—General Cryptocurrency Reader’s Edition
Written above: Miles is in charge of wallet and application development. He has been immersed in the field of cryptocurrency for many, many years. His version does not have a lot of financial narrative, which is especially suitable for friends with insufficient financial background, and it is easy to get started immediately. What he wrote is very much like an instruction manual.
They understood my idea and implemented a chainless system using modular blockchain tools.
Zhu Weisha July 15, 2023
Table of contents
- Chapter 1: Introduction to DW20 distributed stablecoin
- The origin of DW20 standard currency
- Features of DW20
- Development stage of DW20
- Chapter 2: Economic Model of DW20
- Issuance of DW20
- Airdrop distribution rules
- Airdrop distribution formula
- Lockup mechanism
- Stability principle of DW20
- Financial characteristics of DW20
- Chapter 3: System Function Implementation of DW20 Distributed Standard Currency
- The DW20 standard currency is technically supported by the chainless platform
- Implementation of airdrop
- Chapter 4: Prospects and Risk Analysis of DW20
- Prospect value analysis
- Prospect price analysis:
- DW20’s risks
- Writing insights:
Chapter 1: Introduction to DW20 decentralized standard currency
DW20 decentralized standard currency is different from various stablecoins in cryptocurrency. Its pricing mechanism is the same as that of the U.S. dollar; it adopts a market pricing mechanism. It is the pricing method used by various standard currencies, such as the U.S. dollar and the euro.
DW20 does not have an issuing entity similar to the Federal Reserve and is distributed similarly to Bitcoin. Therefore, like Bitcoin, there must be a gradual consensus growth: a distributed consensus process.
The design of the DW20 decentralized standard currency refers to the issuance principles and methods of the U.S. dollar, Bitcoin, fiat stablecoins, algorithmic stablecoins, and mortgage stablecoins, absorbing their advantages and improving their shortcomings. None of the stablecoins issued in cryptocurrency have the conditions to become a standard currency. DW20 is the first cryptocurrency that meets the requirements to become a standard currency.
Becoming a standard currency is our pursuit, as well as the pursuit of the cryptocurrency elite represented by Satoshi Nakamoto. One day, the distributed stablecoin DW20 will become the standard currency, which carries the efforts and dreams of all participants in the cryptocurrency industry. We feel honored to be the last to fill the gap.
This plan is an invention. It is a method of using distributed thinking to achieve Bitcoin standards. Its idea is that it does not rely on the government, Satoshi Nakamoto, or requires no distribution center. After the invention of Bitcoin, the birth of the distributed DW20 standard currency will make Bitcoin standard the second phenomenon-level hot spot in the industry.
1. The origin of the DW20 standard currency
1. DW20 inherits the ideas and technical achievements of cryptocurrency
After 15 years of financial and technical training, Satoshi Nakamoto used a combination of imitation, modification, and innovation to design a genius solution to the currency credit problem. In his first statement on January 9, 2009, he raised three issues with the modern financial system: excessive currency issuance by the central bank, bubble lending by commercial banks, and the inconvenience of small payments. He has prepared a rich space for script instructions for this purpose. From a practical perspective, the Bitcoin system is the most suitable system for issuing stored-value currencies. The so-called optimal system means that in terms of specific implementation, other technologies and methods are less effective than the Bitcoin system. Later, people with lofty ideals contributed their ingenuity and, in many cases, to solving the latter two problems. These contributions have been added to the content that can be imitated and modified and have also become the wealth of humanity for future generations to innovate. The emergence of DW20 is still the result of a combination of imitation, modification, and innovation.
2. Inspired by BRC20
BRC20 is the format standard for fungible tokens issued on the Bitcoin system. It was anonymously created by @domodata on Twitter on March 8, 2023, based on the Ordinal protocol. Like Ethereum’s ERC20 standard, it stipulates the name, issuance amount, transfer, and other functions of the issued token. At the same time as the release of the BRC20 standard, @domodata launched the first BRC20 experimental token ordi. The ordi token is a meme currency issued in the Bitcoin system using the BRC20 protocol. This innovation has attracted market attention. However, meme coins have no value support, and the excitement will easily pass away. We need BRC20 tokens with practical uses. DW20 is a Bitcoin-standard implementation tool with narrative and practical value. It can realize the leap from meme currency to stable currency and then to standard currency. The implementation logic is obvious.
