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What is the endgame?

If we succeed, we will turn ToonCoin into a widely used currency that can compete with fiat on the general market as a means of payment and savings. Something that modern cryptocurrencies are yet to achieve.

If we fail, we raise lots of money for charity and still make the world a better place. We have designed the TOON strategy and smart contract taking into account the flaws of modern fiat and crypto currencies to ensure TOON would have as few of them as possible. Also, using the game theory approach we ensured that if main «players» would be rational, our future would be bright.

TOON contract and ecosystem design are all about effective balance of motivations and powers. And they are developed by a team that knows a thing or two about making viral products.

  • Every TOON holder is obviously motivated to promote TOON further as higher awareness ( which is equal to higher demand in this case) means higher price of their holdings.

    It is true for any other asset of limited supply, including most of cryptocurrencies, but what makes TOON special is the fact that it provides holders with tools that make such promotion way more effective by both increasing the efficiency and decreasing personal costs of being engaged in this promotion.

    We do it by providing users with personalised content which is both entertaining and pleasant-to-share, while simultaneously designed to promote TOON. Something our team members are experts in. To have a general idea - get some TOONs and then visit our Telegram bot.

    And the most beautiful fact is that even an altruistic person who does NOT possess any significant TOON holdings is still motivated to promote the token (unlike any other asset) because due to our contract logic, higher TOON demand and price means more money raised for charity activities by the smart contract.

  • Also, while unlike fiat currencies, TOON is not subject to inflation, unlike conventional cryptos it always has a strong party (The Maintainer) motivated in further adoption and token emission (which, on the other hand, happens only when price goes to a new all-time-highs).

    With every 10 new tokens sold:

    • 100% raised money goes to charity
    • 1 additional token is minted for The Maintainer to fuel the development
    • 1 more token is minted to fuel promotional activities
    • Price of new tokens increases
  • Security-wise TOON is as secure as Ether as its holdings are hosted by the same Ethereum blockchain. At the same time it utilises robust (and a little less secure) L2 solutions for wallets in order to make TOON transactions much faster and over100 times cheaper.

What kind of charities will TOON distribute money to?

All donations will be subject to token holders community negotiations. The Maintainer will give the community several options for an off-chain vote and approval. Certainly, if vote results don’t look right, the community will always be able to block the distribution on-chain.

We are looking to support high-leverage charities, like fundamental research that has a potentially high positive impact on our world but there are no individual beneficiaries that would be interested in financing it thus being underfunded.

Economically speaking, the activities that have non-internalizable highly positive externalities.

All proposed charity fund distributions will be subject to approval of the token holders community.

What entity issues TOON?

TOON Tokens are not issued by any entity. TOON is issued by ownerless smart contract on Ethereum network.

In exchange, the contract gets “donations” in the form of ETH. All donations go to the contract's charity fund and are to be distributed in accordance with the decision of the TOON holders.

Who controls the smart contract?

Smart contract is not controlled by anybody. The smart contract constitutes a TOON DAO - decentralised autonomous organisation, controlled by token holders.

  • The holders elect the «Maintainer», a project leader, by using their balances (1 toon = 1 vote).
  • The Maintainer can submit proposals for smart contract upgrades or distribution of the donations.
  • The Maintainer can be replaced/impeached by token holders at any point of time.

How is the voting process organized?

Unlike other DAOs there is no additional «governance» token on TOON. Neither is there any need to stake tokens in order to vote.

  • Your toon is your governance token.
  • Any TOON holder can simply call a «vote» method of smart contract, providing it with the address of a suggested Maintainer. The vote can be changed at any point.
  • After that the smart contract’s election methods will calculate the votes. Those can be called by anybody to exercise democracy.

What if The Maintainer goes bananas?

Any upgrade/distribution proposal The Maintainer makes is subject to 2-week delay. During this time the community is able to form an opposition (when 10% of the voters vote for an alternative leader). In this case a proposal gets delayed for additional 2 weeks. If over 10% more voters join the opposition during this time, delay goes further and further, up to 180 days.

And if The Maintainer gets impeached, all his proposals get deleted.

How to impeach a Maintainer?

It’s pretty easy. Any token holder has an ability to vote for a maintainer and to change the vote any time they like.

Whenever The Maintainer loses the majority of the votes, anybody can call a special method in smart contract that will "break the consensus".

In this case all Maintainer’s proposals get postponed. Token issuing stops and the community gets the ability to find a new leader. After somebody new gets over 50% votes, the «restore consensus» method of smart contract is called and everything goes back to normal.

During the time when nobody has over 50% of the votes smart contract operates normally, without any problems, as a ERC20 token with limited supply (as new token issuing is paused).

Is this procedure secured against bad behaviour?

Yes, it is. There are some potential cases that concern us and that will be solved during future contract updates, but no threats look viable at the moment.

How scalable is it?

Obviously, due to blockchain limitations only a small number of votes can be calculated by a smart contract.

But the algorithm is written in the way that provides solutions to all potential issues.

