Smart contract driven minting

Introduction

The REIT token is the utility token for Reitcircles. Having a utility token is desirable for any semiclosed economy. For example, the document verification process, which is an integral part of the Reitcircles project, requires work to be completed by lawyers, notaries, etc., whose monetary compensation will be covered in part by the utility token.

The value of the REIT token comes from its demand (supported by its utility) and its scarcity. This mirrors what happens with traditional and novel forms of money, like Gold and Bitcoin.

For the REIT token, its scarcity comes from the design of a deflationary minting policy. More precisely, we have designed a minting policy, enforced by smart contracts, with the following characteristics:

A) Distribution

Minted REITs go directly to one of the following four vaults:

Corresponding addresses for these vaults are read from the Registry script. The amount of REITs minted so far is stored at the Minting-State script.

B) Deflationary Policy

The amount of tokens minted for the Community and Team follow a deflationary policy with the following characteristics:

1. The available token supply grows linearly with each passing quarter for the first 16 quarters (four years), at which point it reaches 50% of the maximum supply (as given in the third column in the table above).
2. For the next 16 quarters, the available supply grows again linearly, but with half the slope it previously had. Thus, at the end of these sixteen quarters, the available supply will have increased in 25% of the maxium supply.
3. The process continues in the same fashion for the next sixteen quarters, and so on. In other words, the REIT token minting undergoes a halving every four years.

As an example, the next graph and table show the available REIT token supply allocated to the team as a function of time.

Plot of REIT token supply for TEAM

Table of REIT token supply for TEAM

C) Flexibility

Depending on the evolution of the project, which of course has unpredictable elements, it may be desirable to introduce further incentives or constraints in the token distribution. This can be accomplished by introducing (future) smart contracts into the Community and Team vaults. Our minting protocol allows just that by making the vault addresses modifiable according to a straightforward consensus governance model. Future vaults can become script addresses enforcing whatever logic is decided upon by the community.

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