Overview of Workchains and ITOs

Workchain is an entirely new concept for crypto, and thus could be a little difficult to grasp. Essentially, it is a platform for producing value rather than just transferring it, as blockchain is known for.

The Infinite Token Offering (ITO) mechanism is the engine that brings a workchain's participants together. No single entity controls an ITO. After the first genesis transaction, the creator has the same ability and authority as everyone else. An entity would only be able to 'control' an ITO by adding value to it, which benefits everyone that participates. It is truly decentralized.

In an ITO on workchain, 100% of token holders are rewarded at the end of each work block. Compare this with Bitcoin on blockchain, where only an extremely small number of participants are rewarded.

Since most of us are already familiar with ICOs, let's use that as a base for comparison with ITOs.

ICOs

ITOs

Send BTC/ETH to get ICO tokens

Stake FTM/ETH to get ITO tokens

Tokens come from a single entity (e.g., company)

Tokens come from anyone that has them

The company benefits

The person that added the tokens, benefits

Centralized power and authority

Decentralized power and authority

A company controls the ICO

No one controls the ITO. Not even the creator

Company gets rewarded first, adds value after (maybe)

Participants add value first, then get rewarded after

A refund is highly unlikely

Submit an autonomous refund request

ICO price can go down

ITO price cannot go down

Attractive to scammers

Nearly immune to scams

Complicated to create

Relatively easy to create

'Inside' information gives some an advantage

'Inside' information offers no real advantage

Has an end date for participation

No end date for participation

Two parties: Investors who buy tokens and the Company that is offering the ICO

Two parties: Agents who buy tokens and the Producers that are offering their tokens

Hold an ICO token, get nothing.

Hold an ITO token and get a variety of other tokens every block, which are yours to keep and do as you want with them.

If you're staking your ETH or FTM into the ITO, you're an 'agent'. If you're offering tokens for distribution to agents, you're a 'producer' (and your batch of tokens is called a 'job').

  • As long as an agent holds the token, they'll get the distributions from the ITO that producers have offered to it. How much they'll get will depend on the percentage of outstanding ITO tokens that they hold.
  • As long as producers get their jobs validated, they'll share the reward pool with other producers. The more their jobs are validated as compared with other producers, the bigger their share of the pool. Any agent can validate any job by sending the ITO's tokens to it, like a vote.
  • Agents can also be producers, and producers can also be agents.

An ITO is, at its heart, a decentralized, two-way incentive mechanism running on smart contracts. Modelling the real economy, it allows buyers ('agents') and sellers ('producers') to reward each other for just about any reason you can imagine. In a real-world retail transaction, for example, buyers reward the sellers that have the most attractive products, while sellers are incentivized to offer their best. In a basic workchain use case  – one of an infinite variety – agents reward the producers that add the most tokens of the best projects, while producers reward agents with their best tokens. Each side has an incentive to add value, growing the size of the workchain's economy.

Bitcoin works because it does incentives very well. However, it only offers incentives for one party (the miners) to do work for the network. The other party (the sender) is not directly incentivized because they are using the network as a service and paying to use it. With smart contracts and two-way incentives we can approach blockchain as a complete economy rather than just a small, financial services sector within it.

Workchains and ITOs can be applied to just about anything you can imagine, from real estate transactions to dating apps to international trade to contests to creating a company from scratch. It turns the world economy into an endless variety of smart contracts that run without any centralized authority and has few bad actors.

If it sounds too good to be true, then we have only to realize that the modern economy would also seem that way to someone that has never witnessed it before. You can order fresh sushi in the middle of the desert, if you wanted. Or one can, for example, stake their funds in a local bank and get rewards every period in the form of interest. You can take your funds out at any time, and choose any bank you wish. Banks can then pool customer funds together and use it as a loan for local businesses to, eventually, offer you other goods and services. But when we put the entire economy on a decentralized platform that anyone can access, something even more amazing can happen.

If the power of blockchain is for anyone to 'be their own bank', then the power of workchain is for anyone to 'be their own economy'.

Check out the Examples and Use Cases section on page 10 of the Workchain whitepaper for a few more examples.

Feature List

Check the Workchain subreddit at r/workchains for new ITOs and other info!

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ITO How-to:
Overview