a financial VP and a CTO from 2 different international firms to give us their inputs, one of them suggested that this kind of token would have more intrinsic value than the ether asociated to it. We want to thank Anatoli Babenia (@abitrolly) and Nastia Khamiankova (@imgurublockchain) for coordinating the Spanish side of the blockchain hackaton and provided help at every step of the way; thanks to Jesús Herencia and Jori Armbruster for mentoring the people in Madrid.
Most of the team met each other with the objective to participate on this hackaton.
- Enrique Alcázar: Blockchain/Backend developer with experience in Solidity, Quorum, Hyperledger, Node, Java, .Net... https://www.linkedin.com/in/enrique-alcazar/
- Iñigo Garcia: Blockchain engineer with experience in Solidity, Quorum, Hyperledger, Node, Angular, IoT, Electronics and blockchain based solutions. www.linkedin.com/in/igarciademataingeniero/
- Jaime Durán: Entrepreneur and financial advisor, with experience in investment banking and business plans that rock.
- Jose Antonio Fernandez: Industrial and electronic engineering, designer of power plants control architecture, blockchain enthusiast and cryptocurrency investor.
- Jorge Martín Jiménez: Computer and Network Administrator System, entrepreneur, founder, blockchain enthusiast, cryptocurrency investor and business angel. https://www.linkedin.com/in/jorgemartinfreelance/
- Alicia Lombarte García: Computer science and engineering Major and Business Administration Major.
ether : 0x03Eb8F20f063add818DA0D2A5A3D9f57E983704B
btc : 1LVRktKUzkXWepn5t9KsMfACiaDt9eXj4o