3. Use DW20 to realize small payment
Micropayments can only charge a small fee, so they are unsuitable for settlement in the Bitcoin system. The chainless system is a transparent centralized payment platform (see the chainless system white paper). Through the BRC20 protocol and the reliability of the tested POW consensus, the chainless system with unilateral accounting and DW20 tokens have Bitcoin system credit. It makes chainless micropayments closely linked to the Bitcoin system.
4. The reason for naming DW20 as the payment token
In tribute to Bitcoin! In homage to Satoshi Nakamoto!
The reason we chose DW20 is that D.W. is the abbreviation of the pinyin of Wei Dai, which stands for DAI WEI. It is the true identity of Satoshi Nakamoto and the only original creator of the Bitcoin system. Please see Zhu Weisha’s article “Invite Out Satoshi Nakamoto to Welcome the New World” for this. The article makes many important conclusions and discusses the clear view that Satoshi Nakamoto is Wei Dai. Here is a small example. According to the customary definition of Bitcoin numbers, 21 million Bitcoins are measured in tens of thousands, while 100 million satoshis equal to one Bitcoin are measured in hundreds of millions. “Ten thousand” and “hundred million” are not British measurement units but Chinese measurement habits. After adding DW20 from Satoshi to Bitcoin, it is very consistent with Chinese measurement habits. DW20 is 10,000 shatoshi, which means “Wan(万),” and One Bitcoin is 10,000 DW20, which is 100,000,000 satoshis! means “yi(亿).
5. Reasons for issuing DW20
Why don’t we use the current stablecoin and issue a new token? Because no cryptocurrency stablecoin can become a standard currency. Among the current mainstream stablecoins, USDT and USDc are centralized stablecoins; DAI is a centralized market maker, the DW20 token has unique distributed characteristics and the advantages of Basic funding, and the DW20 stablecoin stage is market pricing. Bitcoin is the best digital gold, but it isn’t easy to be used as a payment tool. DW20 can compensate for this shortcoming and is a long-term pavement for the future evolution of Bitcoin standards.
2. Characteristics of DW20
1. If DW20 is regarded as an independent system, it has no main body control. The same goes for Bitcoin.
2. DW20 has no maintenance team and is an application project of a chainless platform. Third-party maintenance has advantages. Is Bitcoin maintained by a third party?
3. DW20 has a community decision-making mechanism similar to Ethereum’s community mechanism.
4. Have basic funds. The role of priming funds is similar to a bank’s capital, providing financial security for the system and solving the problems of system resilience and early system vulnerability.
5. Independent individuals own more than 80% of the underlying Basic funds, so the DW20 system is not a bank in the traditional sense.
6. Like the Bitcoin system, the DW20 system is not the center; DW20 does not represent the value of any system; the DW20 system itself is not profitable; DW20 only serves to improve the Bitcoin trading medium and ruler. As a trading medium, DW20 has a similar role to USDT and can operate in the entire cryptocurrency field in the stablecoin stage.
7. Designed a stable fund and formed a market-making fund. Market makers are hired externally. Although market makers make profits, they do not own the stable fund. The majority of currency holders own it. Market-making funds and operations aim to enable DW20 to grow steadily and gradually and complete the transition to a stablecoin. Processing after the transition is completed will follow community proposals.
8. The mortgagor of Bitcoin is also the issuer of DW20, the maintainer of the financial stability of the DW20 system, and the profiteer of the DW20 system. Profit comes from balancing the growth in DW20 demand.
9. DW20 is not linked to any country’s economy. The same goes for Bitcoin. The reason why the ruler exists is that it has nothing to do with the object being measured. Gold has nothing to do with the economy, and DW20 is also objective. And legal currency and measured objects: a country’s economy are entangled.
3. Development stage of DW20
Phase 1: Meme Coin
The discovery of value and the gradual formation of consensus is the meme currency stage, and this stage is the airdrop stage.
Phase 2: Stablecoin
With the continuous increase of users and the expansion of applications, DW20 will gradually stabilize at around 1 U.S. dollar.
Phase 3: The standard currency phase supported by Bitcoin
The DW20 market automatic adjustment mechanism is more sensitive than the Federal Reserve’s manual mechanism, making the volatility smaller than the U.S. dollar. With Bitcoin, DW20 can eventually achieve the Bitcoin standard, and DW20 will become a commodity benchmark that replaces or competes with the U.S. dollar.
Chapter 2: Economic Model of DW20
1. Issuance of DW20
1. Issuance in the first stage:
- The total circulation of DW20 is 210 billion, which will be minted once and will never be issued additionally.
