BurnKoin Launches On Koinos Main Net!

BurnKoin Launches On Koinos Main Net!

BurnKoin is a public mining pool for the Koinos Blockchain. Use at your own risk. Access at www.burnkoin.com.

Hello friends!

Koinos main net was recently launched LIVE on YouTube. BurnKoin launched just several hours later, opening up the mining pool to main net token holders!

BurnKoin was initialized with 500,000 KOIN and nearly 1,400,000+ KOIN has been deposited by users from around the world since main net launched! Thank you to everyone who has participated in our launch!

DECENTRALIZING THE BURNKOIN CONTRACT

Currently, BurnKoin smart contacts are under the control of BurnKoin creators Luke M. Willis and Kui Xi He. This will allow us to fix any bugs or recover user funds easily however, after 30 days from the 5th of November launch date, BurnKoin will invoke the Koinos authorities override feature and remove ourselves from being able to modify the BurnKoin smart contracts.

After the override is invoked, BurnKoin will maintain two entry points to the smart contracts.

The first entry point allows us to only execute periodic reburns.

The second entry point allows us to only adjust the following operating parameters:

  • The wallet address that receives the operator fee.
  • The operator fee, currently set to 5% but can be raised or lowered. This fee only impacts profits and not deposits.
  • The ability to burn KOIN upon deposit (true/false)
  • The minimum KOIN buffer value (see Minimum KOIN Buffer below).

This effectively means BurnKoin will be fully decentralized on December 5th and the BurnKoin team will no longer be able to access any deposits.

We strongly recommend only using the BurnKoin.com interface to interact with our service! After we invoke the authorities override feature, we cannot recover any user funds that are sent directly to the BurnKoin address by accident! Be careful when interfacing with BurnKoin via command line!

MINIMUM KOIN BUFFER

Mana is required to produce blocks, which means that block producers require a minimum amount of liquid KOIN. When transaction volume increases, the cost of block production also goes up and more liquid KOIN is required.

BurnKoin utilizes an adjustable KOIN buffer to handle this, currently set to 10 KOIN, but can be raised or lowered by BurnKoin as necessary. This setting impacts the maximum amount of KOIN that can be withdrawn from the KOIN treasury at any given time.

For example, in image 1 below, the KOIN treasury has approximately 2,740 KOIN at the time of this image was taken, but the info panel indicates approximately 350 KOIN is liquid and available for withdrawal. The amount of Mana that has been consumed can be determined as follows:

KOIN Treasury: 2,740 KOIN
KOIN Buffer: 10 KOIN
KOIN available to withdraw: 350 KOIN
Mana Consumed: 2,740–350 =2,390 Mana

2,390 Mana has been consumed and the equivalent amount of KOIN is locked as it regenerates Mana. The 350 liquid KOIN available to withdraw already takes into account the KOIN buffer amount.

Image 1: Pool KOIN description shown

HOW pVHP WORKS

pVHP is a fungible token that keeps track of the overall block production rewards for everyone. When new deposits are made, the Pool’s total value in KOIN is determined first. pVHP is then minted (and sent to the depositor) in proportion to the new deposit’s share of the mining pool.

This is why users may find that for identical deposits in KOIN/VHP done at two different times, may result in varying amounts of pVHP.

pVHP is fully transferable to other wallets and anyone holding pVHP may redeem it for its equivalent value in available KOIN or VHP at any time.

WITHDRAW FEEDBACK

We have received great feedback from the community, specifically with regards to withdraws.

The Koinos Blockchain requires VHP to produce blocks and the only way to maximize block production is to hold as much VHP as possible and as little KOIN as possible. This effectively means that our position is to optimize for block production and generating yield.

The KOIN treasury will be rewarded with new KOIN each time BurnKoin produces a new block, increasing the available KOIN for withdrawal. Periodically, BurnKoin will conduct a reburn to maximize our ability to produce blocks, thus reducing our KOIN treasury.

pVHP holders may withdraw from the available liquid KOIN in the treasury at any time.

We recommend our users always retain a portion of their KOIN to meet their current and future Mana needs. Should future Mana needs rise, users can always withdraw discreet amounts of KOIN as it becomes available in the KOIN treasury. Users may make new deposits as they see fit since it does not impact past deposits.

Alternatively, pVHP holders may withdraw 100% of their pVHP as VHP at any time. We strongly believe in your ability to access your VHP because block production is directly tied to governance and we want you to be able to vote in the manner that best suites you. BurnKoin will provide our opinion on future proposals to inform our users of where we stand to help you make your decision.

Larger Withdraw Request

pVHP token holders seeking to withdraw KOIN in amounts larger than what is available in the KOIN treasury may either do so piecemeal (withdraw as KOIN becomes available), or submit a request to BurnKoin for an OTC swap. We will satisfy the request using our KOIN reserves at a negotiated rate that is equal to or better than what can be achieved on KoinDX. This feature will be added to upcoming releases of BurnKoin.

SOLO MINING v BURNKOIN

When discussing the withdraw feedback, we found it important to highlight the differences between solo mining and the benefits of participating in the BurnKoin mining pool.

When solo mining, miners must burn KOIN to create VHP. The only method to convert VHP directly into KOIN is to operate a mining node. This conversion process will take approximately 1 year to complete.

Solo miners who no longer want to operate a node and wish to exit their position immediately may use an exchange such as KoinDX however, they may experience limited liquidity and high slippage.

This means mining is a long term commitment.

Most BurnKoin users will find that on a daily basis, there is more KOIN available in the BurnKoin treasury than they can withdraw from when compared to solo mining.

COMPETITION

BurnKoin’s code is open source (on github.com) and anyone is free to use our code as a starting point. We are focused on maximizing block production and openly welcome anyone who wishes to create a mining pool that may offer something different for Koinos users, such as a mining pool that maximizes liquidity. As always, we believe strongly in decentralization and you if you have any questions, feel free to contact us on twitter @burnkoin.

THANK YOU

We cannot thank Koinos Group, the community developers and the community itself enough for creating a ecosystem full of opportunity and for supporting our mining pool.

A weekly newsletter will be forthcoming and we also look forward to hearing more feedbacks on the user experience of BurnKoin. Below, we leave you with the latest Koinos Main Net and BurnKoin stats!

Koinos Main Net Stats

  • koin.totalsupply:
    ~8.15M KOIN
  • vhp.totalsupply:
    ~7.44M VHP
  • virtual supply:
    8.15M KOIN + 7.44M VHP = ~15.59M Total

Translation: ~15.59% of main net KOIN has already been claimed and the network is secured with 47.7% of virtual supply as VHP. The ideal rate is 50% or better. The current APY for miners is roughly 3.75–4%.

BurnKoin.com Stats

  • VHP Treasury:
    ~1.9M VHP
  • BurnKoin’s Representation of Koinos Virtual Supply:
    ~1.9M VHP/ 15.59M = ~12%
  • Approximate Solo Mining APY*:
    (15.59M x 0.02) / 7.44 = 4.19%
  • Approximate BurnKoin APY:*
    [(15.59M x 0.02)*0.95 / 7.44 ]= 3.98%

*APY calculation is approximate. It assumes virtual supply exist as 50% KOIN and 50% VHP while simultaneously, all VHP is being used for block production.

Translation: BurnKoin is holding ~12% of the entire Koinos Ecosystem’s virtual supply (KOIN + VHP).