I believe that although many people have participated in public discussions, they have not actually realized the logic and necessity of Horizen changing the token mechanism.So, I think it’s necessary to start from my understanding and explain in detail why the current Horizen must change its token strategy.
1: For many people who only care about token prices, changing token strategies is definitely advantageous. Because in the Chinese community where I am located, no horizen miner will hold horizen for a long time (not a single one). When I communicate with every Chinese miner I know, the only answer I get is that they will immediately sell the mining proceeds and exchange them for BTC or other tokens. This is an important reason why the price of horizen cannot rise for a long time. We must admit that horizen is not a BTC. horizen miners sell tokens without thinking, and the continuous decline in token prices will affect the confidence of most people in horizen. Fewer and fewer people will buy horizen, leading to more and more miners selling without thinking, and then continuing to cause price drops, forming an unbreakable vicious cycle. This is a tragic fact, but for cryptocurrencies other than BTC, as long as the POW mechanism is adopted, the situation mentioned above is an inevitable result. On the contrary, if you adopt a POS mechanism, the situation will immediately become different. Because the profits obtained from POS rely on token locking, if you understand POS as mining, then before POS mining, you must spend money to purchase tokens and continue to lock in to obtain profits. Therefore, POS naturally means the inflow of money, not the outflow. Summary: POS=inflow of money, POW=outflow of money. So if you only care about price, then you must support Horizen’s transition from POW to POS.
2: In the second part, I would like to explain the inflation and risk issues that many people are concerned about. I have read many people’s comments and observed that most of the opposition is based on anxiety about inflation. These people believe that as long as the total circulation does not exceed 21m, the value of horizen will be guaranteed. In fact, this is a one-sided understanding. The success or failure of a project depends not only on limiting the total amount of tokens, but also on ensuring the team’s funding needs in fierce competition. Once modified to POS, the 60% token originally given to miners can be transferred to the incentive ecosystem.At present, the Zen team only allocates 20% of the mining revenue, and all aspects of development, marketing, promotion, and incentives rely entirely on this 20% funding. I think this is extremely unreasonable. Simply put, this amount of money is too small to keep up with the fierce competition in the market.It is ridiculous that on the one hand, the team’s funds are tight, while on the other hand, the miners are mercilessly selling horizen, lowering prices, making the team even more unable to join and make ends meet. Horizen’s miners are like vampires, sucking on incentive funds that should have belonged to the ecology.This situation cannot continue anymore!As for the risk issue, my suggestion is to directly refer to or even copy Ethereum’s token economics. This is mainly for security reasons. Ethereum’s POS mechanism runs smoothly and can be seen as a successful, mature, and secure transformation. So, Horizen does not need to create its own strategy that has not been tested over time, but instead directly replicates successful POS cases in the market, which is more secure. In addition, Ethereum’s POS mechanism is anti inflation, and It has a mature deflation mechanism, and I believe Horizen’s new token mechanism can be regarded as a key reference object. In this way, we can perfectly address everyone’s concerns about inflation and security. And in terms of confidence, adopting mature solutions in the market will reduce a significant amount of explanation costs, making it easier for the community and long-term holders to accept this transformation.
3: Horizen is currently in a critical and difficult period, and I fully understand some of Rob’s lofty moral standards and beautiful and great visions. However, these visions are facing a cruel reality, which is that the projects currently participating in fierce competition in the market have had a large amount of investment since their inception. These huge investments have given these projects a first mover advantage from the beginning. They can attract enough attention and raise the price of tokens by incentivizing and promoting at all costs, thus obtaining a continuous stream of funds from the market.In order to cope with increasingly fierce competition, I believe it is necessary to adopt more extreme token allocation strategies! For example, using all 60% of the profits originally owned by miners for development and ecology. That is to say, assuming the current circulation of Horizen tokens is 15m and the total amount is 21m, before transitioning to POS, directly transfer the remaining 6m tokens to the Horizen Foundation account in one go! Then transition to Ethereum’s POS mechanism. This can allow the team to have sufficient funds and obtain long-term sustainable funding in subsequent POS mining.Finally, I would like to emphasize that in such a fiercely competitive market. I think reducing the funding of the Horizen team is foolish and ridiculous. We are facing a moment of life and death. It is time to give up traditional thinking and unrealistic ideals, say goodbye to the Vampire Miner, and let’s concentrate our funds to create a greater cause.