Conceal Deposits 3.0
New Blockchain Deposits Compound Interest Rates Model
Why saving money is important?
Saving money is incredibly important. It gives you peace of mind, expands your options for decisions that have a major effect on your quality of life, and eventually gives you the option to retire. Most people who are wealthy got there through a combination of their own hard work and smart savings and investment decisions. You can become one of those people, too. [1]
How can the blockchain technology help me to get interest on my savings?
With the Conceal Desktop Wallet, and very soon with the Cloud and Mobile wallets too, you can choose to lock any amount of your $CCX holdings as a deposit in the blockchain and earn interest on it. The annual interest rates vary from 2.9% to 6% depending on how long you choose to lock your deposit and the amount locked. The bigger the amount and longer your deposit is locked, the higher the annual effective interest rate you will receive. Once you have made a deposit on the blockchain for a certain amount of time, it is locked in until that time and you can’t access your savings. It is a time-locked contract. Totally private, encrypted and secured by the blockchain. No third parties are involved in this process.
Is it complicated? How does this work?
Complicated? Not at all. In fact, our blockchain deposits are even simpler than making a deposit in the traditional banking. Conceal Deposits are based in Cold Staking and privacy-protected Hashed-Timelock-Contracts (HTLC) [2] technologies. In practical terms, this means that you can begin staking $CCX from a wallet that can be offline. [3] No need to keep a computer, mobile phone, or Virtual Private Server running for 24/7 wasting energy and money. [6] You set up your own terms for the contract privately and anonymously, in a trustless environment and without any third party involved. Yes, that’s it. Nothing else is required.
If this technology is so perfect, why is Conceal launching a third generation of it?
We aim for perfection but, in real life, nothing is perfect. Initially, with the 1st generation of blockchain deposits, we have implemented a normal interest rate model (without compounding). People ended up depositing low amounts of funds for the minimum period of time allowed. There was no incentive in keeping the coins locked for longer, nor bigger amounts. This model hasn’t brought any overall benefit to our economic ecosystem. On version 2.0 we have tried to fix it introducing a standard compound interest model like in traditional banking. This measure was to incentive bigger amounts of deposits being made. This second model proved to work better than the previous one and we ended up having people locking bigger amounts than with the 1st model. Although, even with people depositing bigger amounts per deposit, the duration of the contracts haven’t improved much. The majority of the deposits kept being locked for lower periods of time favouring essentially big bag holders. The difference in the effective annual interest rates between short and long term deposits was minimal.
In Conceal Deposits v3.0, we have redesigned the deposits model from scratch. After several months of research, we have realised that we needed something more than a standard compound model. We have tried all the possible Compound Interest options (Standard, Monthly, Continuous)[4] but every one of these traditional models has been projected for longer periods of time. 10, 20, 30 years and more. They work great in the conventional financial system but in the cryptocurrency markets, these models are a total failure and can’t be applied. The pace of the cryptocurrency markets is another league. 10 years? Even just one single year is too long in the cryptospace. So, we needed to think out the box and create our own model.
There were two primary considerations. The first was simplicity. We wanted to reduce complexity and that meant that the proposal involved merging the existing weekly Deposits and quarterly Investments. Second, as the value of Conceal has increased since the launch of Investments, we also wanted it to be socially inclusive, more accessible to everyone, so we were determined to reduce the requirements for better rates.
And therein lies the challenge, to create a system with equitable rewards, where you earn more when you lock more and for longer. After a lot of back and forth, based in our block data and own market analysis, we arrived at three tiers:
Now that we identified the tiers, next step was to lock down the Annual Percentage Rates (APR) for each of the three tiers based in our initial banking model and without affecting the emission curve:
Having determined those figures, taking our compounding into account, being careful with any potential derivation from low inflation and trying to have an egalitarian reward system for everyone we have reached the following rates for the Effective Annual Rate (EAR):
Our compound interest model developed completely in-house, takes cryptocurrencies’ data analytics, markets, volatility, and shorter time-frames into account.
This simple model translates itself in the following compound interest rates table:
In practical terms, if you deposit the amounts on these examples you will get the following earnings:
Conceal Deposits 3.0 is currently being tested in our testnet and holds all the know-how we have learned in the last year and a half. We believe that all our effort will bring hope and positive change to the ecosystem.
Thank you for being part of this fantastic community. This month we welcomed hundreds of new users already and greatly improved the network. All this would have been impossible without users like you who have supported our mission to build a more secure and private cryptocurrency. Thank you all!
Sources:
[1] Investopedia, Why saving money is important
[2] Investopedia, Hashed Timelock Contract
[3] Conceal-Wiki, Blockchain Banking
[4] Investopedia, Compound Interest
[5] Conceal.Network, What is Conceal?
[6] Conceal.Network, Conceal Cold Staking vs. ‘Masternodes & PoS’Disclaimer: Our posts do not offer investment advice and nothing in them should be construed as investment advice. You must be satisfied that this crypto offering is suitable for you in light of your financial circumstances and attitude towards risk before starting. The price or value of cryptocurrencies can rapidly increase or decrease at any time (and may even fall to zero).
Learn More: https://conceal.network/
