TRC205: Freeze TRX tokenization

[lvs007]

tip:205
title: Freeze TRX tokenization
author: Kiven <kiven.liang@tron.network> 
discussions to: https://github.com/tronprotocol/TIPs/issues/205
status: draft
type: Standards Track
category: TRC
created: 2020-11-27

Simple Summary

This TIP provides freeze TRX tokenization for java-tron.

Abstract

At present, in the Tron ecology, user freeze some TRX can only be used for voting, and the annualized reward of voting is only about 7-8%, According to the principle of POS consensus mechanism, a low staking rate is not conducive to the security and maintenance of the whole network,

so the main purpose of this improvement is to improve the overall security and reliability of the Tron ecology.

Motivation

Increase the profitability of TRX holders, while ensuring the health and stability of the Tron network.

Rationale

freezeBalance: Freeze a certain amount of TRX, get corresponding bandwidth/energy/voting rights, and get a certain amount of tokens/vouchers issued by the system.
unFreezeBalance：Users unfreeze a certain amount of TRX, clear the corresponding amount of bandwidth/energy/voting rights, and deduct the corresponding amount of tokens/vouchers.
transferAssets: Users can transfer TRC10 tokens

Technical Specifications：

Obviously, in order to increase the user's staking rate of TRX, the user must be willing to stake his TRX, and currently, the only way a user can gain a profit via staking TRX is voting, so we can come out with several possible solutions, which must satisfy some rule.

1. Reward of staking TRX is not limited to voting revenue.

2.Improve voting incentives

For Scenario 2, increasing the voting bonus will lead to an increase in the amount of issuance(Inflation), which is not conducive to the stability and growth of the token price, of course, the current network issuance rate is the lowest among several mainstream public chains, but it is not within the scope of consideration.

So how do we make staking TRX more than just getting to vote? There are two main options.：

Solution 1:
We can design a TRC10 token/voucher, when users freeze their TRX, a certain number of these tokens/vouchers will be issued to users, and when users hold these tokens/vouchers, they can perform corresponding ecological operations, such as using these tokens/vouchers to mine.

When users want to unfreeze, they need t return the corresponding tokens/vouchers before they can unfreeze.

Solution 2：
This solution mainly takes advantage of the new voting instructions on the Tron20 Smart Contract, by issuing the official voting contract, users can vote for SR through the contract, and at the same time, we can issue a corresponding percentage of TRC20 tokens to users. When users redeem the TRX, they will also need to deduct the corresponding tokens. Since the current voting instruction can only vote for one SR, you need to deploy multiple voting contracts for the corresponding SR (this can also be done by modifying the voting instruction to allow one contract to vote for multiple SRs).

Both Scenarios 1 and 2 are relatively easy to implement.

Scenario 1 is to issue tokens/vouchers to users through the system, using the TRX10 token model.

Scenario 2 uses the smart contract development method, which increases the workload and is not conducive to system integration. The advantage is the direct use of the TRC20 token, which is more conducive to the application of the Defi project.

Here, we comprehensively compare and choose Option 1 to implement:

The ratio of token value to TRX value, which can be designed as a dynamic exchange, fixed ratio exchange.

Fixed Ratio: There are three schemes, which can be designed to exchange tokens for TRX at ratios of 1:1, 1:10, 1:100;

Dynamic Ratio: This can be positively correlated with the amount of TRX a user pledges, the more TRX a user pledges, the more new tokens he will receive. The more TRX a user pledges, the more new tokens he will receive. The specific dynamic exchange ratio can be seen in the following table.

user staking amount	ratio to TRX
0~1000	1:1.0
1000~10000	1:1.1
10000~100000	1:1.2
100000~1000000	1:1.4
1000000~10000000	1:1.6
10000000~100000000	1:1.8
1000000000~1000000000	1:1.9
1000000000~	1:2.0

The above redemptions are incremental in accordance with the user's pledge volume gradient.

Revenue Model：

Note: The above data are not promised reward rate, need to check it out in the real system operating environment.

Data Structures：

main parameters of the new insurance token:

"id":"1234567"
"owner_address":"xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx",
"name":"0xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx",
"abbr": "0xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx",
"total_supply" :1000000000000,
"trx_num":1,
"num":1,
"precision":1,
"start_time" : 1530894315158,
"end_time":1533894312158,
"description":"007570646174654e616d6531353330363038383733343633",
"url":"007570646174654e616d6531353330363038383733343633",
"free_asset_net_limit":10000,
"public_free_asset_net_limit":10000,
"frozen_supply":{"frozen_amount":1, "frozen_days":2}
}'

Implementation

coming soon

Copyright

All content herein is licensed under Apache 2.0.

[Omo-Coc]

need to destroy trc10 tokens when unfreezing? If don’t need it, that means trc10 tokens will be issued continuously. For example, I freeze 10,000 trx, then unfreeze, then freeze again, and get trc10 tokens in cycles

[a49688448]

need to destroy trc10 tokens when unfreezing? If don’t need it, that means trc10 tokens will be issued continuously. For example, I freeze 10,000 trx, then unfreeze, then freeze again, and get trc10 tokens in cycles

That's a good question. Wait for an answer

[eodiandie]

need to destroy trc10 tokens when unfreezing? If don’t need it, that means trc10 tokens will be issued continuously. For example, I freeze 10,000 trx, then unfreeze, then freeze again, and get trc10 tokens in cycles

yes, when the user unfreezing, he will need to repay trc10 tokens to the system. you can think this 'repay' action as destroy🙃

[Omo-Coc]

need to destroy trc10 tokens when unfreezing? If don’t need it, that means trc10 tokens will be issued continuously. For example, I freeze 10,000 trx, then unfreeze, then freeze again, and get trc10 tokens in cycles

yes, when the user unfreezing, he will need to repay trc10 tokens to the system. you can think this 'repay' action as destroy🙃

great, but your description here is a bit ambiguous：“When users want to unfreeze, they need t return the corresponding tokens/vouchers before they can unfreeze”

"need t" should be changed to “need to”

[Cletitia]

need to destroy trc10 tokens when unfreezing? If don’t need it, that means trc10 tokens will be issued continuously. For example, I freeze 10,000 trx, then unfreeze, then freeze again, and get trc10 tokens in cycles

yes, when the user unfreezing, he will need to repay trc10 tokens to the system. you can think this 'repay' action as destroy🙃

Then assuming I transfer those TRC10 tokens to someone else, the payee can have the right to unfreeze the corresponding TRX, right?

[eodiandie]

need to destroy trc10 tokens when unfreezing? If don’t need it, that means trc10 tokens will be issued continuously. For example, I freeze 10,000 trx, then unfreeze, then freeze again, and get trc10 tokens in cycles

yes, when the user unfreezing, he will need to repay trc10 tokens to the system. you can think this 'repay' action as destroy🙃

great, but your description here is a bit ambiguous：“When users want to unfreeze, they need t return the corresponding tokens/vouchers before they can unfreeze”

"need t" should be changed to “need to”

thanks for your clarification. users need to return the trc10 tokens he received when freezing trxs.

[eodiandie]

need to destroy trc10 tokens when unfreezing? If don’t need it, that means trc10 tokens will be issued continuously. For example, I freeze 10,000 trx, then unfreeze, then freeze again, and get trc10 tokens in cycles

yes, when the user unfreezing, he will need to repay trc10 tokens to the system. you can think this 'repay' action as destroy🙃

Then assuming I transfer those TRC10 tokens to someone else, the payee can have the right to unfreeze the corresponding TRX, right?

the word payee, I assume it is the person who receives from you. I don't think he has the right to unfreeze the corresponding amount TRXs. Let's assume a scenario, a new user who never freeze any TRX , then you send some TRC10 tokens to him, he can not unfreeze any TRX, because he never freezes andy TRX.

I want to clarify that, in this TIP, the TRC10 token receive when freeze TRX is a kind of rights/voucher bound to the user himself which he can use these TRC10 tokens to fulfill some things in the future(eg: vote or somethings else).
@Cletitia if you have any questions, please comment without any hesitation🙂

[Cletitia]

need to destroy trc10 tokens when unfreezing? If don’t need it, that means trc10 tokens will be issued continuously. For example, I freeze 10,000 trx, then unfreeze, then freeze again, and get trc10 tokens in cycles

yes, when the user unfreezing, he will need to repay trc10 tokens to the system. you can think this 'repay' action as destroy🙃

Then assuming I transfer those TRC10 tokens to someone else, the payee can have the right to unfreeze the corresponding TRX, right?

the word payee, I assume it is the person who receives from you. I don't think he has the right to unfreeze the corresponding amount TRXs. Let's assume a scenario, a new user who never freeze any TRX , then you send some TRC10 tokens to him, he can not unfreeze any TRX, because he never freezes andy TRX.

