Interpretation of the realization of DW20 decentralized standard currency

Decryption White Paper Series

As the airdrop approaches, we have begun to publish DW20 white papers, chainless white papers, and comments from experts. The knowledge span of cryptocurrency is enormous. Based on our learning experience, we have launched a white paper series with various authors and perspectives. There will always be one that suits you. There are five versions of the DW20 white paper; there are two versions of the chainless white paper, suitable for different readers. We will publish them starting with the most readable version. Interspersed with commentaries.

Written in front:

Xiuwu is my colleague at the Institute of Industrial Economics, Academy of Social Sciences. In the 1980s, the Institute of Industrial Economics was full of talented people. Mr. Ma Hong, Mr. Jiang Yiwei, and Mr. Du Peirong had all passed away, and the only surviving ones, Mr. Zhu Rongji and Mr. Wu Jiajun were over 90 years old. My respected leader, Mr. Wu Jiajun, was an independent director of my Hong Kong-listed company (8005) from the beginning until my departure. We were young then and learned to behave and do things from our predecessors.

Xiuwu has no blockchain background. The DW20 white paper does not explain the technology’s basic concepts, which is difficult for him to understand. He sorted out and annotated the basic concepts of my article, trying to understand it by himself. This article is his reading notes. The original paragraphs are kept and abbreviated. During this period, he kept discussing with me when he encountered problems he didn’t understand. The writing is excellent so that readers with neither financial background nor cryptocurrency can be used as an entry point reading material.

ALTHOUGH I KNEW ALL THE WORDS when I read the Bitcoin white paper for the first time, I couldn’t understand it because it was completely different from traditional cognition. The analysis of multiple Bitcoin white papers enlightens my thinking, and the interpretation of Xiuwu helps the starter understand the DW20 white paper.

The knowledge span of cryptocurrency is too large. Based on our learning experience, we have launched a series of white papers with various authors and perspectives. There is always one suitable for you.

Wish Weisha July 20, 2023

Table of contents

Xiuwu Note: The content of the DW20 Decentralized Standard Currency White Paper is vibrant, and the professional level is also very high. From my understanding, I have excerpted or abbreviated the full text and added some of my analysis and experience. Because I only have the level of a beginner, mistakes are inevitable. For relevant errors, please correct me, and the original text of the white paper shall prevail.

Chapter 1 The realization logic of DW20 decentralized standard currency

Introduction

We will issue a decentralized currency called DW20. We have every reason to believe that with the birth of the distributed DW20 standard currency, the Bitcoin standard will be further promoted, and the Bitcoin standard will become the second phenomenon-level hotspot in the currency circle after the invention of Bitcoin.

Analysis: The introduction reviews the entire DW20 white paper, and there are many core concepts that beginners cannot understand. Only after understanding this passage can we fully understand the significance of DW20. The critical ideas in the first paragraph include decentralized stable currency, decentralized standard currency, bitcoin standard, and the second phenomenon-level hotspot.

Distributed and decentralized:

In cryptocurrency, distribution, and decentralization have the same meaning; that is, there is no central point of structure, and there is no absolute power. Instead, the bank is a structural central point.

The question is, how can there be an order without a center? We have lived in order since we were young, with centralized thinking in our minds. The central thought is that centers are within centers and ultimately need centers to save them. Our educational model has given us the illusion that there is a master who can arrange everything for us. God, Father, Mother, Son, Holy Spirit, etc. However, the ultimate evolutionary result of the center will become formless again—there is no center. For example, God is invisible. If you believe in him, it is a kind of power. If everyone believes in him, it will form a torrent and mobilize people’s illusions—people’s hearts.

All our orders and centers are not avenues; what is an avenue? The great road is invisible, said that it is the law of nature, and people have no strength to struggle against the laws of nature. Distributed and decentralized means relying on natural forces. Bitcoin embodies this kind of avenue of thinking. Believe it is a torrent that can mobilize people’s hearts. If you don’t believe it, it isn’t very worthy.

Believers in Bitcoin turned Bitcoin into a Bitcoin religion, and they worshiped Satoshi Nakamoto. That is the result of the backward centralized thinking in the bones, and it also violates the original intention of Satoshi Nakamoto. Satoshi Nakamoto wanted to be a commoner, and Satoshi Nakamoto was just a symbol of the times. “These people also work part-time and set up companies but don’t want to be drunk. These people often put their favorite works directly on the Internet, which is open and free. The vanity hidden behind their noble faces is: how many people use my stuff? Another kind of people gives people the image and behavior of hackers. They all like hiding from the sight of traditional society and living without being disturbed. The quote is Satoshi Nakamoto’s father’s evaluation of this type of person.

Satoshi Nakamoto, who originally wanted to decentralize, was devastated by centralized thinking. It is impossible will be ordinary people, and it is impossible will be gods. Decentralization is correct, and centralization is also correct. The key is how to use it and under what circumstances. Cryptocurrency must be called Blockchain as if only using Blockchain is decentralized. Mr. Zhu Weisha said: “Blockchain is a decentralized technology, but its scope of application is very narrow. We are in the era of airplanes and rockets. There must be places where we need to ride bullock carts, but not many.” In my opinion, using Satoshi Nakamoto’s ideas to transform blockchain projects is the core idea of Mr. Zhu.

Mr. Zhu said the Blockchain is still in his project, but it only records the journal in a corner.

Decentralized stable currency

What are stablecoins? It needs an anchor object; the most common is the U.S. dollar, which cannot have a large price difference from the U.S. dollar. Its price must remain stable with the anchor object, such as USDT or Hong Kong dollar. Maintaining stability is not an easy task. This type of stablecoin has a central institution that strives to keep its stability through adjustment means. In contrast, the decentralized stablecoin does not have such an adjustment institution but still needs to maintain price stability between the stable currency and the anchor object. A challenging thing.