What are other duties of The Maintainer?

On-chain The Maintainer only makes proposals and sets The Maintainer/Bounty wallets (see below)

But the most important duties of The Maintainer are off-chain. The Maintainer promotes TOON Token, gets community approval on charity distributions, and develops TOON Ecosystem in general.

How is The Maintainer rewarded?

ToonCoin uses a unique approach to motivate the developers and fund ToonCoin development for the future. When new coins are minted and the price per coin is above $10 USD, additional 10% of new coins are minted to reward a Maintainer.

So the developers are rewarded with ToonCoins only when TOON price rises to a new all time maximums and the reward comes in the form of «Locked TOONs» - ToonCoins that can be transferred/traded only after specified period of time or when the price doubles.

Thus even if token price goes down, developers (The Maintainer) are still motivated for a period of at least one year to drive it up as their holdings are locked.

So is TOON a “centralized DAO”?

Yes, it is. While the community has complete-and-immediate control over strategic decisions and can replace The Maintainer at any point, The Maintainer acts as a centralized actor who is both motivated to do what it takes to increase TOON value and financially capable to do so.

Moreover, since the reward comes as a «locked TOON» even in case The Maintainer gets impeached and replaced with a new one, the ex-Maintainer is still motivated to do good to the community and TOON Token since they cannot sell the tokens they already hove immediately.

Can you explain it altogether?

ToonCoin’s TOON smart contract constitutes a special kind of DAO.

TOON Token is used for governance by itself. Any token holder can designate the ecosystem’s «Maintainer». There can be either one maintainer or no maintainer at all. So maintainer is the only «thing» token holders vote for ON CHAIN.

The Maintainer makes the community (token holders) happy: off-chain it promotes the token and on-chain it upgrades smart contract and makes charitable ETH donations (but not instantly - any proposal to upgrade/distribute takes at least 2 weeks to process even if The Maintainer has all the votes). If the community is unhappy with The Maintainer (e.g. with its current proposal), then they can vote for another maintainer (or for dummy maintainer - just «vote against»). The less votes The Maintainer has (the more votes alternative candidate(s) get) - the longer it takes for a proposal to get accepted. If at any point The Maintainer has less than 50% of the votes, its proposals get rejected.

The Maintainer is also rewarded by the percentage of minted tokens (when token reaches new ATH price) starting with 2,000,000 tokens. With the lock-up period certainly. Also another percentage of minted tokens gets reserved for «bounty». The Maintainer can use them to pay for promo activities.

If there is no maintainer (nobody has over 50% votes) new tokens are not issued and no proposals can be created until the community agrees on a new maintainer.

So The Maintainer has the incentive to make the community happy and increase the demand for tokens, the community has the incentive to keep The Maintainer in charge while it works well and to overthrow it in case it becomes useless or does something wrong.

Also it enables any kind of more sophisticated logic if necessary as the role of maintainer can be given to smart contract with full-featured DAO to which people would stake their tokens.

Why should I help to promote TOON?

There are two ways for people to get TOON tokens:

  • On the primary market. Our smart contract prints new TOON tokens
  • Also we will soon create secondary market by listing the tokens on DEX and potential purchasers will see both «primary» and «secondary» options. So if the market price is below current «primary price» the rational purchaser will be using secondary market. If the price at secondary market increases over «primary price» at any time, new coins are to be purchased from the secondary market by rational purchaser who can then sell them at DEX to make a profit. Thus 99% of the time secondary market price should be lower than primary price.

All the ETH raised by issuing contract on primary market will be distributed to charitable organisations. So by buying tokens on primary market the purchaser will be effectively giving money to charity (exactly 100% of his spendings minus “gas fees”) and will be able to participate in choosing charities to send money to. None of the money raised will be ever spent on business matters/costs/etc.

Thus anybody who will be doing anything to promote the token or actually do anything to increase token price to new heights will be raising money for charity as due to reasoning in "3." getting the price to a new height at the secondary market will automatically create the demand on the primary market.

What about 50% attack?

Say, there are X1 tokens in supply and Y ethers in charity fund. A villain can theoretically buy additional X2 (X2>X1) tokens for Z ethers, gain control over a contract, become a maintainer and distribute the whole Y+Z ethers to himself. Thus effectively stealing Y ethers from us.

That attack is one of the reasons we created a tiered upgrade system. In the best-case scenario for the attacker, it will take him 2 weeks to commit a theft. The attacker doesn’t know whether the community is going to fight back (consolidating around the previous maintainer for example), so to risk such an amount of money the attacker must be sure. In a real-world scenario, Z needs to be over 20 Y in this case . Then if the community actually doesn’t fight back in 2 weeks the attacker will become 5% richer. But if the community does fight back, it will require the attacker to freeze his ethers for as long as 180 days which is not economically viable.

What about flash loans attacks?

Our contract is vulnerable to some flash loans attack. In each possible scenario the community will be able to fight back, but yes, it is an issue that will be addressed in the upcoming contract update.

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