A Complete Guide To The Value of Mana ($KOIN)

Note: I am not a financial advisor and this is not financial advice. I have nothing to sell you.

If you’ve been following me this whole week, I’ve been trying to provide as much knowledge about Koinos as I can to people just like you. Here’s a list of those documents here:

  1. The Ultimate Guide to Koinos
  2. In Depth Guide to $KOIN and $VHP
  3. The Structure and Foundation of the Current Koinos Ecosystem (April 2023)
  4. BONUS: The Ultimate Guide to Koinos Account Protocol (KAP)

In this post, Im going to share why I believe Mana is one of the most important evolutions to blockchain development in recent years. Not only will I explain what Mana is in great detail, I’ll also explain the system that makes it extremely user friendly and why it offers the best web2 like experience in web3.

Mana is a property of the $KOIN token and it has no relationship with the decentraland token known as $MANA. The name Mana is taken from the common concept in video games where players have a renewable energy source that powers their character’s unique abilities. We often see this as the ability to cast spells in games like Diablo, or the ability to recover health after getting shot in games like Call of Duty and so forth.

For Koinos, the character is you, and your ability, is interacting with the Koinos Blockchain.

The Energy Concept
When trying to conceptually understand Mana, it makes sense to start with gas fees because its a more familiar concept.

Gas fees on blockchains are conceptually similar to gas in a typical gasoline powered car. At some point the car will run out of gas and it will need to be refueled. Even if car owners could produce their own gas, there will always be a point where gas will be fully depleted. Similarly, users will always seek to replenish their token supply so they can continuously use the blockchain.

Gas is non-renewable energy while Mana is always renewable

Mana on the other hand is a renewable resource because it is programmed to b regenerative. It is similar to having a battery + charger that is powered by wind, solar or geothermal. It is a fully self sustainable unit.

If we go back to our car analogy and replaced the gasoline powered car with an electric Tesla that was also equipped with its own solar panel generators, than you could always recharge your Tesla and effectively drive forever, so as long as you spent enough time recharging. We’ll cover exactly what happens when you run out of Mana in the technical discussion part. But in short, when you run out of Mana, you must sit and wait until it recharges, just like your hypothetical Tesla with built in solar panel and charger.

Accessing Mana
There are two ways to access Mana, both of which I will discuss in great detail. The the most direct method is holding $KOIN directly and the indirect method is through Mana sharing.

Holding $KOIN
When you hold $KOIN you automatically have access to Mana. There is no thinking involved, you just use the blockchain and when you use your Mana, it begins recharging automatically. In the technical operations section, I’ll go into detail on exactly how it works including how long it takes to recharge.

The below snapshot is of Kondor, a browser extension wallet for Koinos. Here, you’ll see that this wallet holds 186,709.727 $KOIN and it has access to an equivalent amount of Mana. Use it, let it recharge and use it again. Rinse & repeat.

Mana Sharing
Despite not having any $KOIN in your wallet whatsoever, any user can still access the Koinos blockchain if someone has shared their Mana with their wallet. This feature allows what we call “tokenless access”.

Since Mana is regenerative and cost nothing to the $KOIN holder, the holder can share their Mana with anyone they wish, giving them the same rights to access the Koinos Blockchain as if they held $KOIN themselves. This cost nothing to the person sharing the Mana, and it cost the receiver nothing to use it.

This fundamental principal is what allows existing $KOIN holders to on board new users who have no crypto whatsoever. This is especially true for dApps that wish to broaden their audience to include new-to-crypto users.

In comparison, blockchains that utilize a fee based system must always require the user to have tokens to pay the gas fees. Although account abstraction is now part of Ethereum, it still does not provide the same loss-less feature that Mana sharing enables.

Technical Operations
For those who have a deep desire to understand the mechanics, this is for you, so strap on your nerd hat.

Mana is quantifiable

Mana math is simple and you don’t need any complex math to understand it. If you have 1 $KOIN, you also have 1 Mana. And like Bitcoin, $KOIN can be broken down into a satoshi which is equal to 0.00000001 $KOIN. Mana can also be broken down into a satoshi.

This equivalency of 1 $KOIN = 1 Mana cannot be altered and it also scales linearly. such that if you have 100,000 $KOIN, you would also have 100,000 Mana. But what happens when you use all of your Mana?

If you use 0.4 Mana, 0.4 $KOIN gets locked.

For each unit of Mana that is consumed, an equal amount of $KOIN is locked to your wallet and cannot be transferred. It does not matter if you are holding $KOIN directly or using Mana sharing, the same amount of $KOIN is locked.

This locked $KOIN immediately begins to unlocked in lock step with the speed at which your Mana is recharging, we’ll discuss recharging in the section directly below this one called “Mana automatically recharges”.

Mana Automatically Recharges
Mana recharges at a fixed rate of 0.00000231 Mana/Second and this rate scales linearly. For example, if you have a wallet that contains 100,000 $KOIN, then your recharge rate is 100,000 x 0.00000231 Mana/Second or 0.231 Mana/Second.

This means that the more $KOIN you hold, the more transactions you can perform within a shorter period of time. This encourages Mana to be pooled together and work collectively and why dApps should aim to gather enough Mana to be able to continuously fuel their operations.

Mana Pools
Since Mana that is pooled together into one wallet behaves more efficiently than Mana spread over many wallets, it is natural that Mana pools form. This is not cause and effect, rather it is by design. In fact, the efficiency of pooled Mana reflects one of the basic economic principals of functional capitalism. The more money that is able to work together, the more effective it is at being utilized. Imagine if you needed to borrow $500,000 to buy a house and you had to borrow $10,000 from multiple banks. Now imagine a similar scenario where Tesla was trying to borrow $100,000,000 to expand their operations.

One of the projects that I help co-found is called Koinos Account Protocol or KAP where we have three basic pillars of operation, one of them is called “Mana Stations” which is Mana Pool.

In fact, at KAP, we are focused on creating the largest public pool of Mana for our users who hold a KAP account. Since it is a public pool, the more $KOIN it collects, the more effective Mana sharing can be. And since each pool may be used differently, we’ll have different stations that fuel different use cases, hence the name Mana Stations.

The Price of Mana (HintL its still $0.00)

Although Mana is free, it represents the ability to access the Koinos blockchain which is an extremely valuable feature. If Mana sharing proves to be as successful as we expect it to be, than demand for $KOIN should rise because the need to access Mana increases.

However, I believe that dApps wont directly charge their users for Mana. If they do, they effectively turn Mana into a fee which doesn’t exploit its main value proposition. They can certainly do this if they wish, but I don’t think this is the best way to utilize Mana.

Instead, if dApps offer Mana for free, the frictionless user experience allows dApps to offer web3 services with minimal or even no cognitive load. dApps can find a plethora of other ways to monetize their user base. We see examples of this everywhere in the software world. Here are some examples:

  • Discord offers users free access to chat platform but they monetize through boost and nitro services.
  • Twitter offers users unlimited free tweets, but monetize through twitter plus.
  • Linktree offers users free link pages, but monetizes through additional link features.
  • Spotify offers free music, but monetizes through Spotify Premium where you can download and listen off line and ad free.
  • Linkedin offers free connectivity, but monetizes to get your messages ahead of everyone else’s.
  • Tinder offers free swipes, but monetizes by offering unlimited swipes in their premium service.
  • eBay offers free listings, and you only pay if your item sells.

Imagine these services were all powered by web3 instead and what benefits web3 could offer, just by providing free access.

The ability to eliminate the cognitive burden of using blockchain is the main value proposition of Mana and Mana sharing.