Decentralized standard currency

We can easily make rulers and scales to measure the size and weight of tangible items. The physical characteristics of objective objects are relatively easy to measure, so how to measure the characteristics of subjective objects? Subjective objects represent personal opinions, and different opinions also mean different needs. Because of different needs, there is an exchange, and barter comes into being. Bartering requires a standard. As a “scale” or “ruler” in exchange, it can measure the object’s intrinsic value. This “scale” or “ruler” is the standard, also called the standard currency. Renminbi is China’s legal standard currency, like the bucket, ruler, and catty in Chinese units of measurement. If it is in the world, it is conditional for others to recognize the renminbi. At least RMB must be able to freely trade in the foreign exchange market, commonly known as secondary market transactions. Transactions determine the price of a currency. The currency with the largest amount of settlement among the international standard currencies is the U.S. dollar, and about 40% of the settlements are based on the U.S. dollar as the yardstick, so the U.S. dollar has become the ruler for international goods settlement, that is, the global currency ruler. Even if the U.S. dollar is not used as the medium of exchange, the U.S. dollar should be used as the trading yardstick.

The standard currency has three attributes: stored value, transaction medium, and settlement ruler.

An excellent standard currency must have at least three characteristics: secondary market pricing (that is, foreign exchange market pricing), free flow, and large trade settlement volume. The U.S. dollar, the euro, and the British pound are internationally recognized settlement standards, so they are all distributed standard currencies.

bitcoin standard

The original intention of developing Bitcoin was to use Bitcoin as the standard currency. The earliest famous saying, “one bitcoin is equal to one bitcoin,” in the cryptocurrency circle was to use bitcoin to measure global goods and assets, but this eventually became a joke. The current positioning of Bitcoin is not a standard currency but only a stored-value currency. It lacks an important feature in the definition of currency – the ruler and DW20 is the ruler of Bitcoin. BTC+DW20 together can realize the three characteristics of the standard currency. In this way, the combination of Bitcoin and DW20 forms the Bitcoin standard. That is not a fantasy but a summary and innovation of more than ten years of cryptocurrency practice, and it is feasible.

The second phenomenal hotspot

DW20 may be the product with the second largest market value after Bitcoin in cryptocurrency and may become the second hottest product, and its development ideas are the same as Bitcoin. The market can create Bitcoin, and it will also make DW20. Together, the two provide a measure of global wealth. It is a measure of a hundred trillion of wealth, which will be realized with the blessing of natural forces. There should be no second product with such a clear development idea in the cryptocurrency market for over ten years.

This solution is another implementation based on the Bitcoin dollar standard, and the method adopted is also in line with the spirit of Bitcoin. It does not rely on the government, does not rely on Satoshi Nakamoto, and does not require any distribution center. Therefore, it has a clear mass foundation and sufficient realizability compared with the Bitcoin USD scheme.

Analysis: For the original text of the plan, please refer to Bitpush (https://www.bitpush.news/articles/3398219). The article says that DW20 comes from the Bitcoin dollar standard, but the Bitcoin DW20 standard is formed by replacing the U.S. dollar with DW20. This plan is an improvement on the original method, and it will be realized entirely by market forces, making the original project feasible.

Specifically, DW20 differs from previous stablecoins in adopting a market pricing mechanism. This mechanism is the same as used for pricing in dollars, euros, etc. DW20 does not have an issuing body similar to the Federal Reserve, and it is issued in a distributed manner like Bitcoin. At present, none of the stablecoins issued in the cryptocurrency field have the conditions to become the standard currency, and the legal currency is not necessarily the standard currency, such as the Hong Kong dollar or the renminbi are not.

Analysis: The U.S. dollar has an issuing department, the Federal Reserve, but the U.S. Federal Reserve does not price the U.S. dollar. The pricing of U.S. dollars is distributed; that is, the market sets it. DW20 does not have an issuer like the Federal Reserve. It mainly relies on mortgage issuance to correspond to the amount of currency settlement in international trade, and it can issue as much as it needs. Initially, the 210 billion DW20 airdropped is not a fraction of the total amount. Therefore, whoever gets the airdropped DW20 is the lucky one. The key is whether you believe it or not. At that time, Laszlo had more than 80,000 bitcoins, but he did not believe that bitcoins would appreciate significantly in the future, so he sold out and passed away from wealth. Cognition determines a person’s wealth, and airdrops are gifts. Its value From the first cycle of the valuation 0.0004 cents will go to 1 U.S. dollar. The stability mechanism designed by Mr. Zhu is to hope that more people will realize the myth of creating wealth and fewer sad stories.

We also designed a chainless financial platform. It uses the idea of transparent centralization to present the characteristics of a decentralized and distributed structure. Furthermore, the chainless platform also solves the problems of privacy classification and privacy decisions that are not resolved by the anonymous system. Through this platform, we use the BRC20 protocol and the smart program (advanced smart contract) of the chainless platform to issue and make DW20 an example of the smart program application of the chainless transparent centralized platform and become the basic application of the chainless system ( Note: For the concept and explanation of the chainless platform, please refer to the chainless white paper).

Analysis: The current cryptocurrency platforms are unsuitable for issuing DW20 standard currency, and the chainless platform is the best. DW20 will be a tool for settlement, transaction, and payment on chainless platform. The reason why cryptocurrency platforms are not suitable for doing this is that on other platforms, the “cashiers” who are responsible for bookkeeping take too much money, and almost all the “profits,” while the users paid handle fee is sky-high compared with Alipay, etc.

