Our token model: it makes CENNZ
By: Aaron Mcdonald
Tags: Cennznet, Decentralized Apps, Blockchain, Staking, Token Economy

This is the first blog on our series on Centrality’s token economics. It is based on the keynote that CEO Aaron McDonald presented at Japan Blockchain Conference 2019.

2019 is going to be a big year for Centrality. It’s important that we take CENNZ holders on our journey, so we wanted to provide an overview of what’s ahead for CENNZnet, the CENNZ token and how we’re encouraging developers and partners to participate in our network.

Setting up CENNZ for success

Our intention has always been to make CENNZ as useful as possible. How do we make CENNZ useful? We build a great network that developers want to use to build great applications that users will want to use.

The infrastructure of our platform, CENNZnet, will have three layers. At the base will be the network which provides the underlying infrastructure to build applications on top. It’ll manage basic functions like how nodes talk to each other, how we maintain consensus in the network and how information is stored in the network.



On top of the network layer, is our core services. These are things like Sylo, SingleSource, CentraPay and CENNZX. Developers will use these core services to build applications with ease. The core services work differently to traditional on chain dApps , because they will have access to special permissions and APIs. This will make it easier to create really exiting user experiences for those services which are common to most applications.



Finally, we have the dApp ecosystem that builds on top of those four services and uses the network underneath. This structure is unique to Centrality and we’re doing this specifically to make it easy for users to adopt. We think this approach will catch on because it will ultimately make the user experience easier.

CENNZ will be the main validation token for CENNZnet

CENNZ will help to maintain security of the network and keep transactions going. As the main validation token for CENNZnet, CENNZ will be used for staking on the network.

Why should CENNZ holders stake their tokens to participate in the network? Those who stake CENNZ as they process transactions will receive CENTRAPAY spending tokens which can be used as gas in the network. This means we’ll have a two-token system where there are separate tokens for staking and spending.

Our token economy has been designed with developers in mind — if you’re building an application, you want predictable costs to understand how to make a profit. In popular blockchain systems today, the costs of development are variable and subject to external factors which are outside their control which makes it hard to plan ahead. If I’m building an application and the network gets congested for a reason totally different to my application, the cost of running my app goes up. At the same time you want to optimise usage of the network and prevent attacks. We think we have a great way of achieving predictable cost and optimal usage.

Token holders will be able to monetise CENNZ

The demand for CENNZ will be driven by dApps. Developers will have to buy spending tokens off CENNZ holders and use them in order to make their applications work. The more apps in the ecosystem, the more spending tokens in circulation the better off CENNZ holders are.

Our token economy has been designed to encourage developers to buy CENNZ also. Developers will need spending tokens to use the network, but they’ll also be incentivised to buy CENNZ to participate in the network as well. CENNZ will be required to perform a number of tasks, such as reserving a name space if developers want a domain inside of the network. But generally, we want to maintain as low a cost as possible, to encourage as many applications to be built.

For special permissions, apps will need to be approved

Apps like Sylo and SingleSource have special permissions in our ecosystem and sit within the blockchain runtime. We want the community to be able to choose new applications into this special domain. CENNZ holders will be able to use their tokens to help in this curation process for applications.

In short, token holders will be able to take their CENNZ, start using them in the network for staking. Those rewards are needed by developers to keep building the ecosystem and using the applications in Centrality.

We’ll be focusing a lot more this year on the consumer marketing and developer marketing, which means it’s going to be a huge year for us for getting CENNZ widely known around the world and more applications built on the network.