Thales: We’re building a whole new economic system
Thales, the first lightweight, high-performance parallel chain in the Polka ecosystem, has received a $10 million investment from ZKfund, Holo Capital, and Digital Assets Investment, which will be used for the development of Thales’ economic system layer Hayek, DAO governance layer Plato, and storage network layer IPS (IPS-Thales).
- Introduction to Thales
The Thales project is made up of Hayek, an economic system layer, Plato, a DAO governance layer, and IPS, a storage network layer (IPS-Thales). Although the consensus mechanism of Thales is NPOS, unlike Poca, Thales rewards not only the verifiers and nominators who participate in the consensus but also the security nodes that store the complete block data, as well as the storage miners who build the entire storage network. participants in the Thales network are verifiers, nominators, data backups, and storage network builders, and all four share Thales governance tokens are rewarded for mining.
The Thales economic system is designed as a multi-token model with a total of 10 billion THALA, which is never issued in increments, to fuel the operation of the system, and all transactions in the system are subject to THALA as a fee.
The ECHO algorithm has an initial mintage of 100,000 coins and is based on market demand for inflation and deflation.
The total IPST is 10 billion coins, which will never be issued in increments and will be 100% mined to provide incentives to miners who provide storage.
- The economic system Hayek
We have always considered Bitcoin to be a digital asset, not a digital currency. This is because the basic function of a currency is to act as a medium of exchange and a measure of value, while the basic function of an asset is to add value and retain value. People need assets and money in their daily lives, but the basic economic logic of money and assets is completely different.
Bitcoin shows a higher value than gold. The end of the standard monetary system of gold was not only due to the difficulty of bearing the higher costs of circulation and the difficulty of division but also because the total amount of gold was limited. Although the amount of gold traded in the London Gold Exchange far exceeds the underground gold reserves, paper gold can be produced at will and the exact total amount of gold stored remains unknown, the total amount of gold is limited in the eyes of the public. Any commodity with a finite total amount can only be an asset that can act as money for a short period of time, not for a long period of time. The historical evolution of gold to credit currencies (corresponding to digital currencies) and digital assets such as Bitcoin will inevitably shift the function of medium of exchange and measure of value through a new global digital currency with a stable and adjustable supply, retaining only the properties of a digital asset, and the function of hard currency at critical times.
Based on this economic understanding, we have designed a parallel dual currency economic system called Hayek, the stable currency ECHO and the digital asset THALA. this value stability differs from DAI (anchor currency) or fiat-collateralized USDT, but is achieved through a transparent issuance and destruction mechanism to strictly control the money supply.
There is no difference between THALA and ordinary digital currencies. It has both use-value and price-value. THALA can only be used as a digital asset and hard currency in the event of a crisis because the total amount is limited and will not be issued or destroyed.THALA is the fuel that drives the system to function properly. It is also a digital asset with a store of value.
- Credit currency ECHO
In a decentralized world, there has never been a greater need for a stable digital currency that is stable rather than fixed. The underlying architecture of Thales makes it possible for decentralized systems to be used on a large scale, and only in this case will it be possible for a universal digital currency to emerge in the Bit world.
In the mechanism of ECHO, we have designed a new mechanism for adjusting the money supply. ECHO is intended to be an everyday digital currency and a universal digital currency that not only functions as a self-regulating medium of exchange, but also has a reliable credit system.
We believe that the most important relationship between people is exchange. The most important function of money is to be a measure of value and a medium of exchange. The wealth of each individual in the economy does not depend on how many tokens he has, but on the proportion of his wealth in the total wealth of society. Inflation occurs because the issue of money is not fairly and equitably distributed to the participants in the system. Based on this understanding of economics, we are prepared to create an economic system that is free from hyperinflation and deflation. In this economic system, a new mechanism for the distribution of money will be introduced to ensure that fairness and efficiency coexist and to promote the sustainable operation of the system.
Unlike ordinary digital currencies, the quantity of ECHO is adjusted in real-time, with the supply adjusting according to demand. Next is our money supply adjustment mechanism, the DMM mechanism: every act of transaction in the system automatically triggers a currency issue.
(For example, if Alice transfers 100 ECHO to Bob, and Bob provides Alice with a 100 ECHO equivalent of apples, then the system will automatically issue currency: 100 ECHO * 1 = 100 ECHO assuming an adjustment factor N of 1).
Issued and unallocated currency will be allocated according to the POES mechanism. An important concept is the allocation mechanism of the new allocation model called POES, where a portion of the newly issued currency (X%) is allocated equally to each periodically active receiving account in the system, while the rest (Y%) is allocated proportionally according to the amount regularly received by each account, provisionally set at X% = Y% = 50%.
To achieve the objective of adjustable amounts, it is necessary to have not only a currency issuance mechanism, but also a currency destruction mechanism. Only in this way can a dynamic equilibrium of the money supply be achieved. The act of trading will consume a certain amount of ECHO as fuel. Here the fuel will be destroyed directly. The user’s transactions are free of charge and it is the unallocated currency in the currency pool that is destroyed.
New currency issued MI = Transaction volume 脳 adjustment factor N.
The currency is reduced mainly by consuming a certain percentage of ECHO’s transaction volume as fuel.
Fuel = Transaction volume * Adjustment factor M.
Net currency issuance NMI = total currency issuance – total fuel consumed during the cycle.
- Polkacash, a decentralized OTC trading protocol
Polkacash is a decentralized OTC trading platform built on top of Ether. Once users log in with their wallets, they can trade OTC in the system. The main actors in the system are sellers, buyers, witnesses, and parliamentarians. We have built a trading system and also an on-chain credit system. Trading plus credit makes the whole system move towards a positive cycle.
- Storage Incentive Layer IPS
IPS is Thales’ storage network IPS (IPS-Thales) storage network incentive token IPST mining implements 1+6 multi-mining mechanism, while mining the mainstream storage coin FIL+IPST and the top five ecological application tokens (POC, TMT, NWT, POT, AOE) under the IPS (IPS-Thales) ecology.
- Recent developments
ECHO, the first algorithmic stable currency project in the Polka ecosystem, and Polkacash, the world’s first decentralized cross-chain OTC trading platform, are expected to be launched in Q2 2021.
The IPS (IPS-Thales) storage network’s incentive token, IPST, will be mined using a 1+6 multi-mining mechanism, while the mainstream storage coins FIL+IPST and IPS (IPS-Thales) will be mined. Thales) ecological top five ecological application tokens (POC, TMT, NWT, POT, AOE), the first batch of miners are expected to start mining soon in the second quarter.
The biggest innovation of Thales is the creation of a new monetary system based on a new mechanism, a system designed to solve the problem that Satoshi Nakamoto failed to solve. Satoshi Nakamoto created peer-to-peer digital gold currency, and we want to create peer-to-peer credit currency. The historical process of money in the physical world tells us that we will eventually move from gold money to an era of credit money in the digital world as well, backed by technology and an open and transparent mechanism rather than any power center.