Society has paid a small fee for cryptocurrency experiments, proving Bitcoin’s feasibility. Now it is equipped with DW20, or it will start a new journey and write a new chapter.

1. Brief introduction of the DW20 standard currency scheme

The DW20 program has many creative features; here is a summary as follows (Note: When reading this paragraph for the first time, there must be some difficult content to understand, and you can get specific understanding and answers in conjunction with the Analysis in the following text. For detailed explanations, please refer to “Implementation of DW20 Decentralized Standard currency” article.):

1. Brief introduction of the DW20 standard currency scheme

The DW20 program has many creative features; here is a summary as follows (Note: When reading this paragraph for the first time, there must be some difficult content to understand, and you can get specific understanding and answers in conjunction with the Analysis in the following text. For detailed explanations, please refer to “Implementation of DW20 Decentralized Standard currency” article.):

The formation of the DW20 consensus is divided into three stages:

Phase 1: the discovery of value and the construction of consensus, that is, the memecoin phase;

in the first phase, we will airdrop DW20 coins. With the expansion of the consensus, DW20 will gradually stabilize at a level of about US$1 per DW20 coin;

Phase 2: The stable phase of the consensus, that is, the stable currency phase; in the second phase, the price fluctuation of DW20 will gradually be smaller than that of the US dollar;

Phase 3: The solidification stage of the consensus, that is, the standard currency stage. DW20 will become a commodity ruler in the third phase to replace or compete with the U.S. dollar. The stored value of Bitcoin is combined with the ruler value of DW20 to realize the Bitcoin standard together.

Analysis: In this passage, the division of the three stages is the essence of DW20’s decentralized currency design. The first stage is developed similarly to Bitcoin, but the story is smoother than Bitcoin back then. The story of Bitcoin has gone through many rounds of evolution, and finally, Bitcoin is positioned as a store of value. In the early stage, people thought that the direction of Bitcoin to the Bitcoin standard should go, but the trading pairs based on the Bitcoin standard designed in the early years all failed. Now, DW20 has found its way to the Bitcoin standard, which is a fascinating and logical story.

Meme coins are also air coins with no apparent use value, supported by future narratives, bitcoin started as a meme coin as well, and now yes, the use is for stored value, out of the meme coin phase. Stabilized coins are precisely anchored coins, using a fiat currency as the anchor, for example, anchoring the dollar. Standard currencies are the Ruler currencies, i.e., the pricing unit. Not all fiat currencies are standard coins, only those that serve as pricing units. China and Russia still trade in US dollars, and the fiat currencies of China and Russia are all mediums of exchange, not standard currencies.

DW20 does not have a central body control and maintenance team but has a community decision-making mechanism.

Like the Bitcoin system, the DW20 system is not central. DW20 acts as a medium of exchange and a ruler. The DW20 system itself is not profitable.

The demand side and supply side of the currency use DW20 as a trading medium and unit of account.

The airdrop of DW20 generates the basic fund, similar to the bank’s capital. That provides the financial security of the system and addresses issues of system resilience and early system vulnerability. This design comes from the observation of the large fluctuations in the fees of Ethereum and Bitcoin. It is a transaction defect in the cryptocurrency system, and laying basic fund is the fundamental solution.

DW20 has designed a stable fund to form a market-making fund. The goal of the market-making fund operation is to make DW20 grow steadily and gradually and make DW20 transition to the standard currency smoothly. In addition to airdrops, DW20 issuers also include Bitcoin mortgagors. They are the maintainers of the financial stability of the DW20 system and the beneficiaries of the DW20 system. Gains come from balancing the growth in DW20 demand. That is significant because anyone’s assets, such as stocks, can be chained. Anyone can lend money, and the interest is low.

Analysis: The airdrop is to gather people first to solve the problems of elasticity and vulnerability. This method is very delicate, and when proposing these concepts and methods, he cannot do it if the designer himself does not have profound academic skills. I asked Mr. Zhu: How did he come up with these things? He said modestly: “I don’t have academic ability. I do this work by first observing and then thinking deeply. One of the missions of entrepreneurs is to find solutions.”

DW20 will be imported to the chainless platform after release. This highly secure circulation and settlement platform can turn all current blockchain single-signature wallets into multi-signature and multiple backup wallets. The individual controls this kind of wallet, which can be inherited, making the security of personal assets exceed the current level of banks.

When DW20 becomes the standard currency, there will be no charge for transfers of less than 1 DW20 on the chainless platform. That solves the micropayment problem proposed by Satoshi Nakamoto. Its transaction speed is comparable to that of centralized payment systems.

DW20, the Bitcoin system, and the chainless system constitute the Bitcoin-based financial system. That will make Bitcoin not only have value storage but also have ecological value. This value must eventually be reflected in the price of Bitcoin.

DW20 is not tied to any national economy. It is independent of what is being measured and can objectively measure economic value. The same is true of Bitcoin. Is a fiat currency an objective measure?

We will explain the plan in more detail below.

2. BRC20 and micropayments

2.1 Match BRC20 project with smart contract

Ethereum has smart contracts and adopts the ERC20 standard, while the Bitcoin system has BRC20 similar to ERC20. BRC20 stipulates the name, circulation, transfer, etc., of issued tokens, but the disadvantage is that it does not support smart contracts. The chainless system is a transparent centralized platform with smart programs (advanced smart contracts) and multi-signature multi-backup wallets (see chainless white paper) than smart contracts and more powerful. At the same time, smart programs are more flexible than smart contracts, and the transplantation of existing smart contracts will be very easy. It can also turn all current blockchain single-signature wallets into multi-signature and multi-backup wallets. Cooperating with the succession procedure set by it, the security of personal assets exceeds that of the existing banks.