- The specific allocation of DW20 is as follows:
- Airdrop: 80%, 168 billion
- Stable Fund: 10%, 21 billion
- Team: 5.42%, 11.382 billion
- Market activity: 4.58% 9.618 billion
2. Issuing in the second stage:
- In the stablecoin stage, DW20 can be issued by mortgaging Bitcoin, with no limit.
Details are as follows:
Mortgage Bitcoins to a chainless system. The chainless user determines the number of multi-signatures. The system is a transparent centralized platform that controls the mortgage coins by user private keys and system multi-signatures. It belongs to the smart contract method. The user determines the number of multi-signatures. When the mortgage is released, it is also controlled by the multi-signature. The system’s private key only plays a verification role, thus ensuring that the entire system is transparent and cannot be misappropriated.
The entire mortgage program is an intelligent program, similar to a smart contract. Once the conditions are set, the program will be executed automatically. It is a very mature approach to automation in cryptocurrencies.
The mortgage method is as much as your mortgage can be redeemed.
When the demand for DW20 increases, we can adjust the market price of DW20 by mortgaging Bitcoin and issuing DW20.
The mortgaged DW20 is calculated as 1 USD, and the Bitcoin is mortgaged at the market price with a mortgage rate of 50%. Please refer to DAI for the principles of closing and covering positions. We consider giving users the option of mortgage rates, and users bear corresponding risks.
When redeeming Bitcoin, the corresponding DW20 will be destroyed.
Due to the mechanism of BRC-20, additional issuance and destruction functions cannot be realized for the time being, and new protocols will be introduced in the future.
2. Airdrop distribution rules
DW20 is not issued according to time like Bitcoin, but according to the number of Bitcoin addresses. It is a “registration and mining” with limited conditions, as follows:
- 1. Airdrop 168 billion DW20 tokens;
- 2. Target 50 million users;
- 3. Divided into 30 cycles;
- 4. Each old Bitcoin address is valued at US$100;
- 5. The initial public listing price is 0.05 cents per DW20;
- 6. The airdropped tokens have a lockup mechanism;
- 7. Both real-name users and anonymous users can register.
3. Airdrop distribution formula
1. The principle formula is as follows:
The number of coins obtained from the airdrop g = 100 US dollars/market currency price……………… Principle formula
80% of DW20 is issued by airdrop. There are 168 billion in total, and we expect that 50 million users will receive airdrops. Each Bitcoin address is worth $100, far more than the value of Bitcoin change. Whether real-name or anonymous, it has this value.
2. Anonymous registered customers:
The airdropped DW20 tokens can be obtained according to the proof of the Bitcoin address.
The determination is based on $100 per Bitcoin address, and the number of tokens obtained varies depending on the cycle.
3. Detailed formulas and simulation tables
(For a detailed explanation of the formula, see the full white paper)
The 50 million users will be divided into 30 periods, and approximately 168 billion coins will be issued. x represents the xth cycle.
The formula and parameters are as follows:
The number of addresses corresponds to the number of people per cycle of the chainless white paper uX. Any mention of a user represents a Bitcoin address.
Formula (1) corresponds to the address number in the second column of Table 1. The value in the first line is set.
|x 周期 Cycle
|ux 用户数 Number of Users （万人） (10,000 People)
|dx 新增用户 New Users （万人） (10,000 People)
|cx当期 发行量 current period issued （亿枚） (100000000 Pieces)
|Cx累积 发行量 Accumulation issued（亿枚） (10000 0000Pieces)
|Vx 用户价值 User Value （万） (US $10,000)
|px 币估值价 Coin Valuation Price （美分） (￠)
According to this table, users can know the number of free coins they have registered for and received at different periods.
4. Lockup mechanism
1. Determination of locking time
Since Bitcoin can randomly generate addresses, we have stipulated lockup tiers for different coin holding amounts and holding times for fairness. A Bitcoin address may appear often in the ledger, and the address age should be calculated based on the latest address. Address age refers to when an address first generated a Bitcoin address and when it applied for the DW20 airdrop. One point will be given if the address is over one year old, and no points will be given if it is less than 0.5 years old. If the period exceeds one year, 0.08 points will be awarded for each month exceeded, and no points will be awarded for periods less than one month.
One Bitcoin in the account address is worth 1 point. Less than one Bitcoin is also scored according to face value, and the scoring unit is rounded to two decimal places. The coins of this address may change throughout the period. We calculate based on the number of coins held by the address on the application date.
If the algorithm is simple, there will be less controversy.
