The Basics

The basics of Genius are ULTRA SIMPLE. It is simply a staking or mining token (common crypto nomenclature), with many things going on behind the scenes to preserve and grow value over time. 

These items include: 

1. Unique Math - Detailed below to control penalties for end stakes.

2. Dual Staking Policies -  Detailed below.

3. Endstake AI Monitoring - An algorithm (AI) built into the contract constantly monitoring the state of end-user commitments to adjust mining rewards in the case of a wave of commitment changes (e.g. such as stakers ending their stakes early during times of market dips).

4. Built-in Auction Functionality - Ability to fulfill others’ promises (stakes/mines) and receive a reduced entry point, higher effective ROI, while also providing liquidity to those that would have to otherwise break their commitment.

5. In Contract Treasury - More to be revealed after launch.

All of the above functionality will be available on the first Decentralized Application (DAPP) to be launched at https://geni.app.

The Genius token can be used to store value (save) and generate passive income over a period of time.  This is done by “Genius Mining”.  Similar to Bitcoin Mining, the new Genius tokens are only paid out to those who are mining for (or staking) Genius tokens.  With Bitcoin Mining, you need to purchase expensive mining equipment, use lots of electricity, and trust a mining pool.  All that disappears with Genius, as it’s built on multiple layer 1 blockchains, providing an environment that has much lower barriers to entry and better security.

With Genius Mining, all you need is the Genius token and to create a commitment (promise) to generate passive income for a number of days that you choose. Genius call these commitments “miners”.

Unlike Bitcoin Mining, Genius Mining does not need expensive equipment and useless computations that ultimately burn through electricity. It is being built on the most environmentally friendly crypto platforms, and can–in the future–be deployed to other such layer 1 solutions. 

Behind the scenes, the contract’s math and programming logic ensures that the commitments made by the end users are fulfilled.  This is done by dynamically lowering the Mining rewards via penalties for advanced miners and implementing strategic, and well-known to the end user, blackout periods where basic miner commitments cannot be ended early.  Genius is effectively monetizing time, attention, and one’s dedication to their commitment over time.

In order to encourage a healthy economy and allow users access to liquidity, there are a number of tools being deployed to allow users to offload their mining commitments to others in the cryptosphere.  Although the Devs can’t say for certain what the result of these tools and rules will be, they believe, based on extreme testing using live trading data for many other tokens through our models, that their auction system (as one example) will prove to be useful for preserving end user commitments provide necessary liquidity to users who would otherwise end their commitments early and introduce selling pressure to the open market, and remove the incentive for larger market forces to negatively manipulate the Genius token asset.

Where does Genius’ value come from?

This is a very difficult question to answer, as one must forget their own subjective idea in regards to the very nature of “value”.  Genius seeks to objectively functionalize “value” to fundamentally serve the needs of all people.  For example, where does the value of gold come from?  In part it comes from the time and effort it takes to extract gold out of the ground, or its use in electronics, or its symbol of higher class when worn as jewelry. At the end of the day, gold’s value is simply derived from people agreeing that gold is mostly scarce and valuable. 

Genius agrees, for example, that the price of something (currently settled in US Dollars) is determined in part by the market, but also the underlying tools, time, materials, technology, and other components that go into product creation.  On the other hand, we also value things with no monetary value at all, such as relationships. 

To answer this question is to ask, “What is the value behind the decades of experience of those involved in creating this tool?  What is the value in the systems put in place that will help this token survive future economic storms, such as the extensive R&D that went as far as to map-out and simulate the next 50-100 years of economic changes?  What is the value of the community behind this Genius tool?"

What makes Genius valuable is also the two most fundamental things that are inherently scarce to all human beings:

1) human attention

2) the commitment of human intention.

Ultimately–from a strictly practical, pragmatic, economic, materialistic, etc. perspective– the token actually derives most of its value from the whole of crypto.  No matter what network the Genius Smart Financial Contract is deployed on, it will effectively squirrel away the value of the larger market over time.  It is for this reason that it cannot be stopped.  It is a crypto value extractor.

Liquidity Provider Registry

Genius is still in the pre-launch stages, more than 70 liquidity providers are onboard.  Most cryptocurrency ecosystems today begin their open-market sales along with a few handful of friends and partnered entities; however, Genius’s community came together to allow many individuals and institutions to benefit from the launch by doing a valuable service to all Genius users: providing the initial liquidity.  Generally, Liquidity Providers provide between $10,000 - $100,000 up-front to provide this service.