Analysis ERC20 is the standard for the Ethereum system to issue tokens using smart contracts. We can think of smart contracts as vending machines. The critical concept here is the smart program of DW20, which not only retains some advantages of smart contracts but also makes up for some shortcomings. It has a high degree of design flexibility.

Bitcoin is anonymous; how to confirm that the money on a specific Bitcoin address is yours? That mainly relies on the public key private key encryption system. The Bitcoin system will verify your private key to determine whether you own an address. Multi-signature refers to the need for multiple people’s private key signatures to verify the ownership of the address. Obviously, multi-signatures have a higher security level.

2.2 Using the BRC20 protocol to realize micropayments

What we call micropayments are payments similar to WeChat Pay and Alipay. This kind of payment requires both fast and low handling fees. It will be too expensive if people put micropayment settlements on the Bitcoin system layer. The chainless system can be used as the second layer of the Bitcoin system, and through the BRC20 protocol, the chainless platform and the Bitcoin system are closely linked, which solves a pain point problem that Bitcoin has not yet solved.

Analysis: The Bitcoin system is only a settlement platform, not a payment platform, and cannot solve the problem of micropayments.

2.3 The reason for naming DW20

DW is the pinyin abbreviation of Chinese scientist DAI WEI, the sole creator of Bitcoin, Satoshi Nakamoto. In addition, DW20 can easily make people think of it as a token of the BRC20 protocol. Our name DW20 is also to pay tribute to Bitcoin and Satoshi Nakamoto!

Analysis: In the process of solving the mystery of Satoshi Nakamoto’s identity, Mr. Zhu fully demonstrated his skills in mining, research, and deep thinking. He confirmed that DAI WEI was Satoshi Nakamoto, the first to study Satoshi Nakamoto.

3. Issue DW20

3.1 Release Notes

DW20 will issue 210 billion tokens, 10,000 times the number of Bitcoins. It is issued according to the BRC20 protocol and is a BRC20 token distributed intelligently based on a chainless system.

3.2 Issuance Method 1:

In the first stage, 168 billion DW20 coins will be issued in 30 cycles through airdrops. You can vividly understand the airdrop as a gift. It’s best to have a bitcoin address with a holding amount and a certain address age, the address only serves as proof and does not require collateral. Its distribution method is the same as that of Bitcoin, with an issuance limit and shrinking issuance, but the distribution of DW20 is more even than that of Bitcoin.

Many Bitcoin addresses have minor changes, which are insufficient to pay the handling fee when exchanging. Therefore, the use of DW20 can revitalize the small accounts of Bitcoin in disguise, which can also increase the value of Bitcoin.

Analysis: This idea hits a pain point in the hearts of Bitcoin users. Note that airdrop distribution is limited.

3.3 Issuance method two:

In the second stage, we issued DW20 by mortgaging Bitcoin.

You can mortgage Bitcoin to the chainless system and use the system’s multi-signature and user private key to control the mortgage currency. You can also release your mortgage. You can redeem as much Bitcoin as you have staked. When the mortgage is released, it is also controlled by multi-signature, and the private key of the chainless system will play a role in verification, which ensures the transparency and non-appropriation of the entire system. Moreover, the mortgage process is automatic, like a smart contract, and you only need to choose and set the conditions.

You can issue DW20 by staking Bitcoin. When staking, 1 DW20 is priced at 1 USD, and the bitcoin in your hand is calculated at half of the market price (the mortgage rate is 50%). You can also redeem bitcoins and redeem as much as you pledge. After redeeming bitcoins, we will destroy the corresponding DW20. The mortgage rate of 50% is a reference given by the system, and users can choose their mortgage rate, but users themselves should also bear the risks incurred.

Analysis: It should be noted that Issuance is unlimited. Although the user can set the mortgage rate, a 50% mortgage rate has a sufficient safety margin.

4. Minting and distribution of DW20

(1) 210 billion DW20 will be minted at one time and placed in the DW20 address of the chainless system, respectively. Among them, the number of tokens allocated to different addresses is: user address 80%; stable fund address 10%; team addresses 5.42 %; market activity address 4.58%.

(2) The DW20 token is issued on the Bitcoin system: the cross-chain mapping on the chainless system becomes the chainless DW20; there is also the chain token DW20. The symbols are all DW20. The former is DW20 inside the chainless system, charged according to the standard of the chainless system; the latter is outside the chainless system, and its charges are the same as those of the bitcoin system.

Analysis: Cross-chain is a technical term. For example, when people trade bitcoins on the Binance exchange, it is Binance’s internal transaction, and when they transfer bitcoins out of the Binance exchange, it is cross-chain.

5. The pricing principle of DW20

5.1 Pricing Mechanism of DW20

The pricing mechanism of DW20 is market pricing. It is entirely regulated by the market and is not tied to any country’s economy. Its market price depends directly on the demand for DW20 and the market’s adjustment ability, which not only meets the actual demand of the market but also represents the real market feedback. These are not comparable to manual adjustments.

Analysis: The problem that needs to be solved here is the problem of large price fluctuations. The DW20 system is designed with an automatic stabilization mechanism.

5.2 Predict the price of DW20 by stages

Phase 1: Airdrop phase, estimated to be around 2-3 years.

At this stage, the increase in the value of DW20 coins is discovered by market makers, and market makers stabilize the long-term trend. Early in this phase, the concept of DW20 is a “memecoin of value.” Benchmarking Dogcoin as it reaches 4 million users, and its market value will get 12 billion U.S. dollars. After that, with the increase in users and the growth of consensus, DW20 will eventually reach a price of $1 per DW20, and its total market value will exceed $210 billion.

