The TomoChain blockchain wants to help crypto-verse develop high-performance projects that not only scale but are also interoperable. But what else should you know about this blockchain-powered project? It has a native token, allows for staking and its block rewards halving is around the corner.
What kind of blockchain project is TomoChain and how similar or different is its block reward system compared to, let's say, Bitcoin?
TOMO is the native token on the TomoChain blockchain. It powers several functionalities key to the network's security. However, we cannot look at the history of this cryptocurrency token without looking at the blockchain platform.
So, what is TomoChain?
TomoChain is a decentralized blockchain platform and cryptocurrency project, with a native token called TOMO. It uses the Proof-of-Stake Voting (POSV) consensus mechanism to validate transactions and secure the network.
TomoChain wants to make it easy for millions of users to access and use blockchain platforms without having to face many of the problems and challenges currently plaguing Blockchains. These include scalability, cost of transactions, and interoperability.
When did it launch?
TomoChain launched its project in March 2018 through an ICO (initial coin offering) that raised $8.5 million. Each TOMO token was sold at $0.25, with interested parties purchasing the ERC-20 token using Ethereum (ETH). After the ICO, the TomoChain team launched the main network (mainnet) in December 2018.
At the mainnet launch, TOMO migrated to the standalone network, shedding the ERC-20 tag after a 1:1 token swap.
TOMO currently trades on several top marketplaces, with its price largely mirroring the prevailing sentiment across assets. The highest price ever for TOMO so far is $2.30, which it hit on April 29, 2018, as most assets plummeted.
TOMO touched its all-time low of $0.1407 on March 13, 2020, the so-called Black Thursday that also saw Bitcoin plunge to lows of $3,800.
Currently, TOMO is trading around $1.30, which looks like a bargain given the potential for it to skyrocket in the future.
What is TOMO used for?
TOMO is the standard unit of transaction on the network. You need TOMO tokens to become a Masternode or to stake for rewards. The token is also used for governance, where holders can vote on issues related to network development.
TOMO holders use their tokens to vote for special nodes called Masternodes. The total number of Masternodes at any given time is currently limited to 150. For you to become a Masternode, you need to deposit 50,000 TOMO in a smart contract. Candidates who resign must wait for 30 days, or 1,296,000 blocks before they access their locked tokens.
When a TOMO holder wants to vote for a Masternode, they log in to the TomoChain governance dApp and send at least 100 TOMO tokens to a smart contract. These tokens are locked for the period of staking.
These nodes validate transactions and secure the network in periods that cover 900 blocks, also called an epoch. It takes about 30 minutes for every epoch, which is when Staking rewards are automatically sent to the Masternodes and shared with the TOMO holders who voted by staking their tokens
Here is how the rewards are shared:
- Masternode gets 40%,
- Staking reward 50%
- Foundation reward 10%
If you want to buy TOMO and are wondering whether this is profitable, then you should know that it can be. What makes a difference here is the amount of TOMO tokens you hold and indeed stake.
The more you stake, the more you are likely to earn from the share of 50%. It is passive income and you still keep your tokens.
What is Block Reward Halving?
Block reward halving involves a reduction of the reward nodes earn for successfully adding a new block to the blockchain. Bitcoin, for instance, cuts miner rewards after every 210,000 blocks (about four years.) The last halving in May 2020 cut these rewards from 12.5 BTC to 6.25 BTC. The next one is expected in 2024 and will see miners earn 3.125 BTC for every valid block.
Now, TomoChain uses the POSV consensus mechanism, which means new coins are minted and not mined. So how does TomoChain's block reward halving work? Earlier we simply said you need to replace "mining" with "staking". Now let's explain staking and how staking rewards are set to reduce (halve) progressively till all minted coins are released into circulation.
TomoChain Block reward halving
TomoChain will have a total of 100 million TOMO. At the genesis block, a total of 55 million tokens were released into circulation. Of the remaining, 12 million TOMO were reserved for the team and a further 16 million for strategic partners.
That left 17 million tokens that were earmarked as block rewards. The token emission schedule for these tokens is that halving will occur in three phases as shown below:
- 1st and 2nd year- 4 million annually (total 8 million)
- 3rd, 4th, and 5th year- 2 million annually (total over three years is 6 million)
- 6th, 7th, and 8th year- 1 million annually (total 3 million)
When is TomoChain's block reward Halving happening?
As per the token emission schedule, 2021 is the 3rd year of block rewards. TomoChain expects to have its block reward halving in February.
What this means is that the amount of TOMO released as a reward for every block will be cut by half. The total reward in each epoch currently is 250 TOMO.
After the halving, rewards will reduce to 125 TOMO to be shared across all Masternodes proportional to the votes (locked TOMO).
The next halving will again reduce the block rewards by half process will continue as shown until the 8th year.
TOMO tokens are beginning to attract demand from the market, mostly from investors who want to hold the tokens as well as earn more by staking. Although the block reward halving expected in February will reduce the sharable rewards by half, it's still a great opportunity if you are looking for some passive income. But aside from personal gain, staking is a way of securing the network.