When combined with the number of exchanges, Genius could launch with over 100 Liquidity Providers and millions of dollars of liquidity.

If you are a yield farmer, liquidity provider, or if you are simply interested in learning more about Decentralized Finance (#DeFi) and providing liquidity for Genius, please join the official Genius chatroom on telegram: https://t.me/genicrypto

Tokenomics 101

Tokenomics is a simple way to refer to the overall economics of a cryptocurrency token. 

Below is the main information pertinent to the economics of Genius:

• Initial Supply: approximately 240 Billion (240,000,000,000) tokens.  These will all be airdro

• pped to participants after the Genius Sacrifice, a 28-day event held sometime in the spring/summer of 2022.

• At the maximum, an additional 14.5% of the Initial Supply, or 35 Billion (35,000,000,000) can be minted from holders of the Legacy GENI contract token.  The Legacy contract’s Ethereum / PulseChain / Binance Smart Chain address is:  0xaac1abdb4fb7a91a0e2e036dfacc45f708ed6a39

  
  

• Approximate Annual Inflation: 4.236%

• Inflation is paid out to Genius Miners on a daily basis.

• The smallest unit of Genius is a “Genito”.  A single Genius token is equal to 10^9 Genitos (1 Billion Genitos).  1 Genito = 0.000 000 001 Genius.

• Genius will be deployed to Ethereum, PulseChain, and Binance Smart Chain.

• Collateral Miners.  End users can interact with the contract directly by depositing blockchain assets as collateral to mint the principal for a Genius Collateralized miner.  These miners generate a return for the end user, and the Genius principal is ultimately used as a settlement for the return of most of the collateral deposited into the contract.

• Deflation Mechanics (i.e., burning mechanics) are triggered any time the end user modifies an Incentive Promise: collecting their Mining rewards early or late, auctioning a miner for value finality, etc.  Although the Genius tokens will be out of circulation due to burning, those burnt tokens are still considered in the calculation for new daily rewards.

Initial Token Distribution

The initial supply of Genius will be airdropped to Sacrifice participants.  A total of 240 Billion (240,000,000,000) Genius Tokens will be distributed at the initial token distribution.  For more information about the Sacrifice Phase, visit the website for the official Sacrifice event: https://sacrifice.to 

Warning:  the information contained on the Sacrifice event website is completely independent and unrelated to the Genius tokenomics explained in this white paper.  Any information derived from the Sacrifice website is not applicable, and should not be considered to be applicable, to any information contained within this white paper.

No tokens were distributed freely to founders, developers, marketing, or anyone of the like.

Throughout the entire lifecycle of developing Genius’s ecosystem, there has been a strict policy within the Genius founders and community members to not distribute any pre-launch tokens or official tokens for any reason.  Even for individuals that were paid by the community, the community agreed to remit payments with any other currency other than any tokens related to Genius.  This was done out of principle and to prevent any claims that Genius could be a “rug pull”.  Simple put: this community policy was put forth to give Genius the best ecosystem health possible.  In response, anyone who received any tokens related to Genius had burned their supply.

Therefore, the initial token distribution was done as follows:

1. The pre-token “Legacy Genius” (aka. Legaci GENI, LGENI) was only given to Liquidity Providers who promised, and were incentivized to keep their promise, to pair Legacy Genius with other cryptocurrency collateral on Uniswap v2.  Any remaining supply was burned by sending it to the “NULL Dead” address (0x000…dead).

2. Anyone could trade cryptocurrency to receive Legacy GENI on Uniswap v2 and any decentralized exchange (DEX) and/or DEX aggregators.

3. A Sacrifice Phase was announced about a year later so that anyone could receive the initial tokens without having to pay unreasonably high gas fees to trade for LGENI on any DEX.

4. Upon launch, anyone who took place in the Sacrifice Phase is able to use the Genius DAPP to claim their tokens.  Furthermore, holders of the Legacy GENI token can use their LGENI to create Genius Miners, which ultimately results in the holder receiving the official Genius token after 90 or more days that the holder specifies within the DAPP.

Supply and Demand Fundamentals

Genius’s Tokenomics will be indexed by the following categories:

• Performance Rewards: (increase of supply) these are ways that new tokens enter circulation.  Think of these like “block rewards” for blockchain miners.

• Pumpamentals: (increase of demand) mechanics intended to incentivize demand on the open market, thus to increase the “Buying Pressure”.  Furthermore, pumpamentals preserve demand by limiting Selling Pressure.