• The provisions are as follows:
- If the sum of address age and Bitcoin reaches 50 points, it is called a Gold account;
- Reach 25 points to get a Silver account;
- In the same way, a score of 12.5 is called a Bronze account;
- The Iron account is called at 6.25 points;
- 3.125 points Tin account;
- The Card account must reach 0.5 points or above.
- Unlicensed customers. Customers who fail to meet the above standards are unlicensed. You can receive a DW20 airdrop equivalent to $50.
Medals can be used to differentiate between different lock-in periods.
• Explanation and examples of regulations:
- The latest address holds 20 coins. Holding coins for 6 years is 26 points, a silver medal.
- In the same coin issuance cycle, the number of coins received by all addresses is the same, regardless of medals.
- One address can only be claimed once.
2. Release of lockup
- Lockup: means that the airdropped coins cannot be sold immediately and must be released linearly according to the lockup time.
- Linear release refers to the total number of coins obtained divided by the limited number of days to determine the amount that can be released daily. Different medals have different amounts that can be released every day. Release evenly by day.
- Rules for releasing airdrop coins:
- Gold medal: 30-day linear release;
- Silver medal: 60 days are released;
- Bronze medal: 90 days of linear release ;
- Iron medal: 120-day linear release;
- Tin medal: 180-day linear release ;
- The card metal: 270-day linear release;
- Unlicensed medal： 270-days linear release
- The number of DW20 tokens awarded does not concern customer medals; the medal determines the release conditions.
- The release date is calculated from the day it is listed on the exchange.
- The rewarded chainless coins follow the rules of chainless coins.
5. Stability principle of DW20
We have listed the three stages of DW20 because the development of DW20 follows the principles of Bitcoin and relies on the natural growth of the market. Stablecoins USDT and DAI do not have this growth stage, and their prices are set at $1.
1. The role of the stable fund in the first stage
1.1 Stable funds determine the rise of DW20
In the first stage, DW20 will follow the market fluctuations. Since its price is meager, no one will mortgage it to make the market. At this time, its value reflects market demand and expectations and also depends on the market’s evaluation of the advantages of DW20. Its advantages are:
- It has the same credibility and legal advantages as Bitcoin;
- Revitalize the advantages of Bitcoin change;
- Advantages of a micro-payment of Bitcoin;
- The advantage of certifying the value of Bitcoin customers;
- Advantages of distributed currency; accurate market regulation;
- Advantages as a solution to the problems left by Satoshi Nakamoto;
- Advantages of the price ruler under Bitcoin standard conditions;
- Advantages of funds pool formation;
1.2 Market-making cooperation of stable funds
The stable fund is 10% of the total issuance, totaling 21 billion.
Initially, the Stable Fund had no money, only coins, and no independent operators. After the funds need to be invested in equal proportions, a new market-making fund will be formed, and other teams will manage the market-making fund and make the market. The independent market maker invested US$10 million in the first phase of the fund, which means that 21 billion DW20s are worth US$10 million, and the entire DW20 is valued at US$100 million. The valuation of one DW20 is 0.05 cents. In the first phase, the independent market-maker was voluntarily organized and subscribed by community consensus members. The stable fund pays management fees, and the profits of the stable fund are retained to expand the fund’s plate without dividends. It will gradually expand the scale as the currency price rises to enhance the strength of DW20. Fund managers will be selected through global auditions starting from the second phase. Management fees are charged at 1%-2% of profits.
The market value of the fund should continue to grow. For example, the first phase will end when the market value reaches 200 million U.S. dollars, start the second phase from 200 million U.S. dollars, end when the second phase’s market value goes 1 billion U.S. dollars, and start from the second phase’s 1 billion U.S. dollars. The U.S. dollar began to grow and entered the third period. The growth of the third period ended when the market value reached 3 billion U.S. dollars. Here, peer-to-peer injection of DW20 tokens is required.
In principle, if Bitcoin does not fail, it will be stuck at most, but it will not lose money.
2. The second stage of mortgage Bitcoin market-making
The second phase is marked by the issuance of DW20 by someone pledging Bitcoin. At this time, DW20 entered the process of stablecoin. In other words, there is no need for external funds to join the market-making fund. External funds must gradually withdraw from the market-making fund, and the market-making fund becomes a guarantee fund. The fund maintains a “50%:50%” proportional relationship between DW20 and the U.S. dollar or U.S. dollar stablecoin.
