A new digital asset issuance based on data value
Writer: Lambda founder
Editor: Lambda
We will introduce the evolution of digital asset issuance, during a decade of blockchain industry development at first. And then, explain the new way for digital asset issuance on the Lambda mainnet.
On 30th October 2008, a mysterious person named Satoshi Nakamoto published a whitepaper called “A System of Peer to Peer Electronic Cash”. The paper is not only Bitcoin’s blueprint but also announces an emerging asset issuance based on blockchain which entered history. Bitcoin applies to code as a carrier to consolidate the main value of the consensus mechanism for asset issuance. It is very innovative to draw Bitcoin’s reference as a successful story to code-based digital assets of integrating asset issuance, trading, storage, and balance. In addition, Bitcoin is the first case for asset issuance through a mining mechanism.
Digital asset issuance based on mining
Specifically, using the mining-based blockchain asset issuance is a public chain system in general. The mining process must go through the consensus mechanism and add new tokens for snatching transaction verification and the right of bookkeeping. It is the process to distribute and block reward issuance. In the early period of public chain system construction, the purpose is to build a relatively safe computing power defense barrier for the public chain through a mining reward mechanism. Gathering basic network resources, the initial version of the blockchain governance structure, the initial user’s community for ensuring security, decentralized, and basic function on the public chain is running well.
Basically, the blockchain asset issuance based on mining, the mechanism is for distributing and issuance of blockchain block reward reasonably, which mainly involves the block reward safely to distribute for miners and to motivate effective miners to make contributions continuously for the blockchain system safety and also with the full operation.
Blockchain assets based on mining can be divided into two types simply; blockchain assets based on POW and blockchain assets based on staking separately.
Asset issuance based on POW mining
Altcoins in the early stage are assets based on POW. There are coins that came into existence, they claimed to eliminate bitcoin flaws, the typical case is; Litecoin(LTC), Ethereum (ETH), Monero (XMR), Dash(DASH), etc. In a classic POW mining mechanism, one can only get tokens as a mining reward, without a design of pre-mining. So all miners are required to compete with computing, only winners can gain reward and the right of block packing. The strength of POW is fairness. The weakness is of two sides, one side is that a large number of public chain communities have difficulties to expand communities to other groups, except miners groups. So that communities tend to shrink from time to time, the value of tokens is relatively low until it is gone. Another side is that miners will because of their interest to be a mining pool, gathering large power for leading the development of the project.
Asset issuance based on Staking a mining
As many assets issuance based on Staking, POS is the very basic way for asset issuance. The advantage of POS issuance is avoiding waste of huge electronic power on POW mining. The disadvantage is tokens are too centralized, it will be monopoly control. DPOS mechanism and POA mechanism are POS adjustments. These two mechanisms are that power is more centralized on a high degree.
The weakness of digital asset mechanism based on mining mechanism:
- High barrier, required the background of computers and cryptography.
- Low scalability, adjust rule is only one way — -for a fork.
The digital asset issuance mechanism based on ICO and ERC 20
Initial Coin Offering (ICO) is first token issuance, which is referred to as blockchain projects, have their whitepaper or project demo to show investors their project design ideas, developing capability, team’s resume and other necessary information. Before the project is completed, projects offer tokens’ initial offering and sale to raise development funds for the project. The first successful ICO project was MasterCoin, afterward renamed as Omni protocol. In 2014, Ethereum raised 19 million dollars to initiate the project. Ethereum aims to build blockchain public chain 2.0, that is, a distributed application platform based on the smart contracts. The smart contract technology, the standard of ERC 20, and the maturity of DAO have greatly reduced the barrier of digital asset issuance. Any blockchain project can easily issue its own token based on Ethereum, which is also clearance of the final technology barrier before the ICO boom.
In 2017, ICO became extremely popular, and the record of fundraising reached high again and again. In May of this year, the emerging web browser and digital advertising platform Brave raised 35 million dollars worth of ETH tokens with only 30 seconds. After that, communication software developer KIK raised nearly 100 million dollars. As of August 2018, the total amount of funds through ICO raised exceeded 28.3 billion, especially EOS raised over 4.2 billion, and telegram raised over 1.7 billion.
Over the past few years, ICO has accumulated huge bubbles. Since the market became a bear market in 2018, it has already entered the ICO project’s bubble digestion stage.
I think that weaknesses of digital asset issuance based on ICO and ERC 20：
- Although ETH is the digital asset based on mining mechanism, other assets issued on Ethereum without utilizing the computing power of ETH’ miners.
- Assets issued based on ERC 20 can not reward contributors for specific consensus mechanisms.
Due to the weakness above, ERC20 assets have become synonymous with air coins.
Digital assets issuance based on STO
Security Tokens（STO）refers to tokens with securities attributes issued under the supervision of certain laws and regulations that are in compliance and subject to the supervision of securities laws. STO refers to securities issuance and fundraising behavior as a carrier of ST, which combines the carrier of ICO’s token and the attribute of IPO securities issuance. The fundraising issuance embraces the characteristics of ICO and IPO.
STO supporters believe securities tokenize will be widely used in a large number of traditional assets in the next few years. It will use as powerful supplementary form of asset securitization to realize social resources gathering on a large scale, and its superiority is irreplaceable, mainly include:
- Value anchoring, ST has actual assets or equity for value support.
- ST can have 24/7 hours of trading time and global liquidity, which is better than traditional securities.
- Split ownership with a smaller granularity.
- Automatic compliance and fast balance settlement.
- Asset interoperability
From the current practical case, STO’s main problems are:
Blockchain is the outcome of the digital world, STO cannot solve problems of anchoring physical assets and the digital world.
The new digital asset issuance based on data value mining mechanism
Today, we propose a digital asset issuance agreement based on Lambda mainnet, Lambda X protocol.
The issued assets have following characteristics:
1. Digital assets are produced through mining. Gaining digital assets should pay the cost. In this case, newly issued digital assets have the value of resources such as BTC and MXR.
2. Mining groups is defined directly as valuable data sets, such as various mining groups from genetic data mining, weather data mining, etc. That directly supports and crosses with the commercial application and digital assets.
3. Based on Lambda mainnet — — -storage space where specific data is stored can generate a new token corresponding to LAMB native coin with a specific data set within a specific time.
4. Lambda various storage commercial applications can live through Lambda mainnet. It is meaningful application assets interoperated in the blockchain industry.
5. Sharing the Lambda consensus network and storage computing power is different from the Polkadot and Cosmos sub-chain models, which greatly reduces the costs of independent assets and sub-chains.
We mentioned above that Lambda mainnet will evolve into a new infrastructure for data storage, data transactions, asset issuance, and asset interoperability. By creating a storage trading market, issuing assets, and mining parameter settings on the Lambda chain, you can start an independent economic ecosystem based on storage computing power that supports business, providing basic resources and economic circulation for your business development and motivation.
It will combine advantages of multiple digital asset issuance mechanisms — -it not only has the fairness and participation based on mining issuance, but also has the convenience of issuing digital assets based on ERC20 and ICO. In addition, it will also realize the commercial value of data to empower digital assets, thereby solving main problems in today’s digital asset issuance methods.
