RedistributedDemurrageToken

Use Case

• Network / Basic Income Token
  • 100 Sarafu is distributed to anyone in Kenya after user validation by the owner of a faucet which mints new Sarafu.
  • Validated users are those that validate their phone number in Kenya.
  • A monthly Sarafu holding tax (demurrage) of 2% is deducted from users
  • Each month (after a number of blocks) the total amount tax is distributed evenly out to active users.
    • any single transaction by a user is considered active (heartbeat) (possibly add minimum size of heartbeat in constructor (TODO))
  • This is meant to result in a disincentivization to hold (hodl) the Sarafu token and increase its usage as a medium of excahnge rather than a store of value.

Variables

• Inputs to Constructor (Set only once during contract deployment can't be changed )
  • Demmurage aka Decay amount: A percentage of token supply that will be charged once per - aka period and evenly redistributed to active users
  • Demmurage Period (blocks)- aka period: The number of blocks (equivalent to a time frame) over which a new Holding Fee is applied and redistributed.
  • Inflated Balance: The inflated balance of each user is stored for bookkeeping.
  • Number of Decimals: Resolution on token (TODO) (Default 6)
  • Minimum Activity Volume: (TODO) the minimum transaction amount to be considered active
  • Sink Token Address: Rounding errors and if no one trades the tax goes to this address

Ownership

• Contract creator is owner
• Ownership can be transferred (also to ownership void contract "no more changes can be made")

Mint

• Owner can add minters
  • A faucet contract would be a minter and choose the amount of tokens to mint and distribute to new validated users.
  • The interface says the amount and is at the caller's discretion per contract call. validation is outside of this contract.
• Minters can mint any amount

Demurrage

• Holding Tax (demurrage) is applied when a mint or transfer is triggered for first time/block in a new period; (it can also be triggered explicitly)
  • Supply stays the same.
  • Updates demurrageModifier which represents the accumulated tax value and is an exponential decay step (of size demurrage) for each period
    • demurrageModifier = (1-demurrage)^period
      • e.g. a demurrage of 2% at a period of 0 would be give a demurrageModifier= (1-0.02)^0 = 1-1 = 0.
      • e.g. a demurrage of 2% at a period of 1 would be give a demurrageModifier = (1-0.02)^1 = 0.98.
      • e.g. a demurrage of 2% at a period of 2 would be give a demurrageModifier = (1-0.02)^2 = 0.9604.
• All client-facing values (balance output , transfer inputs) are adjusted with demurrageModifier.
  • e.g. _balance output_ = user_balance - user_balance * demurrageModifier
• Edge case: approve call, which may be called on either side of a period.

Redistribution

• One redistribution entry is added to storage for each period;
  • When mint is triggered, the new totalsupply is stored to the entry
  • When transfer is triggered, and the account did not yet participate in the period, the entry's participant count is incremented.
• Account must have "participated" in a period to be redistribution beneficiary.
• Redistribution is applied when an account triggers a transfer for the first time in a new period;
  • Check if user has participated in period. (active user heartbeat)
  • Each active user balance is increased by (total supply at end of period * demurrageModifier ) / number_of_active_participants via minting
  • Participation field is zeroed out for that user.
• Fractions must be rounded down (TODO)
  • Remainder is "dust" and should be sent to a dedicated "sink" token address (TODO)
  • If no one is active all taxes go to the same sink address

Data structures

• One word per account:
  • bits 000-159: value
  • bits 160-255: period
  • (we have more room here in case we want to cram something else in)
• One word per redistribution period:
  • bits 000-055: period
  • bits 056-215: supply
  • bits 216-253: participant count
  • bits 254: Set if invidiual redistribution amounts are fractions (TODO)
  • bits 255: Set if "dust" has been transferred to sink (TODO)

QA

• Basic python tests in place
• How to determine and generate test vectors, and how to adapt them to scripts.
• Audit sources?