Information sourced from official documentation: https://docs.ierc20.com/new-features/pow-and-dpos

Economic Model

This tutorial will introduce a unique economic model for the IERC Protocol, jointly developed by the IERC team and third-party contributors.

Key Features: Large total supply, long production cycle, linear and halving of output combined, deflationary mechanism, 100% mining output through DPoS & PoW, and empowerment of ecosystem applications.

IERC combines elements of PoW and DPoS in its protocol. The total supply of inscriptions is set at 21 billion, with PoW and DPoS each accounting for half of the supply. Both PoW and DPoS gradually release inscriptions in sync with the Ethereum mainnet blocks, and the inscriptions produced by both threads are the same, without interfering with each other.

In the IERC protocol, mining rewards follow a clear halving cycle. Initially, each block rewards 500 inscriptions, and then the rewards halve every two years. After the fifth year, the production rate stabilizes, releasing approximately 3.125% annually, allowing mining for approximately 24 years in total. This mechanism aims to maintain the inscription's value in the long term and incentivize miners and users to participate in the ecosystem for an extended period. Additionally, the protocol introduces a difficulty weighting method to ensure fairness in PoW output. Furthermore, the total production of inscriptions is not fixed, as the inscription also has mechanisms for burning and deflation.

Understanding and utilizing this economic model is crucial for strategic miners.

In the early stages of mining, the focus should be on PoW, as the rewards are higher and competition is relatively low. Over time, miners should gradually transition to DPoS, as it provides a more stable and predictable return. By employing this strategy, miners can maximize their earnings. The following sections will analyze PoW and DPoS, both of which involve various game theory strategies.

PoW Section

Basic Concepts

IERC PoW is the first and only implementation of PoW output in the Ethereum Inscriptions protocol. This protocol has a well-established trading market and a large user base. In the current market conditions, unrestricted inscription acquisition has discouraged potential users, leading to initial concentration of distribution, which is detrimental to the project's long-term development. Currently, IERC PoW output assets are fully compatible with the trading mechanisms of the IERC20 market and can be freely traded.

How to Mine

In the first stage of Base PoW, IERC introduced a basic version based on computing mintHash to determine success. It has been online for several months, and many users should have a good understanding of the game-play. If you want a quick review, please refer to the official documentation:

http://docs.ierc20.com/users-guide/how-to-mint

Regarding the second stage CLI, the IERC official has also released a new program: https://github.com/IErcOrg/ierc-miner-js

Note: To ensure the security of user private keys, the official recommendation for the second stage is to use the CLI for participation. Therefore, the web version is not available. If you use a third-party CLI, please be cautious and avoid using potentially problematic mining programs. Additionally, when participating in mining, use an account with a small amount of funds and avoid using an account with significant assets.

Game Theory Strategy

In the second stage of Advanced PoW, which is an advancement of the first stage, to be precise, it is a game-play based on difficulty weight competition. First, let's introduce the difficulty and its corresponding weight, as well as the allocation of rewards. The difficulty levels are defined by the officials as m4 to m64. For instance, m4 represents a mintHash starting with "0x0000," while m6 represents a mintHash starting with "0x000000," and so on. Each difficulty level corresponds to a different weight, with m4 difficulty being assigned a weight of 1. The weight for m5 difficulty is 10, m6 is 100, and the weight for mx difficulty is calculated as = m^x=4 and so forth. You need to compete with other miners who are participating in mining in the same block.

If there is only one miner in a block, as long as your difficulty is greater than m4, you can receive all the rewards for that block, which amounts to 500 inscriptions. If there are multiple competitors in a block, the block rewards are shared based on the difficulty weight formula: Your weight divided by the total weight of the current block, multiplied by 500. If no one mines a block, the block reward accumulates until the next block. If you are fortunate enough to encounter this situation, you may be able to mine several blocks' worth of rewards all at once or share them with others. However, these rewards do not accumulate indefinitely. There is a maximum reward limit of 5 blocks, which means that even if there is a gap in mining for a while, the maximum reward that can be obtained at once is for 5 blocks. Any excess block rewards are burnt.

After understanding these basic concepts, we can now formulate our own strategies to maximize profits in this game:

1. Try to mine when there are fewer participants, as in blocks with fewer people. In such blocks, there is a high possibility of being able to exclusively enjoy the block rewards.

2. You can mine every few blocks, which increases the chance of obtaining the maximum block reward all at once and also helps save on gas fees. Select an appropriate difficulty level based on your device capabilities.

3. When the overall computing power is low, you can choose a higher difficulty challenge, which may result in significant rewards.

4. Attempt mining during extreme gas conditions, either when gas prices are extremely high or extremely low. In the case of high gas prices, there will likely be fewer competitors. In the case of extremely low gas prices, it may not be possible to exclusively claim the block rewards, but the gas consumption will be minimal.

These are some game strategies. However, it's important to note that the effectiveness of these strategies may vary when multiple participants adopt them, which adds to the excitement of the game.