Analysis: “The rise in the value of DW20 coins is discovered by market makers, and the long-term trend is stabilized by market makers.” The stable mechanism of the stable currency is borrowed here, which is very creative.

Bitcoin was also a meme currency in its early years, and the story was unstable. The story is a stored-value currency, and mainstream funds have begun to believe it.The lack of ecological value has always been a flaw in Bitcoin, and DW20 brings the most ecological value to Bitcoin.

Phase 2: Stable currency formation stage, estimated to be around 10-12 years.

DW20 will become a strong candidate for the standard currency, and the central concept is “decentralized stable currency or stable currency that Bitcoin participates in regulation.” At this time, the price of each DW20 is 1 USD, and the collateral stabilization mechanism will automatically appear.

Analysis: The essence of the mortgage adjustment mechanism is to be priced by the secondary market, which is the mechanism of the standard currency. However, at stage 2, DW20 is not yet the ruler.

Phase 3: The ruler of commodity value, estimated to be around 24-28 years.

DW20 will be a candidate for the global commodity value gauge, with the concept of “replacing or competing with the U.S. dollar as the standard currency.” At stage 3, the market will use DW20 to mark the specific price or value of the commodity. At this time, the price of DW20 is most likely to be 1 U.S. dollar, and its market value will exceed $210 billion+1/2 the total amount of bitcoin. Meanwhile, Bitcoin will be used to measure global wealth and growth. In this way, DW20 has become the standard currency, and fluctuations in economic development and changes in global wealth will be reflected in the price of Bitcoin, but DW20 remains unchanged.

Analysis: The U.S. dollar is already a measure of the value of global commodities, but it is still volatile when used as a measure. The base currency will not fluctuate only when it is not traded. DW20 must also fluctuate, but if its fluctuation range is smaller than the U.S. dollar’s, it is the Bitcoin standard.

6. Stability principle of DW20

The development of DW20 follows the principle of Bitcoin and will rely on the market to grow naturally. It is divided into three stages, and each stage has perfect stabilization methods, and these methods have scientific stabilization principles. These principles and methods include giving full play to the role of the stabilization fund in the first stage and forming a market-making fund for market-making. and the market value of the fund continued to grow after that; in the second phase, DW20 entered the stable currency stage, and market makers should gradually withdraw from the market-making fund, and the market-making fund will become a guaranteed fund, the fund maintains the “50%: 50%” ratio of “DW20 to the U.S. dollar (or to the U.S. dollar stablecoin)”; the third stage makes DW20 the ruler of the Bitcoin standard. Currently, the market will naturally use DW20 as the anchor; the DW20 Fund is a small Bitcoin stabilization fund.

Please refer to the “Implementation of DW20 Decentralized Standard Currency” chapter for more information about relevant professional content.

Analysis: In the first stage, DW20 grows steadily; in the second stage, it remains stable, and the volatility shrinks; in the third stage, it does not move.

7. Value analysis  and realization of DW20

The value of DW20 at different stages is different, and only a part of it is listed here. The actual value is far greater than listed. Please also see the same chapter of the original white paper for details.

7.1 Value as memecoin

Since DW20 has the nature of memecoin, it can be compared to Dogecoin. Still, the performance of DW20 is better than its, and the market value of Dogecoin is 12 billion, with only 4 million users.

Analysis: The biggest difference between DW20 and modal coins is that there is a use-value narrative, and it’s normal for valuations to be higher than dogcoins.

7.2 The value of historical proof

In the past, bitcoin participants lacked an objective sign that could prove their historical status in the Bitcoin system. Bitcoin addresses can be used as historical objective proof of users.

Using a medal system, we can determine how many bitcoins may be in dead addresses that become dead coins. If the Bitcoin standard is realized, these dead coins have a huge value that could benefit Bitcoiners and the world.

Analysis: Revitalizing dead assets can always be exciting.

7.3 Revitalize the residual value of changes in the Bitcoin trading system

Bitcoin’s changing currencies are eternal existence, and revitalizing them will be a constant source of demand for DW20. DW20 gave change funds an outlet, turning what was once Bitcoin “dead money” into “living money.”

Analysis: This will add value to Bitcoin users.

7.4 First-time innovative value

First-time innovative value is the most recognized value of a cryptocurrency. DW20 has demonstrated how to use Bitcoin and the system correctly and is pioneering. Pioneering innovations will be sought after by the market, and the value of non-pioneering projects is generally much lower than that of pioneering projects.

Analysis: First-time innovative value is the first value standard among the four value judgments standard of Web3 proposed by Mr. Zhu.

7.5 Relying on Bitcoin to form a decentralized standard currency

When the DW20 in the market is scarce, there will be arbitrage by mortgaging Bitcoin, which plays a role in regulating monetary policy. It also provides liquidity in the market. The market regulates the stability of DW20. As a market-regulated stable currency, it differs from DAI stable currency and USDT stable currency and does not anchor legal currency and Bitcoin. The market ultimately determines its price. That is most in line with Mises and Hayek’s free currency principles and the financial principles of Satoshi Nakamoto’s design of Bitcoin, and the current Dogecoin and SHIB do not have this capability.

Analysis: DW20 is more decentralized than fiat and stablecoins, in line with market regulation principles, and therefore has the highest credibility.

8. Technical and financial features of DW20

The combination of technology and finance embodies a cross-border capability. The creation of Bitcoin manifests this cross-border ability, and DW20 also has this ability.

8.1 Establish a new ecology for Bitcoin

Smart contracts borrow the concept of cryptocurrency, and we prefer to call them smart programs, plug-ins, and apps on chainless platforms. Because this is far more flexible and powerful than smart contracts, and it adheres to the principles of open-source code and voluntary upgrades by users. Since BRC20 does not support smart contracts, we must put smart contracts on the second layer of the Bitcoin system. It creates an ecological model for Bitcoin, which makes Bitcoin have the meaning of ecological valuation on top of demand valuation and can be used to benchmark against the Ethereum model. Its transaction cost is also significantly lower than that of the Ethereum platform.

