Much is said about Bitcoin halving, but 2020 also reserves news in consensus protocols for other currencies, including NULS.
2020 has been known as the “year of halving” and much of this is the fault of the event that will take place within a few more days on the Bitcoin network. However, several other forks and altcoins will experience a similar event this year, such as BCH, BSV, DASH and NULS.
In the blockchain system, to maintain network operations and stability, it is necessary to continuously produce new currencies or charge service fees to encourage the miners responsible for this maintenance. At first, to attract a greater number of miners, more coins are usually produced, but the value of these assets will drop if the speed of output be too big.
In order to maintain stability in both the value of currencies and the entire network, there are blockchain systems that generally determine a reduction in block output in their consensus algorithms.
On this basis, it is time to delve into the adaptation that NULS will actually make.
Change in the NULS consensus model
In July 2019, the NULS community counted on a vote in which a proposal for a maximum amount of coins was approved, locking in 210 million units.
After the proposal was approved, NULS updated its protocol to adjust the method for calculating consensus incentives. After July 12, 2020, the total amount of monthly consensus incentives in the mainnet of NULS will drop by 0.4% month on month compared to what occurred before the update.
In other words, the total amount of consensus incentives before adjustment remains the same. We consider this to be 100%. After that, the total amount of monthly consensus incentives will drop month by month and become the original 99.60%, 99.20% and 98.80%.
Why the change was necessary (and reasonable)
According to the proposal’s author and project developer, Berzeck, there needs to be a greater consensus incentive in the early stages of a network, in order to attract more supporters and reduce the risk of the first participants, but these risks fall as the measure that the project develops.
As we have seen, if the total amount and speed of consensus incentives are not controlled, excessive currencies will inevitably flow into the market, negatively impacting the interests of consumers. holders present in the ecosystem.
Advantages that the model brings to the investor
Therefore, NULS adopted the method of reducing monthly output, which will not only control the rate of inflation, but also avoid a ‘sudden halving’ like that of Bitcoin. In the case of the leading cryptocurrency event, there is a somewhat drastic reduction, all at once, which directly impacts the miners’ profits – these being much less than the costs involved in maintaining the network in the short term.
The very concept of specifying a maximum amount of coins also highlights the correctness of this proposal, passing the tranquility and reliability of a finite issue of coins.