What Is 2Ether
2Ether is a new digital coin based on the Ethereum blockchain. Unlike ERC20 tokens, it's a fully independent cryptocurrency – with its own blockchain, mining incentives, and so forth. It fully supports smart contracts written in Solidity and is compatible with Ethereum dApps.
The team of 2Ether has several main objectives:
Encourage independent CPU/GPU miners and protect them from the dominance of mining farms that use ASIC hardware. This is particularly important now that block rewards in Ethereum have been cut by a third, and market prices are still quite low. Ethereum mining stopped being profitable, pushing small miners out of the market. We realize that inflation can be a problem for any cryptocurrency, so rewards should be reduced with time. But it's not correct that ASIC farms survive in any market conditions thanks to their economy of scale, while GPU miners suffer. 2Ether solves this problem thanks to its innovative system of dynamic block rewards. The base reward is slowly reduced with time. At the same time, it's dynamically adjusted for current price. Finally, miners with a low hashrate receive an additional increase.
Provide dApp developers with an affordable audit tool. Smart contract audit is very important, as it helps protect investors' funds. Unfortunately, blockchain security firms charge very high fees even for the simplest audit, and many of these firms don't render quality services. On 2Ether, projects can apply for free audit – a combination of automated testing and manual reporting, done by specially vetted members of the community. There's also full paid audit with line-by-line code analysis and multiple reports.
Create an IEO platform integrated with a decentralized exchange and the audit system. IEOs are becoming very popular and will probably replace ICOs. They are much more secure, because projects are vetted by an exchange first. However, exchanges often charge hundreds of thousands of dollars for an ICO, without providing any guarantee of success. 2Ether will offer a decentralized IEO platform where the community does all the evaluation of projects, and all fees are distributed among users. It will be possible to arrange and launch an IEO in just a few days. The new token will be automatically listed on the 2Ether decentralized exchange. Before the IEO, projects can order a smart contract audit on the same platform.
These innovations will take some time to implement. The 2Ether coin will be launched on December 2, 2019 and at first will use the standard PoW mining algorithm with fixed rewards. Nine months into the project, the network will switch to dynamic reward calculation. The decentralized exchange and contract audit functionality will be launched soon after, followed by the IEO platform.
To promote the project, 2Ether will hold a large-scale airdrop among Ethereum holders. After a snapshot of the Ethereum network on December 2, 2019, everyone who has any ETH in a personal wallet will be able to get 1 ET2 for each ETH they have. Since it’s an airdrop, users won’t be asked to send or exchange any ETH. ET2 coins will be sent automatically.
Dynamic Block Rewards
In the first stage of the project, 2Ether miners will receive a fixed reward of 5 ET2 per block, with the average block time of 60 seconds (1440 blocks every 24 hours). Thus, circa 7 200 ET2 will be added to the system every 24 hours. At the block height of 388 800 (roughly 9 months after launch), the dynamic reward system will kick in. This section first describes the overall problem of the reduction of block rewards. Next, we describe the solution offered by 2Ether, which will keep inflation low and stable and incentivize small miners and stakeholders.
The Problem Of Decreasing Block Rewards
One of the most debated issues surrounding Ethereum is the size of the block reward. For miners, block rewards are the main source of income. On the other hand, it's also the only source of new coins on the market. The number of ethers (Bitcoins, etc.) in circulation is constantly expanding, because miners sell the coins they receive as rewards. This is a source of anxiety, because a currency like Ethereum is inflationary by nature. Some people feel that the normal laws of supply, demand and inflation don't apply to cryptocurrencies, because the demand is growing very fast that it will readily consume all the available supply. However, if the supply grows beyond a certain limit, the price of ether (or any other mineable coin) can start falling.
The most obvious solution is to reduce the number of new coins entering they system. The way to achieve this is to cut the block reward size. However, this will also mean that miners obtain fewer new coins. If the price doesn't rise considerably and the energy costs remain the same, the miners' income will fall. This is a particularly serious issue for small independent miners who use CPU and GPU devices and not ASIC chips. A large mining farm will survive thanks to its economy of scale, even if the price of a coin falls. But a small GPU miner's profit can fall to zero and even below zero. So any reduction in the size of a block reward will push small miners out of the market.
In the Bitcoin network, the block reward is automatically reduced by 50% after a certain number of blocks (this is called halving). This means that twice fewer new BTC enter circulation. In the past, each halving led to a spike in price, so that mining remained profitable for many. In Ethereum, there is no automatic mechanism to reduce the block reward. As Vitalik Buterin and others considered inflation to be a serious issue, the Ethereum Foundation eventually made the decision to reduce the reward from 3 ETH per block to 2 ETH. This was known as the thirdening and was introduced by the Constantinople hard fork in January 2019.
The Solution From 2Ether
A large part of the Ethereum community was unhappy with this decision. Since the price of ether didn't show such a strong growth in 2019 as the price of BTC, life became much harder for CPU and GPU miners. This is one of the reasons behind the creation of 2Ether. Our goal is to make sure that all members of the community can profit from mining – and that those who do most for the network earn most. The dynamic reward scheme proposed by 2Ether consists of 3 elements: base rewards as a function of the current supply, adjustment for price and increased rewards for independent miners.
2EtherEX – A Decentralized Exchange By 2Ether
Between January and September 2019, over $1 billion was stolen by hackers from centralized exchanges. Security risks are pushing more and more investors to switch to decentralized exchanges (DEX). These platforms don't yet allow to cross-blockchain trades, and offer limited liquidity. But they are extremely secure and private. On a DEX, clients don't send their funds to the exchange but place them in a smart contract. The only person with access to the money is the owner of the secret key. The only way a hacker can steal their crypto is by getting hold of the key – for example, through phishing. But there is no way to attack the exchange itself.
2Ether will introduce its own decentralized exchange 2EtherEX to complement the IEO platform. Any new token can be listed on 2EtherEx in just a couple of days and with a minimal fee. Here are the steps that a project will need to follow:
Upload all the documentation – White Paper, website, social media channels, GitHub page, team profiles on Linkedin and Twitter, technical paper, smart contract audit, tokenomics, etc. If the project previously ordered a smart contract audit on 2Ether, this step can be skipped.
If an ICO/IEO already took place on another exchange or independently, the results must be added, too. If the project held its IEO on 2Ether, this step can be skipped.
Staking of the listing fee (equivalent of $300); it's placed into escrow.
The community evaluates all the materials and either approves or rejects the project. Only high-quality tokens with a good growth potential will be added. Essentially users will accept those tokens that they would trade themselves. Not all members can evaluate tokens: it's necessary to have a stake in ET2 tokens to become an official verifier.
If the project is approved, the listing fee is distributed among the verifiers and the project team gets access to their listing dashboard.
The founders can choose the listing date and time and the initial price. The community will be automatically notified that a new token has been added.
Trading begins.
For those teams that held their IEO on the platform, the procedure is much shorter. The listing fee is waived completely, and the token is listed the next day after the IEO at the IEO price. The following categories of projects will be preferred for listing: IoT, AR/VR, AI, cross-chain payments and blockchain interoperability, escrow & custody, identity verification, medical tech, information security, consensus optimization, and other projects that can benefit the industry as a whole.
Project types that will be discouraged: high-risk, gambling, betting. 2EtherEX, like any other DEX, provides a matching engine and a graphic interface to facilitate trading. But the actual trades don't depend on the exchange – they are completely decentralized. 2EtherEX completes the full suit of tools for project teams offered by the platform. A blockchain project should start with a smart contract audit, proceed with an IEO, and finish with a DEX.
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