SINOVATE Governance Proposal
Block Reward amendments for future funding and project prosperity
The purpose of this article is to discuss proposed changes to the distribution of SINOVATE (SIN) block rewards. As voted by the SINOVATE Community, the Treasury Reward was due to increase to 11% of each block reward. However, in order to reduce emission levels, the SIN Team decided to change this figure to 10%, bringing total reward allocation to the following:
3000 SIN / block:
2750 — Infinity Nodes
250 — Proof-of-Work (PoW)
+330 — Treasury
This means that a total amount of 3330 SIN is minted every two minutes. While the SINOVATE Team plans to use Treasury Funds for continued development of the project, increases to coin inflation must be addressed. We are proposing the following solution to address this issue:
- Reduce the PoW reward from 250/block to 25/block.
If implemented, reward allocation would change as follows:
2775 SIN / block:
2750 — Infinity Nodes
25 — PoW
+277.5 — Treasury
Therefore, 3052 SIN in total would be minted every two minutes, representing a 10% decrease in inflation rate from current projections. The SINOVATE Team believes this reward change positively impacts our project by ensuring continued stability, encouraging growth and enabling SIN to remain a competitive player within the crypto sphere long term.
As a general rule, implementing a higher PoW reward allows mining farms to accumulate a large number of coins, without investing into a project. These coins are often dumped on the market, resulting in depreciation of coin value. For SIN, reducing current rewards will result in the majority of minted coins coming from Infinity Nodes, which require significant investments in order to generate rewards.
Also, since the collateral used to run an Infinity Node is burnt, an increased node count will equate to a lower coin supply. A rule of basic economics is that supply and demand are the primary factors in determining value. Since more nodes will be running and a greater amount of coins burnt, less SIN will be in circulation and a higher price per coin will result. Should the proposed change pass the Community Vote, the effect on coin economics will be two fold: those seeking to make a “quick buck” will be unable to dump their PoW mined coins on the market risk free, and the overall coin supply will be reduced.
With the PoW reward being reduced to 1/10 of its current value, the total SINOVATE network hashrate will also be 1/10 of its current state. Reduction in network hash comes with its own issues, increasing vulnerability as well as the likelihood of 51% attacks. In order to counter this potential vulnerability, we are in the process of implementing Ravencoin’s (RVN) Reorg Solution. Having carried out extensive research, this was found to be an ideal measure to further secure and protect the SINOVATE Network on an on-going basis. In-depth details regarding our decision to integrate the RVN Reorg Solution will be provided shortly.
The SINOVATE Team believes this reward change will strengthen our community, significantly benefit current and future investors as well as enhance overall prosperity of our project moving forwards. That being said, it is up to the community to approve this change. The community is the cornerstone of this project and our team will only proceed with the above plans upon receiving its full backing and support.
Please cast your vote via the SINOVATE Discord Voting Channel.
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Author: Amit Kaushal