From an economic perspective, let’s talk about the necessity of the 99 nodes of ETX
The technical role of ETX nodes will not be discussed in this article, such as increasing anonymous privacy, increasing network security and other technical issues. From an economic perspective, we will discuss why the 99 nodes of ETX(EthereumX·NET) are so important.
We know that there are two major curves often mentioned in economics: the demand curve and the supply curve.
The above is an example of a parallel shift in the demand curve, where P is price, D is demand, and Q is quantity. We can see that D1 and D2 in the figure are parallel curves.
The demand curve is extended from the utility curve. According to the law of diminishing marginal utility, assuming other conditions remain unchanged, the marginal utility of the goods will decrease with the increase in the quantity enjoyed, so the utility curve has a negative slope.
According to the demand function, Qd = f (P; Y, Prg, Pop, X), where Qd represents the quantity demanded; P represents the price; Y represents the disposable income; Prg represents the price of the related goods; Pop represents the population; X represents some influence in the future Factors of demand.
In terms of the ETX economic model, when we replace Pop with the total number of currency holders/users, when X represents node competition, it can be inferred that node competition and the total number of users holding currency will continue to generate market demand for ETX The huge impact will continue to stimulate market demand.
The total number of holders is relatively easy to understand. When the ecology of ETX continues to expand and the Dapp blows out, it can be imagined that the number of users holding coins will gradually increase.
What about node competition? Node competition requires the top 99 holders to hold at least 10,000 ETX, and the top 9 nodes have certain community management rights. Therefore, it is not difficult to imagine that the 9th largest node will exceed the 10th node by a larger amount of money in order to fight for community management rights, so as to ensure that its position will not be usurped; and the 99th node has the same reason, he has to exceed a larger number of coins than the 100th to maintain their node status from threats.
When the ETX node is opened, the 99 Dpos nodes will always be in constant competition in order to ensure their interests are not violated.
It is not difficult to imagine that no matter how much ETX will be in circulation in the future, there will always be someone who will continue to increase the holdings of ETX for the purpose of competing for nodes to ensure that they will not be eliminated. This move will continue to promote the stable increase in the price of ETX.
The supply curve is similar
Why do the ETX developers open Dpos nodes to all users? After the above discussion, in addition to the technical considerations such as network security and anonymous privacy, we can clearly feel that they are considering that the initial user base is small, and based on the consideration of mining costs, miners will form a certain pressure on the market, and the node competition mechanism ensures that all nodes will absorb part of the market’s liquidity, stimulating demand and maintaining price stability.
At the same time, a certain block reward is given to the node builders (nodes share 40% of ETX mining revenue), so both the price is stabilized, and the security and privacy of the ETX (Ethereumx.NET) blockchain network are guaranteed.
According to the official ETX community, global Dpos nodes will be opened in August 2020, after the airdrop.
Ethereumx·NET white paper
Marshall, “The Principles of Economics”
Joan Robinson, John Itwell, “Introduction to Modern Economics”