DPoS Section

Basic Concept: In the DPoS system, mining rewards are determined solely by the user's DPoS point. When executing the Mine operation, users need to select the amount of point to be consumed and pay the gas fee to add the transaction to the blockchain.

To participate in the production of new DPoS inscriptions, it is necessary to accumulate DPoS points first. Currently, this can be gained by staking $ethi. In the future, there will be more inscriptions and staking periods to choose from, each with different production speeds. For specific information, please refer to the official announcement.

Experience DPoS through IERC Staking: https://www.ierc20.com/stake and learn more details from the official guide.

Mining Rules: The game theory strategy of DPoS mining is no less intense than the PoW. It is a weight-based game based on the consumption of points.

DPoS points represent the computational power available for mining by DPoS users. This computational power is replenished through staking and is consumed with each mining operation. According to official regulations, the amount of points used in a single Mine determines the mining weight: 1 point is equivalent to 1 weight, and so on.

Common Misconceptions:

1. Accumulating more DPoS points does not guarantee more rewards, and having fewer DPoS points does not necessarily mean fewer inscription rewards.

2. Using a large volume of DPoS points in a single mining operation increases the block weight, but excessive consumption is not beneficial since the maximum reward per block is 500 inscriptions. In each block, there is competition among miners for rewards. If multiple miners participate, the rewards are distributed based on the DPoS points weight. If no miner mines a block, the reward accumulates to the next block, but there is a limit to the reward accumulation, with a maximum of five blocks' worth of rewards. Any excess will be burnt.

Game Theory Strategy: After understanding the basic concepts, it's time to devise strategies to maximize profits. This requires patience and wisdom.

1. Off-peak Mining: Mine during low competition periods to have a higher chance of exclusive rewards.

2. Spaced Mining: Don't chase every block; instead, mine every few blocks to take on high-weight challenges. This allows for larger rewards while saving on gas fees.

3. Difficulty Adjustment Based on Computational Power: When most miners choose low difficulty, opt for high difficulty to aim for infrequent but substantial rewards.

4. Gas Fee Strategy: Mine during periods of high gas fees to reduce competition. Mine during periods of low gas fees to save costs. Balancing potential rewards and expenses is crucial.

5. Risk Diversification: Spread mining activities across multiple small accounts to minimize the impact of security incidents on the overall operation.

6. Trend Observation: Stay vigilant about community trends and adjust strategies in a timely manner to avoid operating in crowded mining scenarios.

7. Technological Advantage: Continuously update mining software and hardware to maintain a competitive edge.

Bear in mind that the effectiveness of these strategies may vary widely when widely adopted. Adaptability is an exciting part of the game. By implementing these strategies, miners can not only achieve higher short-term returns but also sustain long-term profit growth while mitigating potential risks.

For more about IERC20 at:

Official website: www.ierc20.com

Twitter: @EthinscXYZ

Official Telegram: t.me/IERC20OFFICIAL

Whitepaper:

https://docs.ierc20.com/ierc-protocol/overview

Information sourced from official documentation: https://docs.ierc20.com/new-features/pow-and-dpos

Economic Model

This tutorial will introduce a unique economic model for the IERC Protocol, jointly developed by the IERC team and third-party contributors.

Key Features: Large total supply, long production cycle, linear and halving of output combined, deflationary mechanism, 100% mining output through DPoS & PoW, and empowerment of ecosystem applications.

IERC combines elements of PoW and DPoS in its protocol. The total supply of inscriptions is set at 21 billion, with PoW and DPoS each accounting for half of the supply. Both PoW and DPoS gradually release inscriptions in sync with the Ethereum mainnet blocks, and the inscriptions produced by both threads are the same, without interfering with each other.

In the IERC protocol, mining rewards follow a clear halving cycle. Initially, each block rewards 500 inscriptions, and then the rewards halve every two years. After the fifth year, the production rate stabilizes, releasing approximately 3.125% annually, allowing mining for approximately 24 years in total. This mechanism aims to maintain the inscription's value in the long term and incentivize miners and users to participate in the ecosystem for an extended period. Additionally, the protocol introduces a difficulty weighting method to ensure fairness in PoW output. Furthermore, the total production of inscriptions is not fixed, as the inscription also has mechanisms for burning and deflation.

Understanding and utilizing this economic model is crucial for strategic miners.

In the early stages of mining, the focus should be on PoW, as the rewards are higher and competition is relatively low. Over time, miners should gradually transition to DPoS, as it provides a more stable and predictable return. By employing this strategy, miners can maximize their earnings. The following sections will analyze PoW and DPoS, both of which involve various game theory strategies.

PoW Section

Basic Concepts

IERC PoW is the first and only implementation of PoW output in the Ethereum Inscriptions protocol. This protocol has a well-established trading market and a large user base. In the current market conditions, unrestricted inscription acquisition has discouraged potential users, leading to initial concentration of distribution, which is detrimental to the project's long-term development. Currently, IERC PoW output assets are fully compatible with the trading mechanisms of the IERC20 market and can be freely traded.