Analysis: Bitcoin not only has stored value but also has ecological value, so it has one more hand than gold.

8.2 Financial Features of DW20

Here are some explanations of the new concepts related to the DW20 functional currency scheme:

8.2.1 The role of the basic fund and the maintenance of the fund pool

Banks must have reserves because this is a requirement for credit. If the bank has no credit, no one will deposit money in the bank. If there is neither bank nor capital, where does credit come from? The approach we take is to build a basic line. Assuming that DW20 reaches 1 U.S. dollar, then the underlying funds will be 210 billion U.S. dollars. The total market value of stablecoins in the blockchain market is roughly the same. This part of funds constitutes the basic liquidity of the market. Liquidity will never dry up with 210 billion U.S. dollars in the basic line. The depth of the DW20 capital pool is determined by the release and withdrawal of mortgaged bitcoins and is automatically regulated by the market. Basic funding addresses system resilience and early-stage vulnerabilities.

Analysis: The three primary functions of the foundation funds are: relying on user consensus to establish credit; users automatically maintain the system (that is, market maintenance), and solving system elasticity and weakest problems. The problem to be solved by banks’ liquidity is anti-running. This problem does not exist in the peer-to-peer system. So what are the designers of DW20 trying to prevent? The article mentioned the financial war between Soros and the Hong Kong Monetary Authority, a battle between two centralized giants. Flexibility is very important in financial duels, and retail investors are generally not opponents of financial predators. The advantage of retail investors is that the chips are cheap enough, and there are stable fund. If there are organized retail investors, they can achieve anti-harvest against large investors like Gamestop War.

8.2.2 The need for foundation funds is determined by the nature of DW20

The DW20 solution also has other financial features, including DW20’s solution to the problem of capital pools and the problem of anti-fragility attacks. These issues are more complicated to elaborate on and are not the important content of this “abbreviated edition.” Interested investors can refer to Sections 8.2.2, 8.2.3, and 8.2.4 of the original white paper.

8.3 The regulation principle of DW20

Any money market is regulated through three steps: liquidity consumption, injection, and tightening liquidity.

DW20 consumes only handling fees in the process of circulation, which is very small, so its liquidity consumption is minimal, and the circulation speed is very fast; the DW20 system will automatically inject liquidity according to market demand when mortgaging bitcoins to issue DW20 the supply of DW20 increases, which is the injection of liquidity. The injection will cause the price of DW20 to fall; conversely, DW20 will be destroyed when the mortgage is redeemed, which will lead to an increase in the price of DW20.

According to Hayek’s market theory, market means are the most effective adjustment, and DW20 automatically adjusts supply and demand.

9. Trading tokens for future open financial platforms

Finance is the last bastion of Internet disintermediation. DW20 is the first standard currency with a similar mechanism to the U.S. dollar. With the chainless platform, DW20 and Bitcoin will become tools for opening the existing financial system.

The above-conceived solution is another form of realization of our bitcoin dollar (Hong Kong dollar) standard idea, found in the article “Invite Satoshi Nakamoto to Welcome the New World.” The next chapter will describe the specific function realization of this method.

Chapter 2 Realization of System Functions of DW20 Decentralized Standard Currency

1. DW20 standard currency is one of the basic functions of the chainless platform

1.1 The origin of the chainless platform

The chainless platform is a transparent centralized platform product similar to the function of Ethereum. Since it uses cloud-centralized technology, implementing all contracts becomes easy and powerful. Use transparent centralization to realize the complete characteristics of decentralization, which is the origin of the chainless system.

Analysis: Ethereum is a perfect platform; there is no similar platform in Web2. However, it does not solve the payment problem existing in the Bitcoin system, while the chainless system can solve it.

1.2 Introduction to the characteristics of the chainless system

The chainless system has 16 major features, including that it consists of a general ledger and a multi-signature multi-backup wallet, which can turn all encrypted currency single-signature wallets into multi-signature wallets, and its general ledger uses cluster technology, which individuals can control. multi-cluster systems are distributed worldwide; the system will not go down, etc. I won’t repeat them one by one here, and the specific content can be found in the same chapter of The same sections of the original white paper.

2. How to get DW20

2.1 Airdrop

The methods and steps to obtain the DW20 airdrop include downloading the chainless wallet, entering the airdrop program, following the airdrop program, etc. I won’t go into details here.

2.2 Mortgage Bitcoin to issue DW20

Just enter the DW20 mortgage issuance procedure. The mortgage mentioned here refers to the mortgage of Bitcoin to the chainless system.

2.3 Get Rewards

Of the 4.58% market fees reserved, about 3% are incentive fees for token holders of various activities. It includes multiple activities that incentivize Bitcoin users to participate. The specific method of obtaining rewards will be announced separately.

2.4 Market purchases

There are two ways to purchase DW20 from the market: on-chain purchase and chainless internal purchase. On-chain purchases refer to purchases on exchanges, and chainless purchases can also be made on exchanges.

2.5 As a payment instrument

After DW20 becomes the standard currency, DW20 can become a payment currency, and people can get DW20 in commodity transactions.

3. Other system functions of DW20 decentralized standard currency

Other system functions include on-chain DW20, unstacking procedures, real-name and anonymity, and security operations. Because these are post-operation issues, no specific introduction will be given here. For details, see the second half of Chapter 2 of the original white paper.

