Chainless and DW20 Stablecoin Simple Q&A Series for Beginners (Part 1)

With the recent surge in chainless users, the project has seen remarkable growth since its launch on Christmas 2023. As of the end of June 2024, the number of registered users has skyrocketed from zero to 560,000 in just six months.

This achievement is quite impressive in the blockchain community.

Now, many newcomers have joined the community. Some are here to take advantage, some are speculators, some were dragged in, and there are quite a few believers. Besides the believers, many newbies have raised numerous questions in the community. These questions are actually detailed in Zhu’s two white papers: “WEB3.0 Chainless Financial Platform White Paper” and “DW20: The Implementation of Decentralized Standard Currency.” The answers to most questions can be found in these two documents.

However, questions arise since many community members either don’t have the time to read or are unwilling to learn. Based on this, I wrote a brief explanation addressing some basic questions about the chainless platform and DW20, hoping to resolve the confusion.

Disclaimer: All answers in this article are based on my understanding after reading the white papers. I am not a project team member but a user like everyone else. The views expressed are solely my own.

Declaration of Interest: I hold DW20 tokens. This article is not investment advice but a personal understanding of the chainless project and the DW20 stablecoin.

1. DW20 is a stablecoin similar to USDT. The difference is that USDT is pegged to the US dollar, with a 1:1 collateral of USD, and then issues its tokens. Essentially, USDT enhances its credit by leveraging the consensus on the US dollar, making 1 USDT equivalent to 1 USD from the start.

DW20, however, is not pegged to the USD. DW20 aims to become a consensus in itself. Like Bitcoin, it seeks to gather consensus from more people, thereby becoming a stablecoin through the development of this consensus, starting from 0 to 1 USD and then surpassing the value of USD.

2. DW20 serves as a measuring stick for Bitcoin. Satoshi Nakamoto attempted to create a “world-class consensus” to measure the total economic development of the world, which is the significance of Bitcoin.

Since the global economy is volatile, Bitcoin cannot accurately measure the value of specific goods. Currently, the US dollar serves as a measuring stick for particular goods, but this stick can lengthen or shorten, allowing the US to exploit the rest of the world, which is unfair.

When used as a stablecoin, USDT still has not achieved Satoshi Nakamoto’s vision of a bubble-free financial system.

DW20 is the measuring stick for Bitcoin, helping it measure the value of specific goods. To develop into a “sdandard currency,” Bitcoin needs a measuring stick. This stick should be separate from “economic activities”; otherwise, we will continue to suffer under the unfair US dollar system.

The selection of the measuring stick should be independent of the items being measured. Gold is unrelated to the economy, while fiat currency is related to the items being measured, making fiat currency an inadequate measuring stick.

This is why DW20 is significant as a measuring stick unrelated to the measured items.

3. DW20 has a total supply of 210 billion tokens, which is 10,000 times that of Bitcoin, making it suitable for measuring the price of goods.

“DW” represents Wei Dai, as Zhu Weisha was the first to identify Wei Dai, a Chinese-American, as Satoshi Nakamoto. “20” represents the BRC20 protocol. After issuing 210 billion DW20 tokens, the platform will only collateralize to issue more. When there is a shortage of DW20 in the market, users can only issue more DW20 by collateralizing Bitcoin based on value proportion. Conversely, if users redeem Bitcoin, the corresponding DW20 will be destroyed.

Everything is left to the market, eliminating the practice of “government using monetary policy as a means of economic development.”

Regarding the distribution of DW20, here it is:

– Airdrop: 80%, 168 billion tokens

– Stability Fund: 10%, 21 billion tokens

– Team: 5.42%, 11.382 billion tokens

– Market: 4.58%, 9.618 billion tokens

4. CLY is the equity token of the chainless platform, representing the platform’s value. There are 2 billion tokens; the others will never be reissued. TCLY is the same as CLY. TCLY can be traded directly, while CLY will be linearly released after being listed on exchanges and cannot be traded all at once. CLY will be an important certificate for future community voting activities on the chainless platform.

5. The chainless platform uses the POP (Proof of Person) user headcount algorithm to increase value. In the Internet era, every user has value. As the number of users increases, the airdrop of DW20 and CLY will decrease accordingly, with the reduction being based on user count milestones. Refer to the 30-cycle and additional cycle calculation formulas in the white paper for specific details.

6. The chainless platform and the DW20 stablecoin calculate the value using the POP algorithm, thus rewarding users for promotion. Currently, the project has reached the Angel+ stage. According to legal regulations, rewards are calculated for up to three levels of referrals:

– A refers to B, A receives one reward weight;

– B refers to C, A receives 0.5 reward weight;

– C refers to D, and A does not receive any reward.

The chainless project does not require users to invest; the project team funds it. Before listing, only one round of “influence” financing will be conducted using CLY. The aim is not to raise money but to gain influence.

7. Currently, all trading activities are spontaneous peer-to-peer transactions among users and have no relation to the project team. Transaction guarantors do not charge any fees.

8. The growth of DW20 has three stages: 1. Meme coin; 2. Stablecoin; 3. standard currency.

The meme coin stage is the current stage, where it holds little value but has a bit of consensus. The stablecoin stage is when it reaches the value of 1 USD. The standard currency stage is when it surpasses the USD and serves as the measuring stick for Bitcoin as a standard currency. This stage will require some time and effort to achieve.

Throughout these three stages of DW20’s rise, there are mechanisms for locking tokens, market-making funds, and value floors to ensure DW20’s stable increase and become a stablecoin.

Locking mechanism: Airdropped tokens must be released proportionally over time and cannot be sold immediately, ensuring some price stability.

The reward tokens currently do not have a locking mechanism. However, once listed, they will be subject to the same lock and linear release as the airdropped tokens.

Market-making fund mechanism: The project has a market-making fund that will start buying when the price is 20% below the lower Bollinger Band, stabilizing the price.

Value floor mechanism: Internet users have value, similar to the mining cost of Bitcoin, known as the “hash computing floor.” The larger the user base of the chainless project, the stronger the consensus, which forms the project’s “value floor” or “user value floor.”

In conclusion this is a rare and cleverly designed token and platform system. If successful, it will reduce the unfairness caused by fiat currencies.

The above is my understanding of the chainless project and DW20 stablecoin, aimed at helping beginners quickly grasp the basics. I may update this series if I have time. Any shortcomings or errors are my own. Please feel free to correct me, and thank you.

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