• Burnamentals: (decrease of supply) actions designed to decrease supply and remove the ability for satisfying the current level of demand.

Genius also has inherent Liquidity.  The Genius Smart Financial Contract gives end users the opportunity to receive a “better deal” by adding liquidity to the contract.

Who Owns or Controls Genius?

Genius is a decentralized smart contract.  It is a piece of software that runs on a smart blockchain.  Therefore, it is not possible for any single person or entity to own, control, or financially benefit from Genius.  Genius is entirely operated by the actions of its voluntary end users.  The end users are entirely responsible for their interactions with the software and with any actions they take with the Genius token. 

Use Genius at your own risk.

Mining for Genius Token

To mine for Genius token, you will use the DAPP software to create a Genius Miner.  You can also think of the “Miner” as a type of Incentive Promise that generates and accumulates rewards (via Reward Shares) during the promise period.  Reward Shares allow Genius Miners to receive Rewards of extra GENI every day.  When you mine for Genius, the DAPP software will invoke a function of the Genius smart contract to commit your GENI for a period of days.

For example, you may “stake” 100 GENI for 30 days, and during this time you may not access your GENI.  You will not be able to transfer or interact with the GENI that you stake while it is mining.  After the 30 days, your Genius Mining Reward Shares will expire, and you must end your mining stake to receive the 100 GENI plus the Rewards for your Incentive Promise.  For those who understand the Certificate of Model metaphor, it is also an appropriate comparison for the functionality of a bank’s Certificate of Deposit product, also known as a “Time Lock” deposit.

The Genius Rewards are drawn from a pool of Reward Shares, where your number of Reward Shares relative to the pool will calculate (proportionally) the extra GENI your stake receives when ending your stake.  In other words, the Rewards you receive is based on your shares divided by the total number of shares.

Note: Although GENI can be staked during launch day, new GENI stakes will always be applicable to earn rewards starting at the beginning of the upcoming GENI day after the GENI stake is initiated.  In other words, Genius Mining does not begin until the new day.  For example, if a stake’s Genius Mining begins on launch day (Genius Day 1), the protocol will wait until the beginning of the next day (Genius Day 2 at 00:00:00 UTC) before the stake begins mining for Genius.  It will be the following day (Genius Day 3) when the stake is credited with its first mining rewards for Genius Day 2.

Genius Mining Policies

There are 3 types of policies that you can use for Genius Mining:

1. Advanced Mining

2. Basic Mining

3. Collateral Mining

Both policies differ in how they accumulate rewards and incur penalties.  The Basic Mining policy is meant to simulate a “low risk, low reward” scenario, and the Advanced Mining policy aims to simulate a “high risk, high reward” situation.  In both policies, the “risk” is the likelihood that the Genius Miner must prematurely end their mining for matters such as a personal or financial emergency.  Let’s begin with explaining the first policy since that is the most basic ☺

Advanced Mining Stakes:

• Mine the most Genius rewards.

• Mine extra rewards based on the penalties incurred by Basic Genius Miners and Advanced Genius Miners.

• Mine extra rewards from large liquidations.

• Can mine Genius for 90 to 4,444 days.  Although Advanced Mining cannot be created to mine for less than 90 days, they can still be auctioned for ownership transfer from days 1 through 89.  All stakes can always be auctioned off by the account owner.

• The miner cannot end early until they have served at least 180 days or until they have served all of their Promise Days.  This means that the first day that an advanced miner can End Early is on the 181st day.  For all Advanced Genius Mining Stakes, the first 180 days can only be auctioned—they cannot be ended early!

• Have severe penalties when you end your Genius Mining early.  Penalties can eat into your Genius rewards earned as well as your Genius Mining principal.

• The penalties are amplified depending on how many Genius Miners have ended early in a given period.

• Have a larger penalty when you end your Genius Mining late, beyond the 7-day grace period.

Basic Mining Stakes:

• Can mine Genius for 1 to 4,444 days.

• Rewards are only from base inflation.

• Of the ~4.236% total annual inflation, BasicSimple Miners receive at most φ^-3 (~23.6%) of the total inflation.

• Do not earn rewards from Genius Miner penalties.

• Cannot stop mining for the first and last 10% of their mining period by default.  For example, if you create a BasicSimple Mining Stake for 108 days, you cannot end mining on the first 10 days nor on the last 10 days of the period.  This time period will increase to as high as 38.2% (φ^-2) depending on a multiplier based on Genius Miners’ incurred penalties.