Chapter 3 DW20 Token Distribution and Stability Methods

1. Overview

1.1 Resonance between chainless platforms and application projects

The chainless platform and DW20 will have a resonance effect. In cryptocurrency, no platform project has such a resonance effect. The resonance effect mainly means that DW20 customers obtain chainless platform tokens while obtaining DW20 tokens and can participate in various activities on the chainless platform. In this way, users of DW20 may also become users of the chainless platform. DW20 is just one of the application projects of the chainless platform. When there are more application projects on the platform, there will be more customers. The more customers the platform has, the more application projects there will be, thus forming a positive cycle. It is the platform competition strategy of the chainless team.

Analysis: The resonance platform is a new idea.

1.2 Initial valuation and basic parameters of DW20

In the early stage of the first phase, DW20 is also based on customer value as the valuation basis. Market-making funds set the initial pricing of DW20 coins, and the initial project valuation is 100 million U.S. dollars. Thus, each currency is $0.0005, or 0.05 cents. In the second stage, the stablecoin stage, the price of each DW20 will reach about $1, which will increase about 2000 times.

Analysis: This is an attractive increase, and a class leap can be achieved with 10,000 yuan.

1.3 Airdrop to 50 million Bitcoin addresses

As mentioned above, 80% of 168 billion DW20 are airdropped, and it is estimated that about 50 million Bitcoin accounts can airdrop. These registered customers can be anonymous or real-named, and each of their Bitcoin addresses can get an airdrop of DW20 tokens. These two types of customers will initially calculate the number of tokens that can be obtained based on a Bitcoin address of $100. When they get the airdrop, the value of the customer is the same, but depending on the cycle, the number of tokens they get will be different (Note: see the same chapter of the original white paper for details). However, unlike anonymous registered customers, real-name registered customers can get an additional chainless platform currency CLY, equivalent to $50. They can also participate in various activities on the chainless platform and accept airdropped tokens from other smart contract projects. Tokens (if any), and can participate in the lottery of DW20 tokens (see detailed rules for rewards). It is an incentive for real-name registration.

Analysis: The policy tends to encourage real names.

1.4 Airdrop after 50 million Bitcoin addresses

After the airdrop of 50 million addresses, new addresses will continue to be generated, but new addresses are easy to generate and do not have time to settle. In order to distinguish whether it is a valid customer or not, we will only send coins to the newly added real-name registration, and there is only a lottery mode.

2. The value of DW20

The value narratives of DW20 include the following:

  1. There is total control using shrinking issuance, and over 80% are airdrops.
  2. The team only owns 5.42% of the tokens, slightly smaller than the proportion of Bitcoin owned by Satoshi Nakamoto.
  3. DW20 has no market financing, and its value is generated through consensus, which is not considered a security.
  4. It is a decentralized standard currency priced by the market.
  5. The name of DW20 is unique.
  6. is the best-fit ruler for Bitcoin.

Analysis: The most valuable is that no similar product is on the market.

3. DW20 Token Issuance Structure and Quantity

In the first stage:

  • The total circulation of DW20 is 210 billion, and there will never be additional issuance.
  • The specific distribution of DW20 is as follows:
    1. Airdrop: 80%, 168 billion
    2. Stabilization Fund: 10%, 21 billion
    3. Team: 5.42%, 11.382 billion
    4. Market: 4.58% 9.618 billion

In the second stage:

In the stage of a stable currency, DW20 can be issued by mortgaging Bitcoin, which will never be limited.

Analysis: The combination of currency issuance methods is very distinctive.

4. Lock-up mechanism

DW20 has a lock-up mechanism. Lock-up means that the airdropped coins cannot be sold immediately and must be released linearly according to the lock-up time. We divided the airdropped users into tiers according to the number of bitcoins they hold and the time they hold them, and they are divided into 6 types of medal accounts: gold, silver, copper, iron, tin, and paper. The medals are different, and the amount of DW20 that can be released daily is also different. The rule we established is to release evenly by day. The rules and regulations are detailed in the same chapter of the original white paper.

Analysis: Linear release is featured.

5. Allocation of Airdrop Coins

We still adopt the shrinkage distribution method for airdrop tokens, which aligns with users’ natural growth curve, and the tokens’ distribution is relatively even. The distribution principle and method of airdrop coins are more professional and not the focus of the “Short Edition,” so I won’t go into details. See the same chapter in the original white paper for more information.

Analysis: The method of inverting the model according to the natural growth curve is very ingenious.

6. Circulation model (the model when there is currency price adjustment)

The circulation model is different from the user model. Cryptocurrency primarily uses circulation value to measure project value. The issue of the circulation model is also because it involves more professional content, and it is not the key content of the “Abbreviated Edition.” For details, please refer to the same chapter of the original white paper.

7. Standard Model

Since it is not the critical content of “Abbreviated Edition,” I won’t go into details. See the same chapter of the original white paper for more information.

8. The method of determining the currency issuance model

Since it is not the critical content of “Abbreviated Edition,” I won’t go into details. See the same chapter of the original white paper for more information.

9. Why memecoin will become the standard currency

Suppose memecoin wants to become more prominent, stronger, and stable and develop into an excellent standard currency. In that case, it must have a good narrative, broad consensus, and practical application, all of which are indispensable. The current memecoin is not big because memecoin didn’t think about it in the first place. First, the scope of their consensus was limited. Consensus mainly comes from the widespread recognition of narratives and primarily depends on narratives. The consensus of many people supports the price of cryptocurrency. The narrative of Bitcoin is a store of value and Bitcoin standard. In contrast, the narrative of Dogecoin is just rewards and payments, while the basic narrative logic of DW20 is the decentralized standard currency, the Bitcoin standard currency, and the transaction token of the chainless platform (see the third part of the original white paper for details). Chapter 2. Value of DW20). Among them, it is significant that only DW20 becomes the ruler of the Bitcoin standard. If Bitcoin has a ruler, it is possible to realize the Bitcoin standard. Once the Bitcoin standard is recognized, Bitcoin can be used to measure the total wealth of humanity, and DW20 can be used as the ruler of Bitcoin to measure specific commodities. In this way, Bitcoin will surpass the market value of gold and move towards a market value of a hundred trillion.

