Ethereum Classic’s Lost Opportunity

Like a shooting star in the digital midnight, the Moonlight protocol is making its way through the blockchain universe, illuminating it with a glow of innovation. Initially designed for Ethereum Classic, the protocol combines economic incentives with a visionary approach to network participation. Despite hesitant beginnings, the protocol found its home at Callisto Network, and underrated hero Yuriy Kharytoshyn soon revitalized it, shining a light of innovation on the crypto cosmos.

This article traces the journey of the Moonlight Protocol — from an unadopted idea in Ethereum Classic to becoming a key feature in Callisto Network, reshaping the concept of staking and rewards in cryptocurrency. Adaptation, perseverance, and the discreet yet profound influence of a talented innovator in the shadows.

Economic Power Play: The Gym Theory in Crypto

At the heart of the genesis of the Moonlight Protocol lies the Gym Market Theory, an ingenious metaphor created by Parabolic Trav to demystify market dynamics. This theory compares the market to a gym, where participants — buyers and sellers — clash and influence asset prices, much like athletes in a gymnasium.

In this market gym, participants enter as cash holders; their migration to the coin holder side symbolizes a price increase, while the opposite movement leads to a decrease. The speed at which they cross this frontier determines the long-term trend of the asset. For example, Bitcoin is distinguished by its high trend velocity and demand to hold, with buyers reluctant to sell, giving the cryptocurrency an almost vertical price dynamic.

This analogy extends to the concept of staking in PoS protocols. The ease of becoming a “staker” accelerates the transition from the buy/hold room to the staking room. Often perceived as a graveyard, staking implies an increased desire to hold indefinitely and never sell. When staking is active, the amount of circulating supply decreases, which raises the prices. Thus, a price increase further strengthens the stakers’ desire to hold, creating a virtuous circle that supports the asset’s value.

This theory, elegant in its simplicity, provides a framework for understanding not only market trends but also the psychological and economic impact of staking on cryptocurrencies, a crucial aspect for grasping the scope of the Moonlight Protocol in the crypto-asset ecosystem.

The Genesis of Cold Staking

The origins of cold staking can be traced back to the Moonlight protocol, designed to revolutionize the economy of Ethereum Classic.

This innovation, brought by Dexaran, co-founder of Ethereum Classic, aimed to balance the forces between miners and coin holders while stimulating the cryptocurrency’s value and adoption. However, despite its potential, the protocol was not adopted by Ethereum Classic, leaving this innovative idea without a home.

Callisto Network, recognizing the potential of cold staking, integrated it into its ecosystem. Cold staking has introduced an engaging new economic dynamic to the cryptocurrency world by rewarding holders simply for holding their assets.

Unlike traditional Proof of Stake (PoS) staking, where the staked coins directly contribute to consensus and block validation, cold staking focuses exclusively on the economic aspect. Participants lock their coins into a smart contract, meaning there’s no need to maintain an active node, making staking more accessible.

The coins, locked for 27 days, are rewarded from a portion of the block rewards; stakers can withdraw their funds or claim rewards after the locking period, offering a straightforward approach to asset growth.

This innovative concept marked a pivotal shift in blockchain economics. By decoupling rewards from governance roles, the Cold Staking Protocol enabled a more democratic and economically beneficial participation in the network. It also led to a more equitable distribution of influence and benefits among ecosystem actors, making it a critical turning point in the evolution of blockchain technology.

Evolving to Cold Staking V2

Under the impetus of Yuriy Kharytoshyn, cold staking underwent significant evolution with version 2, bringing major technical improvements. V2 notably introduced the innovative concept of a “multiplier,” designed to maximize rewards for long-term investors, thus rewarding their commitment and loyalty to the network.

This new version also allowed the addition of funds to active staking, giving users the flexibility to increase their participation without interrupting their current staking cycle and thus encouraging a strategic approach. The reward formula of Cold Staking V2 was adjusted to incentivize users to commit to more extended periods thanks to the increase in their reward multiplier.

The impact of these improvements on Callisto Network was profound. cold staking V2 reinforced the network’s attractiveness to investors and contributed to better asset retention within the network. Moreover, these innovations demonstrated Yuriy’s ability to bring advanced and user-friendly technical solutions, strengthening Callisto Network’s position as an innovator.

The Role of the Silent Innovator

Behind the scenes of the evolution of cold staking, Yuriy Kharytoshyn distinguished himself as a silent but determined innovator. His discretion hides an innovative spirit and an exceptional ability to transform complex concepts into practical and accessible solutions. Yuriy listened and integrated community feedback, adjusting and perfecting the Moonlight Protocol. His often-shadowed work was essential in the increased adoption of Cold Staking V2. The community’s enthusiastic response, with 35% of the Callisto Network’s supply frozen in Cold Staking, testifies to the profound and lasting impact of his innovation.

As the Moonlight Protocol continues to shine on theCallisto Network, Yuriy isn’t done yet…

Don’t miss our next article, “Colder than Cold, Staking by the Man from the East.”

⬅️ Read Part 1 “The Hidden Crypto Gem You Can’t Trade”.

Callisto Network (CLO) is available on Gate.io, 1inch, and SOY Finance (DeFi).

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Disclaimer: This article is a contribution from a member of the Callisto Network community. The views and opinions expressed in this piece are those of the author and do not necessarily reflect the official policy or position of Callisto Network.

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