This article was first published on Centrality - Medium
This is the second blog on our series on Centrality’s token economics. Check out the previous blog here.
When the CENNZnet token economy launches, several tokens will be used in Centrality’s ecosystem. Here’s an introduction to the different types of tokens that will be made available.
Firstly, the CENNZnet token economy has been designed for both developers and users in mind. As a result, it will be cost-efficient to run applications on CENNZnet and good applications will be incentivised to grow. Those who use the network and help it grow will be rewarded. We’ve also aimed to reduce friction for onboarding for DApps and consumers. The network will be governed by people who have a stake in CENNZnet and as we have more people using the network, the more the value of CENNZ will appreciate.
CENNZnet will utilise four types of tokens: staking tokens, spending tokens, reserve tokens and user tokens.
CENNZ is the staking token
- CENNZ will enable users to participate in the network consensus
- CENNZ will be required to join CENNZnet as a validator and contribute to securing and governing the network
- Validators will receive block rewards in the form of the spending token, CentraPay
CentraPay is the spending token
- CentraPay will be used to pay transaction fees on the network
- It will also be used as the reward for validators
- The spending token is designed to be stable and predictable for users and businesses who operate on CENNZnet
- With the dual token model, CENNZnet aims to correlate the value of CENNZ with network activity, while keeping fees stable and reasonable for continue network growth
- Not every protocol or DApp requires a token to operate. In fact many tokens produced to date have no genuine utility. However, we believe some core functions in the platform do justify the need for a separate utility token.
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Centrality - Medium