In addition, if memecoin wants to develop into a standard currency successfully, it should also have a mature method. Taking DW20 as an example, its approach is reflected in the excellent control and resolution of various problems:

Address vulnerability

The vulnerability of DW20 will only be revealed in the first phase. In the second stage, DW20 has entered the stage of stable currency. At this time, the mortgage issuance has already taken effect, and the phenomenon of vulnerability does not appear. The manifestation of vulnerability is the large fluctuation of currency prices. The vulnerability problem can be solved by locking and releasing, stabilizing the trend, and stabilizing the bottom of the price. These methods are the same as primary market-making and must be carried out according to the rules. We’ve covered all of these. In addition, Bollinger Bands represent the trend line of market transactions, and we can also use Bollinger Bands to detect market risks. When it is found that the currency price deviates from the Bollinger trend line, it is necessary to adjust. For specific adjustment methods, please refer to the same chapter of the original white paper.

Analysis: The valuation factor of DW20 is the best to judge because it is a mathematical problem, and the company has different issues. Due to the presence of market-making funds, there are stable rising expectations.

Customer acquisition:

DW20 is based on customer value. The gradual increase in the number of customers will gradually increase the value of DW20. The method of acquiring customers is airdrop and resonance with the chainless platform, and its customers are reusable. Continuously shrinking airdrops and lottery airdrops will also allow customers to grow.

The role of funds in the stablecoin phase

During the period of a stable currency, DW20 has a market-making fund. The role of the market-making fund is to narrow the range of the Bollinger Bands. When the price of DW20 falls below the Bollinger Band, the fund will start to collect funds, and it will sell when it reaches the Bollinger Band up the rail. The fund stops operating when the Bollinger line fluctuates less than 1.2%.

Bitcoin standard phase

The use and treatment of the funds at this stage is unprecedented. It needs to be well thought out, and community input heard.

Other

See the same chapter in the original white paper for details.

Analysis: The author has a good understanding of finance and securities.

10. The system itself is not profitable is the core concept of the Bitcoin distributed system

The purpose of the stabilization fund is stability, not profit. We will agree through the contract that the market maker will make the market according to our conditions. The Bitcoin system is not profitable, its profit-makers are distributed, and the profit-makers of DW20 are also distributed.

Chapter 4 Bitcoin Standard and Prospect Analysis of DW20

Xiuwu Note: “Abbreviated Edition” only summarizes the original white paper’s DW20 risk analysis and conclusion parts. For the rest of this chapter, see the same chapter in Implementation.

After 14 years of Bitcoin operation, its technical, market, and legal risks are not large. DW20 is casting on the Bitcoin system, and the overall risk is not great. Its risks are mainly those of the “seedling” stage. Here’s an overview:

1. The actual controller risk of DW20

Regarding actual controllers, the power of the DW20 team is similar to that of the Ethereum team. We have accepted and adopted the approach of Ethereum: A. Be open and try to be as transparent as possible; B. Make decisions in the community and consciously limit your power. Ethereum has established a good standard for follow-up projects. Its core idea is that only openness can be fair, and fairness can only lead to consensus. The DW20 team will also choose the “public” method. They have endorsed the project with their credit and will take responsibility for it. The number of DW20 coins allocated by this team is slightly less than the number of Bitcoin coins held by Satoshi Nakamoto, which is 5.42%. The market should have nothing to say. Their interests are consistent with the project’s, and their operations are open and transparent. Therefore, it is neither necessary nor possible for them to do evil, let alone dare to do evil.

2. Technical risk

The chainless platform is brand new, and the essential development uses a new language. It is a generally distributed language Greatfree written in JAVA language. The author of this language, Professor Li Bing, developed it in obscurity for ten years. The language has not been tested in actual combat. Fortunately, the basic code of the chainless system is written by Li Bing alone, which has the primary conditions for creating a great project. There will be problems and loopholes in the chainless system, which can be improved during operation in the future, which requires everyone to participate in the solution. It was also the case when Bitcoin was created. A one-person system plus continuous improvement is more conducive to reducing technical risks.

3. Product risk

  1. If many product failures cannot be resolved in time, it will cause negative word of mouth and cause the loss of users.
  2. Products with similar advantages beyond DW20 appear. Capital predators and technical expert teams abound, and their power far exceeds that of ordinary small cryptocurrency teams. In terms of development, our leading ideas and unique general-purpose distributed language have removed the obstacles for them to enter the cryptocurrency field, which will further intensify the competition in the entire cryptocurrency field, and new competitors may join.
  3. Product growth is not as expected, and the assumption is too optimistic.
  4. The product is strongly resisted and restricted by interest groups.

4. Legal risk

Under normal circumstances, the possibility of DW20 being recognized as security is minimal. Now the world is looking at the United States, and the US SEC uses the Howey test as a criterion. There are four Howey tests, the last three of which are subordinate to the first. In the first article, “is money (money) investment,” if not invested with money, is it not a security? If this is the case, then DW20 is not a security.

Analysis: Except for product risks, other risks are not big.

Conclusion

In short, DW20 decentralized currency is a brand new and meaningful invention, and we hope to contribute to the cryptocurrency industry. We want to help realize the Bitcoin standard and hope that the wealth in the hands of the people will no longer be diluted.

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