Zenon has a dual token economy. What is $QSR used for?
1 Answers
In the Zenon Network, $QSR serves as a utility token with several key functions essential to the network's operation and security. Its uses include:
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Processing Transactions: $QSR is "fused" to process transaction within the Zenon Network. For example, a user fuses $QSR to produce "plasma". Plasma is then used to fuel transactions. After a period of time plasma can be returned to $QSR for future use.
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Launching Sentinels: Sentinels in the Zenon Network are public nodes designed to enhance the network's security. $QSR is bonded to deploy a sentinel which plays a critical role in maintaining the integrity and safety of the network against potential threats or vulnerabilities. Sentinels perform PoW and add chain weight and protect the network against sybil attacks.
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Launching Pillars: Pillars are crucial elements in the Zenon Network that validate transactions and produce blocks, key activities in blockchain networks. $QSR tokens are burned to launch pillars. In this sense, $QSR is a deflationary asset.
$QSR plays a pivotal role in addressing the "rich get richer" issue commonly seen in many Proof of Stake (PoS) networks. This problem arises in typical PoS systems where validator nodes, which are crucial to the network's integrity, receive rewards in the same currency that is used for launching additional validator nodes. As a result, validators with more resources can often expand their influence disproportionately by continuously launching more nodes, thereby consolidating more power within the network.
In contrast, Zenon Network's approach is distinctively designed to mitigate this issue:
Separate Reward and Launch Mechanisms: Pillars, which are validator nodes in the Zenon Network, earn rewards exclusively in $ZNN. However, launching additional Pillars requires the burning of $QSR, a separate utility token. This bifurcation in the token economy ensures that the rewards gained from validating activities cannot be directly reinvested into gaining further control over the network.
Balancing Network Influence: By necessitating the use of $QSR for the launch of additional Pillars, Zenon Network prevents Pillars from maintaining or escalating their dominance solely based on their validating rewards. This system inherently limits the potential for exponential growth in influence by any single participant or group within the network.
Earning $QSR through Diverse Activities: Acquiring $QSR, essential for expanding one's role as a Pillar, is not directly linked to the validating activities. Instead, $QSR can be earned through a variety of other network activities, such as running a Sentinel (another type of network node) or participating in staking. This diversification in how $QSR can be earned encourages a broader participation in the network’s ecosystem, beyond just the validating process.
Overall, $QSR serves as a foundational utility token in the Zenon Network, facilitating core activities related to transaction processing, network security, and the blockchain's operational efficiency. In addition, Zenon's dual token economy is a strategic design choice that fosters a more equitable and balanced distribution of power among its participants. It effectively curbs the potential for wealth and influence centralization, which is a critical challenge in traditional PoS systems.