Changes in Financial Services
Anyone can join at any time
In epoch 2.1, only those who registered before the epoch started could join the contest. Now in epoch 3.0, anyone can join the contest at any time.
The only advantage of registering upfront is that the registered users will be offered CML coupons at a fixed price (but not free as in epoch 2.1.)
CML coupons are no longer free
Those registering before the start of the contest can still apply for CML coupons. But the user needs to pay COFFEE when redeeming their coupons. The price will be as follows:
- Type A: 2000 COFFEE
- Type B: 1000 COFFEE
- Type C: 500 COFFEE
Users can only redeem all of their coupons at once. For example, you cannot redeem one type C seed while keeping your other CML coupons untouched. So when you fill in the registration form, make sure you’re OK to pay that much COFFEE upfront for each type of seed. COFFEE can be borrowed by all contestants at an interest rate to be discussed below.
All transfers are disabled
You cannot transfer funds or coupons between different accounts. This is to prevent cheating and to disincentivize the use of multiple accounts.
All fund transfer transactions are listed on the blockchain. Anyone breaking the no-transfer rule will be disqualified and removed from the rewards list.
No initial funding (but unlimited Genesis Loans of COFFEE)
You won’t have any initial funding as you did during the epoch 2 mining contest. But you can now borrow COFFEE with no limitations. Whenever you need funds, you can borrow COFFEE, and then convert it to TEA at the prevailing exchange rate. But take note that this is a debt: COFFEE has a compound interest rate of 0.2% per 100 blocks (this number is subject to change.) If you don’t manage your debt well while accumulating assets during this epoch, you might end up with a negative balance!
COFFEE debt must be paid off for contestants to be qualified for the final rewards
Everyone needs to pay off all of their COFFEE debt at the end of the epoch. Failure to do so results in disqualification for any contest rewards. Given that most people may rush to pay off COFFEE close to contest end, the exchange rate may be high at that point when many are attempting to get the necessary COFFEE for repayment. It would be wise to consider paying off your COFFEE debt earlier than others.
COFFEE has both a credit and debt interest rate
In epoch 2.0, there was no COFFEE debt. If you had COFFEE in your account balance, you could let it sit and earn compound interest. Now, since you can borrow COFFEE, there will be a debt interest rate as well. The debt side has the same compound interest rate as the credit side. The initial interest rate is set to 0.2% per 100 blocks. Compared to the 0.5% initial rate of epoch 2, this is much lower. But since it’s a compound rate, the number could result in a climbing account balance for the amount borrowed over time. Please keep a cautious eye on your loan balance when borrowing COFFEE.
COFFEE interest rate may be changed by the DAO
The interest rate is not a constant number. The DAO may change the value during the contest. We plan to give advance notice of any interest rate changes in our telegram group.
Be aware of compound interest
The compound interest rate may look like just a small number at the beginning, but it may turn your balance into a scary number over time. Make sure you always keep your debt under control.
The Genesis TEA Loan has a variable interest rate given by the AMM curve
In epoch 3.0, you can still use your frozen CML seeds as collateral for a Genesis Loan. The interest rate for our first mining contest in epoch 2 was 0.1 % flat. Now, the rate will change based on the remaining TEA in the liquidation pool of the Genesis Loan. This is calculated using the AMM curve. That means the less TEA there is remaining in the liquidation pool, the higher the interest rate. The interest rate will be a flexible compound interest rate that is recalculated every 100 blocks. So no matter what the rate it was when you took out the loan, the current interest rate you pay is whatever the rate is for the most recent 100-block recalculation.
Genesis TEA Loans can be paid off in full or just the interest to extend the loan
In epoch 2.1, you couldn’t only pay the interest due to extend the loan. Now you can extend the loan as long as you pay the interest accrued by the end of the loan due date.
You still have the option to pay off the loan entirely.