Theoretically, DW20 is the shadow coin of Bitcoin and should rise with the rise of Bitcoin, just like the rise of BCH and LTC. In addition, DW20 has payment characteristics. The price is determined based on supply and demand. If the price is constant, the issuance volume will be increased. Mortgage issuance expands the issuance volume. So, the profits that should have risen with demand were taken away by the Bitcoin market makers who issued DW20 as collateral for Bitcoin. The demand expansion for DW20 has not been considered here, only the impact of rising Bitcoin prices on DW20.
Since DW20 is not linked to each country’s economy, how can the mortgager judge the value of DW20? Even simpler than stocks, it is two factors: growth in the number of customers and trading volume.
The number of customers complies with Metcalfe’s theorem: “The value of a network is proportional to the square of the number of connected users”;
Growth in transaction settlement volume: consistent with the rule of linear change in value. It is the linear correspondence between the Fed’s currency issuance and economic growth.
Although the factors are simple, there is a foreign exchange speculation market and specialized market-making funds due to different personal value judgments. There are more than 200 billion dollars in speculative funds, and daily transactions are 3 trillion, corresponding to the total currency issued by the Federal Reserve, which is more than 30 trillion. The status of DW20 is very similar to the currency of the Federal Reserve, and it belongs to the base currency supply. None of them are bubble lending by banks, and the two may be a reference for comparison. To use an analogy, if the total market size of DW20 is 210 billion, then if the speculative funds for market making are 1.4 billion to 1.5 billion, the price can be set. Since the DW20 adjustment is more sensitive than the U.S. dollar, it depends on how much funds are needed to operate it.
3. The third stage, the ruler of Bitcoin standard
The third stage is marked by the fact that the DW20 is less volatile than the U.S. dollar, and there is no depreciation in the price comparison of commodities. At this time, the market naturally uses DW20 as the anchor. The original “50%:50%” proportional relationship between DW20 and the U.S. dollar in the hands of funds began to change. DW20 still accounts for 50%, and the other 50% corresponds to USD and BTC. The final fund maintains the proportional relationship between DW20 and Bitcoin of “50%:50%”. At this time, the DW20 standard currency is established.
6. Financial characteristics of DW20
1. The role of foundation funds and the maintenance of fund pools
Why do banks need reserves? Because this is a need for credit. If the bank does not have credit, no one will go to the bank to deposit money. DAI’s use of smart contracts to generate credit is one method, but we remember that in its early days, it was almost punctured. We always believed it relied on external forces to withstand the crisis, so we must lay down funds to increase credit when we are not strong.
If there are neither banks nor capital, where does credit come from? We think of Satoshi Nakamoto’s Bitcoin practice, a gradual accumulation of consensus. Our advantage over Satoshi Nakamoto is that we have a clear customer base. Satoshi Nakamoto left Bitcoin users behind. The initial funding was airdropped to 50 million Bitcoin addresses. Over 10 million Bitcoin customers are on the chain, far less than 50 million. Many customers are in centralized exchanges, and they will download chainless wallets and join the ranks of the 50 million early customers. In the first stage, we assumed it would take 2-3 years to reach 50 million customers. It is a very conservative indicator. Judging from the Internet, this is an indicator that can be achieved within one year. The estimated value of financial customers is US$50 billion, ranking fourth among current cryptocurrencies. Note that this is only an estimate of the value of the DW20 meme coin, which is equivalent to the bottom of Bitcoin’s computing power.
Assuming that DW20 has no underlying funds (initial liquidity tokens) and is only issued through mortgages, it is equivalent to the drying up of liquidity when all mortgages are recovered. But with US$210 billion in funding, liquidity will never dry up. And this part is airdropped to Bitcoin users to achieve proper distribution.
2. The nature of DW20 determines the need for initial funds.
DW20 is a payment instrument and price scale. So it has to be flexible. We can look at a few examples.
New gold will be dug out every year. Gold can be used as a measure of whether the newly dug amount equals economic growth. And when the economy develops faster than the amount of gold dug out, it will cause deflation. Gold has no flexibility in adjustment, which has become a reason for people to eliminate gold.
Fiat currency was designed to overcome the lack of elasticity of gold. It is regulated based on the economic aggregate predicted by market data. Its purpose is to ensure that the amount of legal currency issuance is equal to economic growth. However, this prediction is inaccurate and is often too elastic. The result is inflation. Repeated adjustments have become the eye of the storm for economic shocks.
Both of the above monetary systems have problems. We need a currency with a negative feedback mechanism in an automatic control system. It is the automatic adjustment of the market. The so-called adjustment requires a market adjustment margin, just like a machine needs lubricating oil. The initial fund has no profit indicators at all. It is the lubricant of the Bitcoin payment system.
