PROOF OF UTILITY
Proof of Utility is a new type of token value calculation method whereby the value of a coin will go up in price for every given number of transactions within a unit of time. We define BT as the Block of Time which is found by taking XN (number of transactions that is set as a threshold) and dividing them by DN (number of days) from the completion of the first transaction to the Xth. The Block of Time unit is a measurement of the robustness and usage of the JetSet ecosystem. It is a key performance indicator by which market forces can act naturally without any manipulation by users, vendors, or JetSet developers. The higher this number becomes the faster XN transactions are being reached.
Because the transactions will tie back to a real human being behind the JetSet account using AML/KYC verification, the BT calculation will be instantaneous, and no need to be mined / solved through a hashing algorithm. For example: If we achieve 500,000 transactions in the span of 90 days, our BT is 5555. We can then take that and plug it into the next formula to calculate the VT (Value of Token). To find the VT, we plug in the BT and divide it by the TC (number of tokens in circulation).
If we start off with 1,000,000 tokens in circulation and a BT value of 5555, we divide that into the total number of tokens in circulation in the ecosystem. We will start with 1,000,000 tokens thus giving us a VT of $.005 after the first 500,000 transactions. After each block of 500,000 transactions is reached, we will deploy another 250,000 tokens into circulation. So long as the amount of time it takes to reach another block of 500,000 transactions and the BT continues to increase, it will keep the value of the token rising despite more tokens being introduced into circulation. The token release also ensures the ecosystem isn’t being flooded with tokens that could cause a supply glut.
This chart illustrates what the ideal execution of Proof of Utility will look like in the JetSet ecosystem. The number of tokens in the marketplace will be controlled to prevent the potentially dangerous uncontrolled rise of the token value. By adding in tokens, we can stabilize the marketplace and ensure that all users understand how much their tokens are worth. It also gives investors peace of mind that the value of the token will rise in correlation with people using the network in absolute dollar terms rather than the nebulous metric of monthly or daily active users. The number of transactions correlates directly with the number of active users, and transactions give a better measure of token robustness.
While 500,000 transactions may seem like an arbitrary number, it’s worth noting that in the world of cryptocurrency 500,000 transactions on a new coin would be an impressive benchmark. It would show a proof of adoption by users and showcase the usefulness of the token. Proof of Utility will not require staking and relies purely on users creating verifiable transactions. Because the blockchain will be made public and transactions tied to real users, the level of transparency will be unprecedented. This is a truly decentralized way of allowing a token economy to work as well, removing potential security vulnerabilities by not giving any one specific group or person the ability to influence a network either through hashing power or an unfairly large stake thus influencing consensus.
We have set a threshold at the end of our 3rd round of financing that allows us to implement Proof of Utility as the ecosystem begins its organic growth and transactions on the mainnet start to increase. By utilizing a phased deployment, we can ensure fluctuations in the price of JETS tokens are kept to a minimum and price stability is maximized.