Incentives are the backbone of decentralized infrastructure, and they have immense importance in modern internet-based businesses of all kinds. We have designed Tokenplace’s novel cross-coin architecture to incentivize participation in our community and the growth of our platform by giving users a share in our success.
To accomplish this, we developed a dual asset solution that overcomes two of the biggest limitations of businesses in the modern cryptocurrency industry:
- Crypto project valuations are still highly speculative, uncertain, and detached from the rest of the global economy (i.e. the “real world”).
- The value of the greater cryptocurrency market is still closely coupled with that of Bitcoin, which is highly volatile.
Together, these two things mean that even more traditionally modeled businesses in the cryptocurrency industry can see their valuations change significantly and quickly for reasons that aren’t directly related to them. Our token ecosystem is built to overcome these obstacles and to reward participants at the same time.
3.1 TOK Coin
The first piece of our solution is an exchange-utility token called TOK Coin. This digital asset is meant to reflect the value of the Tokenplace ecosystem. As the number of traders and investors using the Tokenplace terminal increases along with their cumulative trade volume, the usefulness of TOK also increases.
In addition, TOK Coin will give holders a few unique benefits:
- Voting rights to help determine the future of the platform by supporting proposed initiatives, such as adding new tools to the trading terminal
- Increased rewards from participating in our affiliate program
- Discounts to traders who hold large amounts of TOK, similarly to what Binance does with BNB
Perhaps most importantly, a portion of the total supply of TOK Coin will be kept out of circulation in a reserve. The purpose of this reserve is to provide the necessary liquidity for Tokenplace to be able to aggregate the best cryptocurrency prices from leading exchanges.
We will have corporate accounts with various crypto exchanges which will be used to place orders from our users onto the exchanges themselves. Since we can’t constantly send funds back and forth between our platform and numerous other exchanges, we need to have some stable source of liquidity for our corporate accounts in order to place orders on those exchanges in real time.
TOK Coin will be the financial vehicle that unites all of our corporate exchange accounts and connects them with the Tokenplace trading platform. At the same time, it will be used for rebalancing all of our accounts so that we consistently have the desired liquidity to be able to execute trades immediately at the best prices across the market. This is described in greater detail in Section 5: System Architecture.
We will work to set up direct trading pairs between TOK and many other cryptocurrencies so that this process becomes even more efficient, but the TOK reserve will give us the funds needed to place buy orders on other exchanges from the beginning through the TOK → BTC → altcoin bridge.
3.2 TOP Token
TOP is a security token that will be backed by the valuation of the Tokenplace trading terminal infrastructure, linking it to the economic metrics of the real world. When more users join Tokenplace and use the trading engine to get the best prices on their trades, that will be reflected as an increase in the company’s value.
These tokens will be issued in exchange for part of the company’s equity and will act as one of the primary funding sources for future growth initiatives. We will announce more details about the token offering to the public once we have them.
One of the main reasons to launch a security token is that it provides greater stability than a purely digital currency that isn’t backed by any traditional assets. As we witnessed in past cryptocurrency market cycles, building valuable infrastructure doesn’t shield a project’s utility token from drastic overvaluation or undervaluation. The market’s performance as a whole is strongly correlated with that of Bitcoin, which itself has mostly speculative value at this time. Therefore, a utility token on its own would likely lack the kind of stability that we are looking for given that we plan to use TOK for liquidity on all of our Corporate Exchange Accounts and our Primary Account in the Tokenplace platform.
3.3 Volatility vs. Balance
Cross-coin architecture was conceptualized specifically to provide greater balance in our ecosystem between the crypto world and the traditional business world. The idea is that more users joining the platform will boost the value of the business itself, as reflected by TOP. This is the bridge to the real world, with a relatively stable valuation based on major fiat currencies (e.g. USD, CNY, EUR, GBP, JPY).
Meanwhile, TOK connects us to the cryptocurrency world and gives us the vehicle for liquidity that we need to build a high-performance exchange aggregator. TOK and TOP are united in the middle at the Tokenplace platform and ecosystem. By building a valuable company, we can achieve balance despite the volatility of the cryptocurrency market.
Today, value from traditional finance into the crypto world goes from fiat currencies, through exchanges and BTC, and is transformed into assets that are valued purely in crypto terms. The shaky, disjointed exchange infrastructure that exists today (Diagram 1) causes a fundamental gap between real-world and crypto valuations, which our model aims to alleviate.
The flow of value in the existing model goes FIAT → EXCHANGE → CRYPTO and vice versa, but there are no assets that really join fiat and cryptocurrency in a stable way. To that point, the majority of existing stablecoins are merely tokenized fiat currencies, while more innovative approaches like Maker DAI don’t use fiat as collateral, but still have their value pegged to fiat.
In the Tokenplace model, value moves fluidly in a loop:
[FIAT / TOP] → Tokenplace ← [TOK / CRYPTO]
Here, TOP can easily be exchanged for fiat currencies while TOK can easily be exchanged for cryptocurrencies. Both benefit from the growth of the Tokenplace business which connects them, and TOK becomes a relatively reliable and stable cryptocurrency relative to the rest of the market which still depends strongly on Bitcoin. Ultimately, we are implementing this cross-coin architecture because we believe it will foster better relationships between our business and the people who come to rely on Tokenplace for managing their digital assets.