3. Adjustment principle of DW20
There are three steps to any conditioning: drain, infuse and tighten.
3.1 Liquidity consumption
Cryptocurrencies don’t have the problem of money in transit. When it flows across borders, it flows quickly and efficiently, unmatched by the legal currency system. China’s bank funds have the shortest transit time and can be delivered within seconds domestically. This speed is the speed indicator of DW20 and is entirely achievable. Liquidity consumes only handling fees, but this does not affect the total amount of the DW20 currency pool.
3.2 Liquidity injection
When DW20 is issued for a Bitcoin mortgage, liquidity is injected and will be automatically injected according to market demand. The injection of liquidity in the US dollar is controlled by the Federal Reserve, based on indicators, and is a manual injection. The total amount injected by DW20 is no less than half of the market value of Bitcoin. The injection caused the price of DW20 to fall. According to Hayek’s market theory, market means are the most effective. DW20 automatically adjusts supply and demand. However, in the first stage, DW20 has no stabilizing mechanism for DAI against the US dollar because DW20 was not a stablecoin initially.
3.3 Tighten liquidity
The mortgage redemption of DW20 will destroy DW20, which will lead to an increase in the price of DW20.
Chapter 3: System Function Implementation of DW20 Decentralized Standard Currency
1. The chainless platform technically supports the DW20 standard currency.
Introduction to chainless systems
The new Web 3.0 transparent centralized reconciliation system uses blockchain and combines traditional Internet technology. The chainless system still has blocks and chains composed of blocks, but transactions are verified and accounted for by the chainless system. The accounting method is not competitive accounting; it is unilateral accounting by the system after confirmation by the sender and receiver. It differs from the current cryptocurrency accounting method; however, the hash value of the running account, which is composed of blocks, is stored in the Segregated Witness area of the Bitcoin system. It uses the credit of the Bitcoin chain to replace multi-person accounting and passes. The Bitcoin system provides credit enhancement to chainless systems.
Using the public chain as the root of credit expands the credibility of unilateral accounting, which will significantly broaden the application prospects of cryptocurrency and avoid the emergence of unnecessary regulatory methods. The most prominent feature of the cryptocurrency created by Satoshi Nakamoto is that it requires no supervision.
2. Implementation of airdrop
1. Download the chainless wallet.
2. Enter the airdrop program. Support anonymous registration.
3. Follow the airdrop procedure. Example of steps:
- The user provides the Bitcoin address to the chainless system;
- The system verifies the user’s address qualifications. After chainless verification, it prompts which medal the address’ qualifications belong to and then sends this information to the user according to the medal level, and Subsequently confirmed by the user
- After the system verifies that everything is correct, the medal qualification certificate will be sent;
- After the user confirms that everything is correct, click Yes;
- The system will put the DW20 token into the user’s chainless wallet, which will be locked.
4. Check the DW20 release status on the “Airdrop” page.
3. Bitcoin mortgage and unmortgage procedures
1. Mortgage Bitcoin and issue DW20
Enter the DW20 mortgage issuance process.
The mortgage procedure is briefly described as follows:
Mortgage Bitcoins to a chainless system. The chainless system is a transparent centralized platform that controls the mortgage coins by user private keys and system multi-signatures. The chainless platform opens a Bitcoin account for users. The entire process is the same as the external transfer of the chainless platform. However, a mortgage procedure will be used for new users to open a DW20 account.
2. Deposit Bitcoin
It is straightforward to unsecure Bitcoin: press the button of the mortgaged BTCy, and the system will pop up the number of DW20 that needs to be decompressed and the system’s decompression address. After the user enters the amount of DW20 into the address, the system destroys DW20 and unsecured Bitcoin and simultaneously changes the value of the DW20 and Bitcoin indicator in the general ledger.
Chapter 4: Prospects and Risk Analysis of DW20
1. Prospect value analysis
The value of DW20 is different at different stages. Here are only some of them. The actual value is far greater than the listed value.
1. Value as a meme currency
DW20 has the nature of a meme coin, which can compete with Dogecoin and SHIB coins, but its performance is better than theirs. Dogecoin’s market capitalization is 12 billion, and SHIB is 4 billion. DW20 is worth 2 cents per coin against SHIB. The value of meme coins has a floor and a ceiling, just like Bitcoin. One way to generate the bottom price is an algorithmic generation, which is POW “mining,” such as Dogecoin; the other, such as SHIB, does not have “mining,” and the standard for measuring its bottom price is the number of participants, almost a registered user in the Internet age is worth $50, which is how venture capital values an unprofitable business.
