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HyperCycle Multi-Tokenomics ( Utility View )

In an effort to try and cover tokenomics from a different perspective, I will discuss the utility aspect of tokenomics as described in the whitepaper.

This is a bit of a long read, but what they have done here is very interesting.

👇 If you want to read a more conventional tokenomics review, I highly recommend a review by Adrian, who did a wonderful overview. You can read the review here:

I particularly love this poetic line:

As someone who missed out on previous sales, the tokenomics may seem "predatory" as purchases are met with strong selling pressure every step of the way. 👆

I have to give credit to any project that opens with the following:

“First, let’s start by answering, 'Why' does it need a token?”

I wish all projects would ask themselves or answer this question…

What is the short answer?

“The native HyPC native token is absolutely needed for each machine to initiate any work, not by consensus but by literally ‘absolute need’ for the packet to move…”

They say, “It is crucial for the AI computation node to know with certainty that it will get paid if it does the work.”

Well, this sounds pretty smart to make sure you will get rewarded if you render work, but it gets even cooler…

The algorithm actually embeds the payment in the instructions for the request for work, as well as proof of provenance (where it came from). If the VM validates the payment, the instructions (work request) are sent to the AI machine.

To explain why proof of provenance is needed, let me use their words…

“In order for the provenance to be of significance, the AI machine needs to ensure that the payment comes from a source first that homo-sapiens have identified as money. (why homo-sapiens? Well, they are the ones that run this planet and must identify this as money; otherwise, AI won’t be able to buy electricity or hardware to sustain itself and evolve) Hence the token listings is the first step towards proving that proof.”

I’m going to say it again… How cool is that?

Not only does the VM need to make sure that it will get paid for doing work, but it also needs to agree on “what is money,” which needs to be defined by humans! 🤯

Again let me quote them…

“The fact that someone paid money for the token and everyone pays money for the token is sufficient for the machine to utilize that proof of provenance as valid.”

In other words... These seashells are currency because homo-sapiens buy and sell them!

Now that the AI knows HyPC is currency (money), the AI knows it can be used to pay for things like electricity or whatever is needed. Also, HyPC value is its utility, and the more the utility demand increases (likely indefinitely) vs. the finite supply of the tokens, the more likely the value will increase.

Besides the above proof of value as a currency, which is one of the most interesting tokenomics concepts I have read, it also has 3 main utilities:

1 & 2 I can simply.

  1. Each node must have 1024 HyPC as proof of stake.

  2. Each node must communicate with other nodes, and upon successful completion and proof of this computational work, it allows the node to reuse or reclaim the tokens it received.

Number 3 is a bit more complex, so this is an oversimplification.

  1. HyperCycle's tokens can include or "embed" other tokens or currencies. This means it has flexibility, allowing AI computations to use any currency effectively.

Also, there are no network gas fees; instead, there are "royalties." These payments are automatically and predictably divided among participants in the network. This ensures everyone is properly motivated to participate.

They reference a few examples:

  • HyPC native tokens pay for the overall AI computation, including tools and mechanisms enabling various HyperCycle rings to provide consensus, information propagation, and other useful functions.

  • AGIX tokens to pay for the AI functionality required to maintain an uncorrupted reputation system.

  • ETH, BTC, ADA, or others can be used to pay for the long-term storage of partial snapshots of the HyperCycle network state.

In closing, I think these are some extremely well-thought-out utilities for a token and clearly answer the question, “Why do they need a token.”

While I may have oversimplified my translation, this is 5 stars! Show Less


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