How to Mine

In the first stage of Base PoW, IERC introduced a basic version based on computing mintHash to determine success. It has been online for several months, and many users should have a good understanding of the game-play. If you want a quick review, please refer to the official documentation:

http://docs.ierc20.com/users-guide/how-to-mint

Regarding the second stage CLI, the IERC official has also released a new program: https://github.com/IErcOrg/ierc-miner-js

Note: To ensure the security of user private keys, the official recommendation for the second stage is to use the CLI for participation. Therefore, the web version is not available. If you use a third-party CLI, please be cautious and avoid using potentially problematic mining programs. Additionally, when participating in mining, use an account with a small amount of funds and avoid using an account with significant assets.

Game Theory Strategy

In the second stage of Advanced PoW, which is an advancement of the first stage, to be precise, it is a game-play based on difficulty weight competition. First, let's introduce the difficulty and its corresponding weight, as well as the allocation of rewards. The difficulty levels are defined by the officials as m4 to m64. For instance, m4 represents a mintHash starting with "0x0000," while m6 represents a mintHash starting with "0x000000," and so on. Each difficulty level corresponds to a different weight, with m4 difficulty being assigned a weight of 1. The weight for m5 difficulty is 10, m6 is 100, and the weight for mx difficulty is calculated as = m^x=4 and so forth. You need to compete with other miners who are participating in mining in the same block.

If there is only one miner in a block, as long as your difficulty is greater than m4, you can receive all the rewards for that block, which amounts to 500 inscriptions. If there are multiple competitors in a block, the block rewards are shared based on the difficulty weight formula: Your weight divided by the total weight of the current block, multiplied by 500. If no one mines a block, the block reward accumulates until the next block. If you are fortunate enough to encounter this situation, you may be able to mine several blocks' worth of rewards all at once or share them with others. However, these rewards do not accumulate indefinitely. There is a maximum reward limit of 5 blocks, which means that even if there is a gap in mining for a while, the maximum reward that can be obtained at once is for 5 blocks. Any excess block rewards are burnt.

After understanding these basic concepts, we can now formulate our own strategies to maximize profits in this game:

1. Try to mine when there are fewer participants, as in blocks with fewer people. In such blocks, there is a high possibility of being able to exclusively enjoy the block rewards.

2. You can mine every few blocks, which increases the chance of obtaining the maximum block reward all at once and also helps save on gas fees. Select an appropriate difficulty level based on your device capabilities.

3. When the overall computing power is low, you can choose a higher difficulty challenge, which may result in significant rewards.

4. Attempt mining during extreme gas conditions, either when gas prices are extremely high or extremely low. In the case of high gas prices, there will likely be fewer competitors. In the case of extremely low gas prices, it may not be possible to exclusively claim the block rewards, but the gas consumption will be minimal.

These are some game strategies. However, it's important to note that the effectiveness of these strategies may vary when multiple participants adopt them, which adds to the excitement of the game.

DPoS Section

Basic Concept: In the DPoS system, mining rewards are determined solely by the user's DPoS point. When executing the Mine operation, users need to select the amount of point to be consumed and pay the gas fee to add the transaction to the blockchain.

To participate in the production of new DPoS inscriptions, it is necessary to accumulate DPoS points first. Currently, this can be gained by staking $ethi. In the future, there will be more inscriptions and staking periods to choose from, each with different production speeds. For specific information, please refer to the official announcement.

Experience DPoS through IERC Staking: https://www.ierc20.com/stake and learn more details from the official guide.

Mining Rules: The game theory strategy of DPoS mining is no less intense than the PoW. It is a weight-based game based on the consumption of points.

DPoS points represent the computational power available for mining by DPoS users. This computational power is replenished through staking and is consumed with each mining operation. According to official regulations, the amount of points used in a single Mine determines the mining weight: 1 point is equivalent to 1 weight, and so on.

Common Misconceptions:

1. Accumulating more DPoS points does not guarantee more rewards, and having fewer DPoS points does not necessarily mean fewer inscription rewards.

2. Using a large volume of DPoS points in a single mining operation increases the block weight, but excessive consumption is not beneficial since the maximum reward per block is 500 inscriptions. In each block, there is competition among miners for rewards. If multiple miners participate, the rewards are distributed based on the DPoS points weight. If no miner mines a block, the reward accumulates to the next block, but there is a limit to the reward accumulation, with a maximum of five blocks' worth of rewards. Any excess will be burnt.

Game Theory Strategy: After understanding the basic concepts, it's time to devise strategies to maximize profits. This requires patience and wisdom.

1. Off-peak Mining: Mine during low competition periods to have a higher chance of exclusive rewards.

2. Spaced Mining: Don't chase every block; instead, mine every few blocks to take on high-weight challenges. This allows for larger rewards while saving on gas fees.

3. Difficulty Adjustment Based on Computational Power: When most miners choose low difficulty, opt for high difficulty to aim for infrequent but substantial rewards.

4. Gas Fee Strategy: Mine during periods of high gas fees to reduce competition. