Ergon energy comes from a single TRX pool, our model is not based on individual buy/sell order matching.
The smart contract will pay the fees only for renting energy on small orders (the threshold is still tbd), the rest of the operations (deposit, withdraw, etc…) will be paid by the user (we’ll start like this, but the policy could change).
The ERG token price is determined by the amount of TRX inside the contract, so it’s intrinsic to the token itself, since the ERG contract and the marketplace are one single entity. When someone rents energy the TRX paid go in the ERG contract, so the amount of TRX for each ERG in circulation increases and so does the price. When you withdraw TRX and burn ERG you will always get more TRX you put in. The difference is made by the rewards accumulated and automatically compounded in the ERG contract. With this method a user could just deposit TRX, forget about them and still increase the value because the rewards are added in the ERG price, there’s no need to claim them periodically and do manual compounding. The jackpot rewards are to be claimed every week, but they apply only to USTX holders.
Let me make an example: let’s say that at the beginning 1 ERG = 1 TRX and you deposit 1000 TRX in the pool, getting 1000 ERG in return. After some time 10 TRX have been added to the contract because energy has been sold to users. Now there are 1010 TRX for the same amount of ERG (1000), so each ERG now is worth 1.01 TRX. If you decide to sell all your ERG and get your TRX back, you’ll get 1010 TRX.
The ERG token will be tradeable also in other ways, outside Ergon (like for example in a DEX pool). In that case the price will be determined by arbitration and will likely be a little bit lower than the exchange rate on Ergon. The advantage of trading outside our platform is that there is no lock on a DEX, while on Ergon the user will need to wait 15days to have the funds unlocked (this period is set by the network, not the Team).
If you look back to our previous dApp, every one had the goal to increase the utility of USTX token by giving some advantages to USTX holders when using such applications. WARP gives up to 50% higher APR to USTX holders. T-Boost generates buyback on USTX DEX, supporting the token price.
With Ergon there are benefits to USTX holders, when renting and when providing.
On renting users can get up to 10% of discount on daily price. The discount depends on how many USTX are locked in stake compared to the energy order size. The maximum discount is achieved with at least 1 USTX every 2 Energy point rented. For example: you have 100,000 USTX in stake and you rent 400,000 energy point, you’ll get 5% discount (having 1 USTX every 4 Energy). The dApp interface will show the user the effective price before order confirmation.
For TRX suppliers the advantage is in having higher rewards if holding USTX in locked staking. This is done through the jackpot, that hold 25% of the sold energy revenue. The pot is accessible only to users with some USTX in stake. They will get at most a share of the pot proportional to the ERG share of the user. The max amount is achieved when having 1 USTX for every ERG held. For example:
we have 1,000 TRX in jackpot
a total of 1,000,000 ERG in circulation
a user has 100,000 ERG and 50,000 USTX in stake
User ratio is 0.5 (50,000 USTX / 100,000 ERG)
His share of the jackpot is 1,000 TRX * 100,000 ERG / 1,000,000 ERG * 0.5 = 50TRX
If a user has at least as many USTX as ERG he’ll get 100% of the energy sale share.
The jackpot is not distributed automatically, but every week every user has to claim his reward. The part of the jackpot that is not claimed goes to the team as fees.
I think that the ERG price on the open market will never differ too much from the price on the platform, because at some point users will begin to arbitrage against it to make profit. But to answer your question, yes any user can decide to sell ERG for TRX on the market and never come back to Ergon. On the same way another user can buy ERG on the market and start gaining value on the energy sale, without having touched the Ergon dApp at all.
Let’s say that the price on the platform is 1 ERG = 1 TRX and there is a pool on JustMoney exchange with 1,000,000 TRX and 1,000,000 ERG tokens, so the price is the same. For some reason a user needs to quickly cash out and cannot wait for the unlock period, so goes over to JM and sells 10,000 ERG getting 9,901 TRX. Now in the pool there are 1,010,000 ERG and 990,099 TRX and the pool price is 0.98 TRX, or 2% lower than the platform. Another user sees the opportunity to gain a 2% in two weeks, so he decides to buyback ERG on the DEX paying 0.98 TRX each and then burn them on Ergon. In the end the first user got his TRX back without waiting paying a 2% penalty while another user gained 2% (waiting 15 days to get it).
I see this as a flexible and market driven way to generate many opportunities for users around the Ergon platform.
Thank you for providing additional details on the benefits for USTX holders in the Ergon project. But for clarity;
How is the discount for USTX holders on energy renting prices determined? Is it a fixed percentage based on the ratio of USTX locked in stake to the energy order size, or does it depend on other factors such as market conditions or demand for energy? It would be helpful to understand the mechanics of how the discount is calculated and whether it is subject to change over time.
Thats very lovely, so the arbitrage will serve as a balancer that will help hold the two tokens to oscillate about a fixed range.
So what happens to those who buys ERG from the open market, do they stand a chance to benefit from the above without visiting the Ergon app.
We know people who held safemoon without staking and saw their portfolios increase through buying and selling of the tokens whiles they enjoy tax returns.
Absolutely, very ERG holder benefits from the energy sale, regardless of where they got the tokens. A user could buy from a DEX and sell after a while on the same DEX enjoying the token price increase. Of course the price on the market could be slightly different from the price on the Ergon platform and so be an additional source of revenue for those willing to wait 15 days and do some arbitration. My guess is that the price on the open market will always be a little lower (1%-2%) than the price on the platform.
In a few hours Prop 84 will be effective and Stake 2.0 will be live on mainnet. The Team worked relentlessly in the past weeks to try to shorten the dev time, so we can announce that a limited functionality beta will be released within the next couple of days. The energy rental part will be operational, while the TRX deposit will be tested a few more days, to make sure that the users funds are correctly handled.
Stay tuned for more details in the following hours.
Ergon is live on mainnet, the first 1000 ERG tokens have been minted. Hopefully tomorrow the first open beta will be relased so that users can start renting energy and test the system.
Ergon seems to be a promising project that could offer cost-effective and profitable energy solutions to users while promoting community-driven initiatives and cooperation.
Thanks to all our supporters. In a few minutes Ergon will be open for users seeking to rent energy at affordable prices and with flexibility. Get ready!
