Prosper
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  • Welcome to Prosper
    • Introduction
    • Unique Opportunity
      • Bitcoin: first ever crypto that’s only growing in influence
      • Hashrate: the layer powering Bitcoin as a trillion dollar asset
      • RWA: rapidly-growing category within Web3
    • Why Prosper
    • Prosper’s Mission & Vision
  • Protocol Mechanics
    • Accretive Hashrate-per-token
      • Phase 1: Hashrate Backfilling
      • Phase 2: Protocol Scaling
    • Hashrate Operation
      • Hardware Hosting
      • Bitcoin Production
      • Monitoring Miners
    • Treasury Operation
    • Governance
      • DAO Foundation
      • Governance Proposal
    • PROS Native Token
      • Token Utilities
      • Token Supply
  • App overview
    • Guide to v1 App
      • Protocol Stats
      • Staking
      • Governance
    • v2 App (Coming Soon)
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  1. Protocol Mechanics
  2. Accretive Hashrate-per-token

Phase 2: Protocol Scaling

PreviousPhase 1: Hashrate BackfillingNextHashrate Operation

Last updated 4 months ago

Phase 2 is expected to start after two key dependencies have been cleared:

  • Completion of Phase 1 and confirmation of minimum hashrate-per-token

  • Migration of legacy token contracts to new token contract (i.e., PIP-4 which will be put on Snapshot for community voting shortly)

    • There are multiple existing frictions that will be resolved with the new unified token contract; for more details you can refer to the proposal )

    • There is no new token being launched in this process; PROS will remain the only native token for the protocol (1:1 swap of current PROS tokens to new contract)

Token new issuance to increase the hashrate-per-token ratio

Post token contract migration, the PROS token will be enabled with a new minting function, which will be a critical part of the protocol’s scaling. It is important to note that there will not be any arbitrary minting—new PROS tokens will only be minted into existence when there is a corresponding amount of hashrate being procured and brought online to the protocol—and the resulting hashrate-per-token ratio must be higher in order for this action to be implemented.

The animation below provides a graphical illustration of this concept:

  • Assuming Phase 1 ends with a minimum peg of 5 GH per token

  • DAO proposes a potential new issuance of 10m unit of tokens that would enable addition of another 200 PH/s of hashrate to the DAO

  • The resulting ratio of 6.4 GH per token (700 PH/s vs. 110m unit of total supply) is higher than the existing ratio of 5 GH—satisfying a necessary condition to proceed

  • Only after the new 200 PH/s is actually live on the dApp and running steadily will the new 10m units of PROS tokens will be minted into existence

  • (with a further example of growing to 1 EH/s)

New token sales and release of new issuance

For each approved addition of hashrate and new token issuance, the new minting will first be opened for purchase by wallets that hold an amount of PROS tokens above the required threshold (to be announced later)—the new issuance will be available at a discount to market price with a corresponding lock-up period.

Any remaining tokens not purchased by existing PROS token holders will be opened for purchase by other wallets.

New PROS tokens will only be minted into existence and be available for claim by purchasers once 1/ the lock-up period ends and 2/ the new hashrate is live on the dApp.

Key benefits for PROS holders

The objective of this is to create an intuitive supply modulation mechanism that achieves the following benefits:

  • No arbitrary increase in token supply (it only happens if it’s accretive to existing holders)

  • Each PROS token represents more underlying hashrate over time

  • Limits sell pressure from increase in supply (if hashrate-per-token ratio is fixed, then for the protocol to double in scale, the supply would need to be doubled which is not ideal)

  • Protocol has the flexibility to rapidly grow hashrate in the right market conditions

  • Preferred access to purchase new issuance at discounted price

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