In an unprecedented economic environment, Presearch is taking steps to ensure its token economy is sound and aligned with the marketplace by reducing the maximum supply of PRE from 1 billion tokens to 500 million
When we first launched Presearch in 2017, there were a lot of unknowns in the world of cryptocurrency.
We wanted to ensure that there would be sufficient PRE tokens available to support our token economy and so we launched with the ability to mint up to one billion PRE.
Since that time, we’ve seen tremendous growth in the project, signing up 1.4m users, generating more than 10m searches per month, and launching an innovative Keyword Staking platform that has seen approximately 50m PRE staked.
We’ve also had time to evaluate the role of PRE within the ecosystem and to experiment with the token’s utility as a reward mechanism to attract and retain users, and as a payment/staking mechanism for advertising.
In light of the information we now have on the token economics, as well as the post-Covid macroeconomic environment in which we operate, we have made the decision to reduce the maximum supply of PRE from 1 billion tokens to 500 million tokens, effective immediately.
We plan to have this change to our maximum supply implemented before the end of April, including updates to our smart contract, CoinMarketCap and other token information services.
After the new max supply is disseminated, we will proceed forward with only 500 million total PRE able to be created.
This new number will provide us with greater alignment between the project’s current and future support base, including both users and sponsors, and will enable us to bring supply inline with the needs of the project.
At the same time, we will move to implement a token accounting change that will see transactions previously held off-chain recognized with a corresponding blockchain account, providing increased visibility into token allocations for various holders, activities and expenses, without increasing the supply of tokens in the marketplace.
To reiterate, this is an accounting change and does not impact the number of tokens available compared to where things were yesterday.
During this process, we will move away from using a general liquidity pool utilized to satisfy withdrawal requests to using a number of specific wallets that correspond to specific allocated holdings.
Due to the nature of the rewards program, for instance, some tokens are held in reserve for potential issuance to users who no longer utilize the platform, or for accounts that have been restricted for violating the terms of service. There is a degree of ‘breakage’ (rewards allocated that cannot or will not ever be redeemed) with these allocations that have resulted in internal token transactions not allocated on-chain, as well as internally-allocated purchased or granted tokens that we feel should be recognized on the blockchain.
As a result of moving to recognize all tokens on-chain, Presearch will move to mint these placeholder tokens rather than relying on a database accounting, providing increased visibility and clarity surrounding token status.
The token allocation on-chain will result in the following wallets with associated balances:
*Semi-Locked: Meaning these tokens are not expected to be on secondary markets any time soon. They’re used within the project ecosystem with constraints, or as performance incentives for team members.
This minting is planned to occur on or before the end of April, 2020, and would result in an update to core token statistics as follows:
Max Supply: 500,000,000
Circulating Supply: 399,998,039
Total Supply: 500,000,000
Impact on token and project
These announced changes will have a number of impacts on the token, including but not limited to the following:
- Decrease by 50% the maximum supply of PRE, resulting in twice current perceived scarcity
- Fewer tokens for sale directly by project from reserves over the lifespan of the project, forcing a shift to either a consumptive model (where Presearch earns tokens from advertisers, as opposed to staking) or a reward offset model (where rewards are paid directly to searchers by sponsors) sooner rather than later
- Continued pressure to repurchase tokens from existing holders to replenish supply for resale
- Increase in circulating supply measure from current 155,000,000 level reported by token aggregator sites to approximately 400,000,000 with no material increase in tokens available on secondary markets, as current off-chain holders are currently serviced by the existing portal wallet liquidity pool that facilitates blockchain withdrawal requests
- This reduction in supply will result in a faster switch to decreased rewards per search from the current 0.25 PRE/search — we do not have a timeline for this change or a specific PRE/search reward figure at this time
- We estimate that the remaining 100m or so tokens allocated will enter into circulation over the next 18+ months, through rewards (58 million new PRE), sales to sponsors (12 million new PRE) and the granting of PRE to team members (30 million new PRE) which will happen on a multi-year schedule that will be published at a later date
- On-chain allocation of tokens to founders and team members that currently exists only in a spreadsheet, resulting in increased security for team members who currently hold no tokens officially, as well as visibility into core team member holdings, transfers, etc., as those wallets will be labelled publicly for transparency
Building on a solid foundation
The Presearch team is excited to solidify the PRE token economy as described in this announcement. PRE tokens are the foundation of the project, and these changes solidify the role and position of the key unit of value within the Presearch platform and community.
Our core objective with these changes and notice is to bring the supply of PRE in-line with the needs of the project, ensuring that stakeholders are respected and rewarded for building the Presearch ecosystem, and to provide increased transparency and clarity for those interested in participating in the Presearch token economy.
We will publish a new post with wallet addresses, tx hashes, earning schedules and additional details before the end of April, as soon as all blockchain transactions have been completed.
We welcome any questions you may have in our Telegram community channel, https://t.me/presearch, and look forward to the next leg of the Presearch journey.
Thank you to all of our supporters for your trust, belief and input as we build Presearch and strive to reach the potential of the project and community
Source link: https://medium.com/@presearch/presearch-reduces-token-supply-by-50-cd1b703ffa38