I want to clarify that, in this TIP, the TRC10 token receive when freeze TRX is a kind of rights/voucher bound to the user himself which he can use these TRC10 tokens to fulfill some things in the future(eg: vote or somethings else).
@Cletitia if you have any questions, please comment without any hesitation🙂

You can say this is rights/voucher, but it still follows the TRC-10 standard and can be transferred to anyone else. The acquirement of these TRC-10 tokens means the the owner transfers his/her rights/voucher to the receiver. The token would be meaningless if the receiver cannot use these tokens to unfreeze the corresponding TRX.

[bondibox]

You start with a couple of premises, first that "the annualized reward of voting is only about 7-8%," (emphasis added)
At 8% TRON is one of the highest, if not the highest yield staking coin. Please back up your assertion with examples of higher yielding coins.

Secondly, you say "a low staking rate is not conducive to the security and maintenance of the whole network," while this is true, and although TRON's amount staked is less than other coins, 33% of TRX supply is held by TRON Foundation, so TRX is really staked at more than 40% of circulated supply. Moreover, a majority of nodes are run by Justin, TRON, its subsidiaries, partners and family. It is beyond doubtful that someone could overtake enough SR positions to break consensus and fork the chain.

In conclusion, what good is an additional 3% APR when the value of the asset continues to languish as other coins have increased in value by 3x, 4x or even 5x over the past year?

"Staking will increase the value of TRX" they say. This is what's known to economists as pushing a wet noodle. It treats the byproduct as a catalyst, that with just a little more incentive TRX will become an attractive choice to investors. As much as TRON likes to tout its transaction numbers, my feeling is that TRON is failing to meet adoption projections and a closer inspection of what has created reluctance to adoption is where we should be focusing our attention.

[eodiandie]

You start with a couple of premises, first that "the annualized reward of voting is only about 7-8%," (emphasis added)
At 8% TRON is one of the highest, if not the highest yield staking coin. Please back up your assertion with examples of higher yielding coins.

Secondly, you say "a low staking rate is not conducive to the security and maintenance of the whole network," while this is true, and although TRON's amount staked is less than other coins, 33% of TRX supply is held by TRON Foundation, so TRX is really staked at more than 40% of circulated supply. Moreover, a majority of nodes are run by Justin, TRON, its subsidiaries, partners and family. It is beyond doubtful that someone could overtake enough SR positions to break consensus and fork the chain.

In conclusion, what good is an additional 3% APR when the value of the asset continues to languish as other coins have increased in value by 3x, 4x or even 5x over the past year?

"Staking will increase the value of TRX" they say. This is what's known to economists as pushing a wet noodle. It treats the byproduct as a catalyst, that with just a little more incentive TRX will become an attractive choice to investors. As much as TRON likes to tout its transaction numbers, my feeling is that TRON is failing to meet adoption projections and a closer inspection of what has created reluctance to adoption is where we should be focusing our attention.

Hi,bondibox.Thanks for your reply .as you mentioned many critical questions in this comment.we will adjust this design later (may draft a new tip later)

[eodiandie]

You start with a couple of premises, first that "the annualized reward of voting is only about 7-8%," (emphasis added)
At 8% TRON is one of the highest, if not the highest yield staking coin. Please back up your assertion with examples of higher yielding coins.
Secondly, you say "a low staking rate is not conducive to the security and maintenance of the whole network," while this is true, and although TRON's amount staked is less than other coins, 33% of TRX supply is held by TRON Foundation, so TRX is really staked at more than 40% of circulated supply. Moreover, a majority of nodes are run by Justin, TRON, its subsidiaries, partners and family. It is beyond doubtful that someone could overtake enough SR positions to break consensus and fork the chain.
In conclusion, what good is an additional 3% APR when the value of the asset continues to languish as other coins have increased in value by 3x, 4x or even 5x over the past year?
"Staking will increase the value of TRX" they say. This is what's known to economists as pushing a wet noodle. It treats the byproduct as a catalyst, that with just a little more incentive TRX will become an attractive choice to investors. As much as TRON likes to tout its transaction numbers, my feeling is that TRON is failing to meet adoption projections and a closer inspection of what has created reluctance to adoption is where we should be focusing our attention.

Hi,bondibox.Thanks for your reply .as you mentioned many critical questions in this comment.we will adjust this design later (may draft a new tip later)

hi, we have drafted a new issue, welcome to discuss here.