• In most situations, only the rewards are penalized.  The principal is only ever penalized when the Genius Miner chooses to auction their miner to be transferred to another end user or if the Genius Miner neglects to end their mining after the 7-day grace period following the end of the Promise Period.

  
  

Collateral Mining Stakes are treated the same as Advanced Miners, except:

• They may not end mining before the Promise Period is over.

• The Principal is used to pay back the debt before the end user receives Genius mining rewards.

• Any remaining, unpaid debt remains in the Stability Pool, thus increasing the price of the Public Settlement Rate.

• When the Release Shares function is called on a Collateral Miner, the LEM Penalty is used to settle debt for that Miner (See: Genius Stability Pool).  Since the LEM Penalty that is calculated by Release Shares is based only on the principal, this debt repayment will release the Collateral value to the account that called the Release Shares function.  Therefore, the function executor will not receive Genius as a reward, but instead they will receive the released collateral.

• The Shutdown Miner function also behaves differently for a Collateral Miner: the caller of the function will receive the incentive reward as a combination of the Miner’s Collateral and any remaining performance rewards earned by the Miner.

By choosing Advanced Mining, you mine extra Genius that cannot be mined by the Basic policy.  Furthermore, Basic Genius Miners and Advanced Genius Miners can elect to “Auction” their Mining Stakes at any time.  The Auction action creates an auction for the mining stake that allows other Genius Miners to bid on the mining stake to take possession of ownership.  Finally, Collateral Miners can only be “minted” from a blockchain asset to be used as collateral.  For example, a Collateral Miner can be minted by the native Ether token–as Wrapped Ether, or WETH–or a stable coin such as USDC.

Penalties and Avoiding Penalties

No one likes penalties, and the GENI contract has flexible means to maximize your rewards, and it all boils down to keeping your original Incentive Promise to the network.  Penalties are only incurred when you do not fulfill your promise. 

There are 4 ways to avoid penalties:

1. Pay attention to your Genius Mining so that you do not end the miner late.

2. When you create a Mining Stake, use the “Basic Mining” policy instead of the “Advanced Mining” policy.  The principal GENI is not penalized when Basic Mining ends before its Promise Date.

3. If you have an Advanced Mining Stake, fulfill your promise, and do not halt mining prematurely or after the ending 7-day grace period.

4. Do not Auction any of your Genius Mining Stakes.  (See: Transfer Auctions.)

Likewise, there are 3 ways that Genius Miners are penalized.  Penalties incur when the miner:

1. Sets a Genius Mining stake to be auctioned.

2. Ends Genius Mining before the Promise Day (prematurely).

3. Allows the Genius Mining to continue after the 7-day grace period beyond the Promise Period.

For Basic Mining, penalties are only applied to the GENI rewards you have accumulated.  Your principal GENI will only be penalized after some time of not claiming your Genius Mining rewards once the mining’s Promise Period has matured (i.e., served its time) or if you choose to auction your Genius Miner.

For Advanced Mining, penalties can eat into your principal GENI.  People select the “Advanced Mining” policy when they are absolutely positive that they will fulfill their promise.

Penalty Mechanics

Penalties are treated differently between Basic and Advanced Genius Mining, and these two will be separated. 

With all mining, the total payout for ending the mining will be calculated by:

PAYOUT = Principal + Rewards - Penalties

Penalties are in place to lessen GENI’s market selling pressure.  This can support more market buying pressure over time.  Although excellent price performance is welcomed by everyone, the more buying pressure means that the mining penalties may no-longer dissuade Genius Miners from terminating their mining early to realize individual profits.  In scenarios like this where GENI’s price performance outpaces the penalty that Genius Miners must pay to end their mining early, GENI’s price and liquidity can experience excessive selling pressure.  The Penalty Multiplier exists to guard against negative market impacts such as described above.

You will notice throughout this document that φ is used in the Penalty calculations.  The purpose of using φ is to mimic nature’s rate of organic growth.  Furthermore, the Genius Miner will initially realize net positive Genius rewards after the mining stake has served ~61.8% (1/φ) of the Promise Days, assuming that no other miners in the ecosystem ended prematurely.

The Genius Calendar

Genius Days move forward at midnight (00:00:00) UTC time.  Day 1 is the day that Genius is launched to the Blockchain’s main production network.  Note: since all numbers start at the value of 0 within Genius’s source code, “Day 1” is actually recorded within the smart contract as day 0.

