The information is from the official document translation: https://docs.ierc20.com/new-features/pow-and-dpos
Economic Model
This update will see the IERC official and a third party jointly release an inscription token, whose economic model is very interesting.
Features: large total volume, long output cycle, linear halving output, deflation mechanism, 100% produced by DPoS&PoW mining, and enabling ecological applications.
IERC combines elements of PoW and DPoS. The protocol sets a total supply of 21 billion tokens, with PoW and DPoS each accounting for half of the supply. Both are gradually released as Ethereum's mainnet blocks run, and the tokens produced by both are the same, and the two production threads do not affect each other.
In the IERC protocol, the distribution of mining rewards follows a clear halving cycle. The initial reward for each block is 500 tokens, and then the reward is halved every two years. After the fifth year, the output is kept at a constant rate, about 3.125% is released each year, and a total of about 24 years can be mined. This mechanism is designed to maintain the value of tokens in the long term and encourage miners and users to participate in the ecosystem for a long time. In addition, the protocol also introduces a difficulty weighted method to ensure the fairness of PoW output.
In addition, the total output of tokens is not fixed, because the token will also have a destruction mechanism and a deflation mechanism.
It is crucial for strategic miners to understand and exploit this economic model. In the early stages of mining, the focus should be on PoW, as the rewards are higher and competition is relatively small. Over time, miners should gradually transition to DPoS, as this will provide more stable and predictable returns. With this strategy, miners can maximize their earnings.
The following sections will gradually analyze PoW and DPoS, both of which contain rich game theory strategies.
PoW - Basic Concepts
IERC PoW is the first and only implementation of the PoW output concept in the Ethereum Inscription Protocol. The protocol has a complete trading market and a large consensus user base. Under the current market conditions, unrestricted inscription acquisition will discourage potential users, resulting in concentrated initial distribution, which is not conducive to the long-term development of the project. At present, IERC PoW output assets are fully compatible with the trading mechanism of the IERC20 market and can be traded freely.
🚂How to mine
In the first phase of Base PoW, IERC created a basic version based on calculating mintHash to determine whether it is successful. It has been online for several months. I believe everyone has a certain understanding of the gameplay. If you still want to review it, you can check the official documentation:
https://docs.ierc20.com/new-features/pow-and-dpos/ierc-pow/how-to-mint
Regarding the second phase of CLI, the official also released a new program:
https://github.com/IErcOrg/ierc-miner-js
Note: In order to ensure the security of user private keys, the official recommendation for Phase 2 is to use CLI to participate, so the web page is not open. If you use a third-party CLI, please be careful not to use potentially problematic mining programs, and use a small account with a small amount of funds when participating in mining, and never use an account with important assets.
Strategy game is the second stage of Advanced PoW, which is an advanced version of the first stage. To be precise, it is a gameplay based on difficulty weight game.
First, let's introduce the difficulty and the corresponding weight and reward distribution. The official difficulty is divided into m4-m64 levels, where m4 means mintHash starts with "0x0000", m6 means mintHash starts with "0x000000", and so on. Each difficulty corresponds to a different weight, with m4 difficulty as weight 1, m5 difficulty as weight 10, m6 as weight 100, mx difficulty weight = m^x=4, and so on. You need to compete with other users who participate in mining in the same block for weight.
If you are the only miner in a block, as long as your difficulty is greater than m4, you can get all the rewards of the block, that is, 500 tokens. If there are multiple competitors in a block, they need to share the block rewards according to the difficulty weight, the formula is: your weight / current block total weight * 500. If no one is mining in a block, the block reward will be accumulated to the next block. If you are lucky enough to encounter this situation, you may mine out the rewards of multiple blocks at once or share them with several people at the same time. But this reward will not accumulate all the time. You can only mine the maximum reward of 5 blocks at most, and the extra block rewards will be destroyed.
After understanding these basic concepts, we should then formulate a game strategy that suits us to obtain the maximum benefit in the game:
1. Try to participate in mining when there are fewer people, because in a block with fewer people, it is very likely that you can share the reward of the block alone.
2. You can mine every few blocks, so that you can get the maximum block reward at one time and save gas fees to the greatest extent.
3. Choose the appropriate difficulty according to your device. You can choose a high-difficulty challenge when everyone's computing power is generally low, so as to get a lot of rewards.
4. You can try mining when the gas is extremely high or extremely low. In the case of extremely high gas, there are fewer competitors, and in the case of extremely low gas, you may not be able to monopolize the block reward, but the gas consumed is very little.
The above are some of the techniques of the game. However, when multiple people use these techniques, their effects will vary depending on the situation, which is the most exciting part of the game.
DPoS - Basic Concepts:
In the DPoS system, mining output is entirely determined by the user's DPoS points. When performing a Mine operation, the user needs to select the number of points to be consumed and pay the Gas fee to add the transaction to the blockchain.
If you want to participate in the production of new DPoS inscriptions, you must first accumulate DPoS points. Currently, you can generate them by staking $ethi. In the future, there will be more tokens and staking durations to choose from, each with a different production speed. Please pay attention to the official announcement for specific information.
Experience DPoS at IERC Staking (https://www.ierc20.com/stake) and learn more through the official guide.
💰Mining rules:
The degree of gambling in DPoS mining is no less than that of PoW. It is a weighted game based on point consumption.
DPoS points represent the computing power that DPoS users can use for mining. This computing power is replenished through staking and is consumed every time mining occurs. Official regulations stipulate that the points used in a single mine determine the mining weight: 1 point is equivalent to 1 weight, and so on.
💻Common Misconceptions:
1. Accumulating more points does not guarantee more rewards, and having fewer points does not mean fewer rewards.
2. In a single mining, using more points will increase the block weight, but since the reward for each block is capped at 500 tokens, excessive consumption is not beneficial.
In each block, you need to compete with other miners for rewards. If multiple miners participate, the rewards are distributed according to the points weight. If a block is not mined, its rewards will be accumulated to the next block, but there is an upper limit to the accumulation of rewards, which is a maximum of five blocks of rewards. The excess will be destroyed.
In each block, you need to compete with other miners for rewards. If multiple miners participate, the rewards are distributed according to the weight of the points. If a block is not mined, its rewards will be accumulated to the next block, but there is an upper limit to the accumulation of rewards, which is a maximum of five blocks. The excess will be destroyed.
🤖Strategy Game
After the basic concepts are clear, now is the time to develop strategies to maximize gains, which requires patience and wisdom.
1. Off-peak mining: Low competition periods mean higher chances of exclusive rewards.
2. Interval mining: You don’t have to pursue every block. You can conduct a high-weight challenge every few blocks. This way you can save gas fees while getting a larger reward.
3. Adjust difficulty based on hashrate: When most miners choose low difficulty, choose high difficulty to get large and infrequent rewards.
4. Gas fee strategy: Mining during periods of high gas fees reduces competition; mining during periods of low gas fees saves costs. The potential rewards and expenditures must be balanced between the two.
5. Risk diversification: Diversify mining activities into multiple small accounts to reduce the overall impact of security incidents.
6. Trend observation: Be alert to community dynamics, adjust strategies in a timely manner, and avoid fighting in a crowded mining scenario.
7. Technological advantage: Continuously update mining software and hardware to maintain competitive advantage.
Keep in mind that these strategies may work differently when they are widely adopted, and adaptability is part of the excitement of the game.
Through these strategies, miners can not only obtain higher returns in the short term, but also achieve sustainable profit growth in the long term while reducing potential risks.
