Contest Winner & New Contest!

This week, AlexU has won with an offer of 1,000,000 Lotus and will receive $100 USD. The way the contest works is that the person who offers the most most Lotus wins the contest – but the only need to sacrifice the Lotus equal to the second highest offering. AlexU has sacrificed 500,000 Lotus.

Alex's message to the community:

I'm excited to announce the launch of eCash.Institute.

The Electronic Cash Institute is made up of entrepreneurs, researchers, developers, and enthusiasts interested in educating themselves and the world about the revolutionary technology of peer-to-peer electronic Cash.

We invite you to like, share and subscribe at eCash.institute

https://ecash.institute/announcing-the-electronic-cash-institute/

It may be viewed directly in stamp here. The sacrifice was made across five transactions: 1 2 3 4 5. It is no wonder that Alex wanted to win the competition, this is a very important message.

This week was an economic experiment, and our first contest. To help everyone understand, the rest of the article is an explanation of how the contest works in detail. Otherwise, you can simply enter next week's competition here: https://forms.gle/Uq3Ueq9VL52qQ8qJA

Our contest works similar to a sealed-bid second-price auction (Vickrey Auction). In a normal auction, the person who bids the most wins the auction. The bids are public, and the winner pays what they bid. The incentive for bidders is to bid the lowest price that is a winning bid, so that they don't overpay.

In a Vickrey auction, because the bids are sealed, and you pay an amount equal to the second-highest bid, there is no incentive for bidding wars. Instead, each person has the incentive to offer their true preference. For a fungible asset like Lotus, a Vickrey auction provides useful data to the community about how people value Lotus. The winner of this contest actually values Lotus the least relative to winning the contest.

To help everyone understand, here is the data of all the offers received:

Our contest has a twist, instead of the winner paying Lotus to a seller, the Lotus is sacrificed. This means there is no transaction between a buyer and seller. The Lotus is not being traded for dollars. The destruction of Lotus also serves to remove Lotus from circulation. This keeps inflation down, and the value of lotus Stable. It benefits the whole Lotus community, rather than a single individual.

Unlike other cryptocurrencies, Lotus is inflationary by design – it is not intended to be an investment. Sacrificing Lotus for these contests provides a way to redeem the Lotus. It allows Lotus to be removed from the system and keep the total amount of Lotus in circulation stable. This contest resulted in 500,000 XPI being removed from the Lotus economy.

Lotus is a currency – it flows from one person to another. The word currency comes from current because currency in any economy operates similarly to water in the normal water cycle.

The governments and central banks are responsible for taxes and issuance of currency. These are analogous to rain, and evaporation. The broader economy would be analogous to all the various streams flowing from the mountain of government into the ocean. The ocean represents savings.

Ever heard of modern monetary theory?

To explain, let’s start with a bathroom sink ...

MarketplaceKai Ryssdal

Within the Lotus economy, miners play the role of currency issuers. The block rewardees and miners together act similarly to a government.  The various applications which require Lotus to be sacrificed act to redeem the Lotus and are playing the role of taxes – but are voluntary.

Lotus is designed not to need contests like this, but for the time being we will be running them routinely to teach the community about economics and monetary systems.

You may participate in the next contest by entering your offer into this form: https://forms.gle/Uq3Ueq9VL52qQ8qJA

The next contest will be ending on the 28th of November, 2022. You can collect more Lotus by signing up for this blog, or by helping other members of the Lotus community, and by giving to those who help you.