The Relaunch (v2)
We announced the plans for v2 back in October 2020 wherein we stated that the TurtleCoin® v1 network would start its path to it’s own destruction around block 4 million and ultimately kill itself off at block 5 million.
We expanded on this idea in the v2 overview article which included information about the v1 chain ramping down over time so that we make it to block 5 million in a predictable way. We’ve also stated that the v2 “pre-mine” (so to speak) will be equivalent to the number of coins expected to be emitted in v1 at block 5 million with the swap ratio (100,000:1) being maintained.
In the v2 FAQ we clarified what the total supply in v2 would look like at launch.
Right now, we estimate that the circulating supply of TRTL v1 at block 5,000,000 (when the chain ends) will be around 120,000,000,000 TRTL when accounting for the ramp down of the v1 chain. At the swap ratio of 100,000:1, this means that approximately 1,200,000 TRTL will be pre-mined on the v2 chain to fund the swap process (details below).
v1 Total Supply
Since that time, we have busted out our abacuses, carried the niner, and found a few extra toes so that we could calculate the expected amount of circulating TurtleCoin® on the v1 chain at block 5 million.
Note: Block rewards, and hence emission is defined in the code base, it’s pretty easy to run the calculation if you’ve got a few minutes.
What that calculation revealed was that, based on our ramp down mechanics, the adjusted total supply of v1 comes to 125,506,496,777.95 TRTL.
To be abundantly clear, there never will be more than just over 125 billion v1 TRTL in existence because the v1 chain will die, it will come to and end, at block 5 million.
The block explorer, the circulating supply page, etc. were updated to reflect the adjusted v1 total supply as a result of this fact.
So… where did the other 875 billion coins go?
Burning ~87.5% of v1 Total Supply
The Total Supply of TurtleCoin® v1 was just reduced from 1,000,000,000,000 TRTL to 125,506,496,777.95 TRTL. The remainder (874,493,503,222.05 TRTL) won’t ever be mined, no one has it, it will never exist.
However, from the perspective of the total supply (ie. economics) it’s basically a coin burn of ~87.49% of the total supply. The coins will never be minted, they’ll never exist, they just disappear from the total supply. Simple as that.
The v2 Total Supply
We’ve touched on this in the FAQ, overview, and few other articles and most recently in Podcast #002 – Coin Burn.
The Total Supply of TurtleCoin® v2 will be dynamic. At launch, the total supply will be the amount of the pre-mine (1,255,065.97 TRTL) generated to fund the swap process. As the chain is used, transactions are handled, and new coins are minted, the total supply will increase. If candidate nodes (Producers and Validators) perform… poorly… and their stakes are slashed, the total supply will decrease.
As we discussed in Podcast #002, the v2 supply consists of more than just Total Supply and Circulating Supply. There’s actually a few different buckets that currency lands in:
- Circulating Supply: The coins that are free to move within the network. Users can send it back and forth, buy things with it, move it around, etc.
- Staked Supply: The coins are actively in a stake (whether the entry fee for a candidate node or as votes) and cannot be freely moved without withdrawing the stake (and their votes)
- Slashed (Burned) Supply: The coins have been slashed or burned from the staked supply as a result of producers and/or validators not doing their job or doing it poorly. These coins are never coming back.
This means that the
Total Supply = (circulating supply) + (staked supply).
Before you scrunch your nose, put your hands on your hips, and take to reddit or discord to give us the heretofore about an uncapped total supply in v2, let’s take a break and talk through some example numbers.
We’ll work with the following assumptions based upon the observations of v1 transactions and what we’ve discussed to date regarding v2:
- +95% of transactions in v2 will pay a
0.01TRTL transaction fee.
- Block rewards will be a 1:1 match (1x multiple) of the aggregate base transaction fees in a block.
- v2 transactions require PoW when sending that takes an average of ~5s to complete.
- Block rewards are distributed as outlined in v2 overview
- The 100,000:1 swap and
0.01TRTL transaction fee will result in less transactions in v2
- No stakes are slashed because everyone does their part and follows the rules
- Stakes funds cannot be “spent” as part of the circulating supply
- Blocks (and thus rewards) are only created when there is enough aggregate transaction PoW in the mempool to do so
Today, we mine ~2,880 blocks per day (using a 30s average block time). This mints ~77 million v1 TRTL. Swapping those 77 million v1 TRTL, if we were still doing PoW in v2 and adhering to 30s block times (we’re not doing this), we would mint 771.26 new v2 TRTL per day.
How many transactions need to take place in v2 to generate that amount of TRTL. Simple really.
771.26 * 100 (drop the decimals) gives us 77,126 transactions per day or just under 1 transaction per second. Seems doable, right? Maybe…
77,126 transactions would take (at an average of 5s per transaction for PoW) about 385,630 compute seconds to complete. That’s about 4.5 compute days – just to maintain the v1 per day new coin emission (as of May 15, 2021).
compute time is used here because the transaction PoW is distributed in the sense that each user sending a transaction is responsible for their own transaction PoW. Simply put, 5 users mining their transaction each taking 5s would be a total of 25 compute seconds.
How many transactions in v2 would it take to mint 1,255,065.97 v2 TRTL (a doubling of the initial total supply)? Again, drop the decimals. Users will need to generate about
125,506,597 transactions to double the v2 total supply.
That’s 27x more user generated transactions than exists in the v1 chain after more than three years of use.
If every transaction takes an average of 5s of PoW work to complete, it’ll take an aggregate of 627,532,985 seconds to generate that number of transactions.
That’s 7,263 compute days (or 19.89 compute years).
Even if the transaction PoW is optimized by some new fangled mining hardware or software, and those transactions are distributed across all users thus shortening that 19.89 compute years to say 3 years of actual time, emission is essentially slowed to a trickle.
When you combine the transaction PoW requirements, a 1:1 match of new rewards, stakes being locked (where they can’t be spent), stake slashing, blocks only being minted when required, and the fact that the vast majority of transactions will carry fees of just
0.01 TRTL, the chances of rampant inflation on the v2 network seems pretty low.