You can see how much Genesis TEA Loan debt you have outstanding in your wallet:
Top up is back
During epoch 2, several contestants fell into trouble when their remaining TEA was too low to make any transactions. Although it’s always best to avoid running out of gas on the way to the gas station, sometimes it still happens. To help those who’ve fallen below the approximate .0003 TEA balance necessary to make transactions, we’ve added back the top-up button. You can click the top-up button to get 0.1 TEA. It won’t make you rich, but it’ll at least help you drive to the gas station!
Mining machines are no longer free. Contestants will use COFFEE to buy one
You will now not only need to pay the 1000 TEA stake (or 1 staked CML) to start mining, epoch 3 will also require paying COFFEE to buy a mining machine. Going forward, this is what’s needed to start a mining machine during epoch 3:
- a defrosted CML seed to plant into the mining machine.
- 1000 TEA or 1 CML (defrosted or not, doesn’t matter) for the initial staking slot.
- an amount in COFFEE to pay for the mining machine itself.
The mining machine price in COFFEE depends on the type of CML seed that’s being planted. We currently require any type A CML to pay 2000 COFFEE, any type B CML to pay 1000 COFFEE, and any type C CML to pay 500 COFFEE. The mining machine is not reusable. If you unplant a CML from a mining machine, that mining machine is also gone.
Epoch 3 Bonding Curve Investment
In epoch 2, there were two ways for miners to make TEA mining income: performing mining yourself or staking onto another mining CML.
In epoch 3, there are two new ways to make TEA income besides only mining and staking.
- You can be an investor of a TApp by buying into its Bonding Curve. You invest in a project just like venture capitalists do.
- You can host a TApp using your mining CML to earn a hosting fee. Just like Amazon charges you a cloud hosting fee, you are paid this fee when you are a miner providing the cloud infrastructure.
For epoch 3, each TApp will represent a particular YouTube video. The winning video (the one with the most views) will receive a separate prize of $1500 to be distributed to its token holders.
Invest in TApps
In epoch 3, there’s a new top-level TApps page.
This page shows the existing TApps and buttons allowing you to either invest or host any particular TApps.
To invest means you’re a shareholder of this TApp just like when you buy a company’s stock. The difference is that you’re buying from a smart contract called a bonding curve. You pay TEA to the bonding curve and receive a particular TApp token in return. For example, in the screenshot above, you’ll have DDF and TYB tokens as your assets if you pay TEA to buy them. The price of the token is calculated by the AMM based on each token’s bonding curve. Generally speaking, the earlier you invest, the lower the price.
(in this image, n > 1, but we set n = 1/2 and m = 1 and 0.7)
In epoch 3, we use the basic bonding curve of
The a is 1 for the buying curve, 0.7 for the selling curve. The integral
is used to calculate the TEA amount for the funding pool and the reserve pool.
If the bonding curve is a new Defi concept to you, please google for more details. Simply put, if more tokens are sold (total supply increases), the higher the price of the token and the market cap.
Sell your investment
Unlike traditional order book marketplaces, you don’t need a buyer when you sell your investment token. You’re actually selling it to the bonding curve. The selling price is based on the predefined rule that the selling curve is 70% of the buying curve. If you buy a token and sell it immediately you’ll lose 30%. The 30% goes to the TApps owners’ funding pool.
Dividend (consumer usage) and expense(paying the hosting fee)
The income and expense of the TApp will go directly to and from the bonding curve as well. The TApp here is a simple DAO that is managed by code and not by the app developers. The bonding curve will automatically calculate how to distribute revenue to shareholders or take tokens from a wallet to pay for expenses.
When a consumer pays to use this YTB TApp, the funds will be distributed based on the bonding curve’s predefined logic. This also holds true for the expenses, such as paying for hosting fees.
The bonding curve is constantly changing. Every consumption and expense event will make the price change a little. This is how a typical AMM (Automatic Market Maker) application works to attract venture capital.
Once you’ve invested in any TApps, you can see them on your Assets page under the My investment in TApps tab:
What if I have no idea about bonding curves and fancy equations?