When Facebook acquired WhatsApp, the price per customer was US$46. The value of financial customers is different, and the valuation recognized by the market is higher. This valuation reaches 500-1,000 US dollars per person, also called customer acquisition cost. People can calculate the value of the acquired company based on this. If SHIB has no other application value, its valuation of US$4 billion would be at least the value of 4 million users. From this point of view, assuming that there are 50 million Bitcoin addresses as users, the total customer value is US$50 billion, which is lower than the total value of the Bitcoin base price of US$400 billion, estimated based on the current computing power of US$20,000. A normally operating project will be valued much higher than the base price. Luna had 4 million users before its collapse. Under normal operating conditions, the market gave it a base price valuation of US$4 billion to US$5 billion. Luna’s top valuation of more than 40 billion was due to the increase in transaction volume and the market’s imagination for its application demand. But Luna failed to hold on after falling from US$4 billion to US$5 billion, exposing design flaws.
2. The value of historical proof
Bitcoin participants in the past lacked an objective mark that could prove their historical status in the Bitcoin system. Bitcoin addresses can serve as objective proof of users’ history and have value. There were very few users in the early years, and they all had scarcity. The proof of this scarcity is verifiable. Our medal system, combined with NFT technology, can produce unique proofs. The significance of its proof can be used to determine how many Bitcoins may be dead coins. Dead coins refer to coins whose private keys are lost, hit into a black hole, and can never be moved. It’s like losing a golden mountain. If Bitcoin were the standard, Golden Mountain would be of enormous value. Restoring this value is indispensable to Satoshi Nakamoto and will benefit Bitcoiners and world peace.
3. The residual value of change in the live Bitcoin trading system
About 60% of Bitcoin addresses have a Bitcoin value less than the transaction fee, which has become an account loss. According to the principle of Bitcoin, change will always exist, and revitalizing the change currency of these Bitcoins will be the source of continued demand for DW20. We have funds reserved for various activities and will continue to inventory change addresses. DW20 gives a way to change funds, which will improve the efficiency of the Bitcoin system and the wealth of Bitcoin users and is also conducive to the popularity of Bitcoin.
Adding a historical assessment of Bitcoin users’ credit and the revitalization of Bitcoin small change add value to Bitcoin users, which Bitcoin users will welcome.
4. First-of-its-kind value
First value. The characteristics of cryptocurrency participants determine the pursuit of novelty, differentiation, and speculation. The first-of-its-kind value is the most recognized value of cryptocurrency. DW20 uses the Bitcoin system ledger as a layer through the BRC20 protocol and chainless platform, demonstrating how to use the Bitcoin system correctly. Cryptocurrency has no patents, so there are unwritten rules in the market and original innovations will be greatly respected.
2. Prospect price analysis:
Predict DW20 price by stages
Stage 1: Airdrop phase, estimated to be around 2 to 3 years.
There is no Series A investment in DW20. A market-making fund sets the initial pricing of the coin. The initial project valuation is US$100 million, and each coin is US$0.0005. At this stage, DW20 is remarkably similar to the early “mining” stage of Bitcoin. The rules are airdropped to everyone, and in cooperation with the stable fund, the first phase of the consensus phase is completed. By the second phase, the price of 1 US dollar has increased 2,000 times.
How is the price of the U.S. dollar determined? Its printing costs never change much. Obviously, the value of the US dollar is the result of market consensus, and its consensus range is extensive. It is the price scale of commodity prices, the standard currency. At the earliest, the US dollar was anchored to gold, and the value “borrowed” from gold was just like the legal currency stablecoin anchored to the US dollar, relying on the value of the US dollar. The value behind it supports the currency consensus. Bitcoin is energy conversion, DW20 is user value, and the US dollar is debt solvency.
DW20 is a one-time mint of 210 billion. Like the US dollar, DW20 is valuable only when there is broad consensus, and widespread use. Before the application was developed, it only had the value of meme coins. Market makers discover the increase in the value of DW20 coins, and the long-term trend is stabilized by consensus between market makers and users.
DW20 served as an alternative coin to the meme coin. Its concept was a “valuable meme coin,” reaching 2-5 cents, benchmarking against SHIB and Dogecoin. Later, as the number of users increases, the growth of the consensus, after passing through stage 1, will eventually reach the value of one DW20 of about 1 US dollar. The sign of entering the second stage is the issuance of DW20 by someone staking Bitcoin.