The earliest that Genius Miners can be created are on Day 1, which means that the earliest Genius Day that miners begin mining is on Day 2.  Once Day 3 comes, it will be the first day that any Genius Miner will be eligible to receive its first rewards from the prior day (Day 2).

Although Genius Days are theoretically aligned with civilization’s normal calendar relative to midnight UTC time, Genius Days do not “move forward” automatically.  In fact, for every Genius Day that moves forward, the smart contract aggregates a summary of what happened during the Genius Day.  Likewise, all Genius Days will also be “summarized” into groups of 10, 100, and 1,000 days.

Since Genius Days do not move forward automatically due to the limitations of transaction-based smart blockchains (such as Ethereum), the Genius Miner or end user to run the smart contract function to summarize the prior Genius Day, or the Genius Miner who is the first to end their miner after a new day, will automatically update the Genius Day and Day Summaries.  Additionally, this functionality can be called by any account on the Blockchain Network.

Genius Day Summary Incentive

There is an incentive for the first account that calls the smart contract’s functionality to summarize the previous Genius Day and the Genius Day Summaries (“Daily Incentives”).  However, if no one executes this functionality, the functionality will be triggered eventually when an end user interacts with the Genius contract.

These incentives are part of the daily inflation plans, and they are each granted individually at the maximum of once per day to the end user that calls the function.  These are all referred to as “Individual Rewards”.  For the individual rewards, 10,000 GENI is given to the account that runs the function to summarize:

• each prior Genius Day.

• each group of 10 Genius Days.

• each group of 100 Genius Days.

• each group of 1,000 Genius Days.

Since no shares will be present on Day 1, and for any theoretical day where there are 0 shares, there will be no Genius inflation rewards paid at the end of Day 1 or any 0-share day.  It is worth noting that on the first day that earns inflation rewards, the daily inflation on a supply of 240 Billion Genius will be ~27,660,276.60.  Therefore, the Daily Incentives will never be 0.15% or greater than the daily reward.

Genius Stability Pool

The tokenomics are created with an important goal: to absorb large liquidations and create continuous buying pressure on the Open-Market.

The Genius Stability Pool is a system where people can deposit blockchain asset collateral, e.g. in the form of DAI, and “borrow” Genius tokens in the form of a Collateral Miner.  Throughout this document, the “Open-Market” refers to centralized and decentralized exchanges.  Both of the goals of the Stability Pool tokenomics are accomplished by incentivizing end-users to deposit collateral and by increasing the contract’s “offer price” of Genius keeping settlement fees in the Stability Pool itself.

A Collateral Miner is an Advanced Miner that was minted via Collateral Deposit.  The “borrowed” Genius becomes a public opportunity for open-market arbitrage and zero-slippage liquidity for miners.  The Stability Pool is a means for Genius end users to acquire and liquidate Genius without the need of a decentralized exchange, which further by-passes the inefficiencies of current decentralized exchanges that are based on Uniswap v2’s algorithms.  The biggest problem addressed is the “Miner Extracted Value” and “slippage”.  This will not be discussed here because it goes beyond the scope of this Whitepaper.

The “Stability Pool” may be referred to as the “Collateral Pool” and vice versa.

Stability Pool Basics

In order for collateral to be accepted by the Stability Pool, the OA Grantor must run a special smart contract function (the function name is “Begin Collateral”).  With this function, the OA Grantor may set an Initial Issue Rate (IIR)–this is the beginning rate that collateral deposits will issue new Genius tokens.  Another way to look at this is a dollar-cost Genius token.  

Ultimately, the Initial Issue Rate does not matter and is immaterial to the contract; however, the OA Grantor does hold the power to stimulate early usage of the Collateral Pool.  The three basic responsibilities of the OA Grantor–whether this be an individual, group of individuals, companies, or a Decentralized Autonomous Organization–are to Begin, End, and Resume Collateral deposits.

Once an OA Grantor Begins the Collateral Pool, new Genius can be issued until the OA Grantor runs a function to “End Collateral”.  The “End Collateral” function will only pause the acceptance of the new collateral, and that collateral can still be settled and will be forced to be settled upon expiration by the Genius Miner.  Keep in mind that even if the collateral fails, such as with LUNA, this failure will be reflected appropriately by the market (and its end users) and the Stability Pool’s arbitrage in relation to the Open-Market.  Furthermore, if the “End Collateral” becomes a mistake of the OA Grantor, the OA Grantor can always “Resume Collateral” so that Collateral deposits can once again be accepted to issue Genius Principal.

Tracking Genius with GENI