It’s not important that you understand all the nuances of the bonding curve in order to use it effectively just as you don’t need to know how an engine works to drive a car. Very few people in the world totally understand how Wall Street works but they still use their financial services every day. Of course, those who understand the important aspects of the financial system are in a better position to make more money.
If you don’t yet understand how the bonding curve works to set prices, try to buy or sell a TApp’s token and notice how the price changes. Sooner or later you’ll get the gist of how the bonding curve price correlates with supply. Bonding curves are becoming an increasingly important part of more and more crypto projects, so learning about them now will put you ahead of those Wall Street people.
Epoch 3: hosting TApps = hosting income
TApps need to be hosted in mining machines to run. This is exactly what the TEA Project is designed for — to make a decentralized cloud computing platform.
If your mining machine starts without hosting any TApp, it just makes the basic RA (Remote Attestation FaaS public service fee). That amount is very little, not even enough to cover the COFFEE interest you paid for the loan amount to buy your machine. So to prevent financial insolvency, you have to find a more profitable usage of your mining machine, which is to host TApps and earn a hosting income. That is the better way to utilize your mining machine.
Host / unhost TApp
In the TApp list, you can host or unhost TApps for your mining CML. There are few important rules you will need to know.
Performance requirement and remaining performance
Your CML has to have enough remaining performance to cover the cost of the TApp’s Host performance requirement. Because your CML has limited performance, the TApps it can possibly host is also limited. With this limitation, you should be smart enough to choose the TApps that make the most out of your CML’s performance.
Current /Max hosts
For most TApps, as long as the hosting CML reaches a minimum threshold, the application performance will be good enough. More hosting CMLs for the TApp won’t increase performance past a point and sometimes might even cause the performance to degrade. So every TApp has to have an upper limit called Max hosts.
Another consideration is the cost of hosting. The more hosts a TApp has, the more the TApp will need to pay for its hosting fee. So if there’s a popular and profitable TApp in the list, you’ll need to rush to host it before it reaches the max hosts number.
In epoch 3, we simply set Max hosts to a fixed value. In real life, these numbers are constantly changing due to the scale changes as required by the TApp.
YTB TApp simulator
The TApps for epoch 3 will be simulated TApps each based on a YouTube video that covers some aspects of the TEA Project. We have a non-playing character (NPC) called sudo who will create 3 videos TApps, and pay TEA as a consume action every day based on the view numbers on YouTube. The sudo account will check YouTube view numbers at a moment in time each day. The one who has the largest increase will win the TEA for that day.
- The sudo account notes who has the largest gain in views compared to 24 hours ago and notes down the increased view count (let’s call it delta) of the winner for that day.
- The sudo account pays one TEA for each increased view of the winner (delta TEA in total) using the “consume” function every day. For example, let’s say video A has the most views in the past 24 hours. It was at 100 views yesterday but now is at 180 views today. Sudo will consume 80 TEA into video A’s TApp bonding curve.
Tips and tricks for new epoch 3
Many of you have probably gained many tips and tricks from epoch 2. Most of them are still valid for epoch 3, but some of the strategies will need changing. You can learn about and share your best strategies over at our mining contest strategy discussion.
Hosting and investments make much more than dumb mining
Dumb mining means you start a mining CML but do not host any TApps. In this case, the CML will only run public services like RA which makes very little money. To be more competitive, try hosting TApps to earn the hosting fee.
As long as you make some TEA from mining or simply from incurring COFFEE debt, use your TEA to invest in the bonding curve of TApps. If you invest in the correct TApp, it makes much more than the compound interest. Of course, if you don’t choose wisely, that will affect your standing on the leader board. Your total asset value is calculated based on how many TApp tokens you own multiplied by the current token price. Because the market cap of your bonding curve tokens is part of how your assets are evaluated on the leader board, it’s very important to choose your YTB TApp wisely.
YTB TApps contest
Contestants can choose to invest in YouTube videos TApp and then use their social influence to increase the value of their YTB Tapps investment. They can use curation marketing and their social media influence to pump up the views by sharing the YouTube link and spreading its popularity on social media.