Stage 2: The formation stage of stablecoin is estimated to be around 10 to 12 years.
As a candidate for stablecoin: The concept is “a distributed stablecoin or a stablecoin regulated by Bitcoin.” The price is $1, which is the most reasonable psychological suggestion. At this time, a mortgage stabilization mechanism automatically appears. It is the same as the U.S. dollar Bretton Woods Agreement principle. It is also a method of “borrowing” value from Bitcoin at the same price of one DW20 per U.S. dollar, using Bitcoin as collateral. The sign of entering the third stage is that the volatility of DW20 is smaller than that of the US dollar and 1.2% smaller than the volatility of stablecoins.
Stage 3: The scale of commodity value is estimated to be around 24 to 28 years.
Candidate for Global Commodity Value Scale: The concept is to “replace or compete with fiat currency as the standard currency.” The price of DW20 at this time is most likely $1. The market value exceeds 2100+1/2 the total number of Bitcoins (100 million U.S. dollars unit). Market products are priced according to DW20. At this stage, Bitcoin is used to measure global wealth and growth, and DW20 is used to measure the price of specific commodities. At this time, fluctuations in economic development are reflected in Bitcoin, and DW20 can replace the US dollar in measuring Bitcoin. It means that DW20 has become the standard currency. In other words, the price of Bitcoin continues to rise while the price of DW20 does not move.
3. DW20’s risks
Bitcoin has experienced 14 years of development, its legal risks are no longer significant, and the reliability of the technology has been repeatedly verified. Currently, the risk is mainly that of DW20.
1. The actual controller risk of DW20
80% of DW20 coins are airdropped, and the team has no control over them. Among them, 10% are stable funds, mainly attracting investment from institutional funds. Market activities account for 4.58%, and the team accounts for 5.42%. This power is less than the power of the Ethereum team. Of course, the market has accepted this approach of Ethereum. The market has proven this method.
2. Technical risks
The chainless platform we chose is a brand-new platform. That combines the ideas of blockchain with the advantages of web2. The Internet can solve the problems of Bitcoin and provide technical support for the birth of DW20.
3. Product risks
- Similar products with advantages beyond DW20 appear. Because a project can only enter the main battlefield of the Internet after it enters the market currently occupied by Web2. Capital giants and teams of technical experts abound, and their power far exceeds that of ordinary small cryptocurrency teams.
- Product growth is less than expected, and assumptions are too optimistic.
- The product is firmly blocked and restricted by interest groups.
4. Legal risks
Under normal circumstances, the possibility of DW20 being recognized as a security is minimal. Now, the world is looking at the United States, and the U.S. SEC uses the Howey test as a criterion. There are four Howey tests, the last three of which are subordinate to the first. Article 1: “It is an investment of money.” If it is not an investment of money, does it mean it is not a security? If judged this way, DW20 is not a security.
The United States is case law. The U.S. SEC has stated that Bitcoin and Ethereum are not securities. DW20 is similar to Bitcoin, so it is not a security.
In short, the DW20 Decentralized standard currency is a brand-new and meaningful invention, but we have not applied for a patent. We hope to contribute to the cryptocurrency industry with this. We want to help realize the Bitcoin standard so that the wealth in the hands of the people will no longer be diluted.
1. Bitcoin has developed over the years and has become digital gold. It has become recognized as the best decentralized value store, and the system is already the best-decentralized transfer system. However, as a convenient payment tool, it still has certain flaws. DW20 is just right and can make up for this pain point.
2. The market space is very huge. We can take a look at the market value of the top five stablecoins:
- USDT: 81.7 billion US dollars
- USDC: 27.3 billion US dollars
- DAI: 4.2 billion US dollars
- BUSD: 3.9 billion US dollars
- TUSD: 2.8 billion US dollars
3. The timing is perfect. Bitcoin’s Ordinal protocol makes it possible to issue NFTs and tokens on Bitcoin.
4. The prospects are excellent. Relying on the Bitcoin chain, it is expected to create the second-largest project in the world after Bitcoin in market value.
5. Competitive advantage: Creating a Decentralized standard currency requires solid financial knowledge and comprehensive capabilities. Zhu Weisha, the initiator of the DW20 project, has a background in automation technology and is from the Institute of Industrial Economics, Chinese Academy of Social Sciences. He has over 30 years of corporate experience, and the group has solid strengths and resources. We have a first-mover advantage; relying on a chainless platform makes it difficult for similar projects to compete.