What’s Happening?
In an ongoing effort to optimize the RAE ecosystem, a new tool has been developed to increase minting efficiency and automatically handle edge scenarios that could occur as the network grows.
Recap
The RAE Ecosystem has radically transformed the way in which content creators are compensated. Simply put, it is the only platform that transmits the full value to those who generate it- the creators. This is made possible through the RAE token.
Value is transmitted through the RAE token because of two key features: burn and mint. The burn function is relatively easy to understand. For every dollar that the platform receives, the equivalent amount of RAE tokens are burned. This decreases token supply, making the tokens held by creators more valuable.
How Minting Works
The RAE ecosystem’s goal is to accurately and efficiently reward value created within the network. The methodology to reward this value is the RAE mint. Each RAE mint contains 10,000 RAE tokens, 7,200 of which are distributed to the content creators whose content helped acquire and/or retain customers since the last mint. RAE mints are targeted at once per day. You might be asking yourself what does “targeted” mean? Great question.
Mathematically, it is the rolling median of the previous 30 minting period’s duration to hit the previous mint targets. Or, in simpler terms, the average day’s worth of work is what is required to trigger a mint. ‘Work’ is measured in dollars entering the network, making each RAE token representative of real monetary value.
For every subscription to the network, RAE tokens must be burned at a dollar to dollar value. This means that if a subscription is $10 and RAE tokens are trading at $0.50 on the open market, 20 RAE must be burned per subscriber (Network metrics further explained).
Each mint generates a block fin number based on the duration to hit the mint target looking at subscription revenue charged within the network. To determine the mint target, the last 30 block fin numbers that correspond to the last 30 mints are tabulated.
This block fin number for each new mint is calculated:
(Median Block Fin for previous 30 mints) / (days to complete mint)
Simplified Example:
If the median block fin for the last 30 mints is equal to 100 subscribers (assuming one subscription price point), and two days were needed to complete the mint period, i.e., to charge 100 subscriptions, that mint period’s block fin data point is (100 subscriptions) / (2 days), or 50.
The new mint target is determined with the new data point added to the dataset of the previous 29 block fin numbers. The 31st block fin number is removed from the dataset. The new dataset’s median is found and a new mint target is established.
The Need for Surge Protection
This mint process works elegantly for the vast majority of expected scenarios. However, there are a few realistic edge scenarios where a surge protector is needed. One scenario is a flood of new subscribers.
If a large surge of subscriptions happens in a short period of time, then too many mints could be triggered in a very short period of time, creating block fin data points that are outliers. If this happens too many times in a row, the minting target could skew and the result could be mint targets that take weeks or even months to hit. This result would be an inefficient distribution of value and, frankly, a bad user experience for creators on the network as they wait to be paid. The mints are targeted to happen roughly once per day so that all creators are compensated consistently and fairly.
How the Surge Protector Works
The surge protector solves this potential issue by distributing a massive influx of subscribers over multiple minting periods. This process gives the minting schedule time to adjust in a healthy way instead of ‘shocking’ the system.
This edge scenario can better be balanced with a surge protector and a corresponding process. That process is:
- Recognize Surge — 5 mints are triggered in a row at 10x the current target, i.e., 5 mints at 0.1 days each
- Engage Surge Protector — Minting is halted for 24 hours. Note: This isn’t problematic as the system is already far ahead of its 1 mint/day schedule. Halt in mints allows the full cohort of the surge to enter the system, giving the network a full picture.
- Distribute Surge — Distributing subscriptions charged during the halt window over the subsequent blocks
The result is that the surge does not damage the system, but instead rewards value in an efficient way. The surge protector guards the interests of all creators by ensuring the consistency of the minting system which is of the utmost importance to creators building recurring revenue streams from their content.
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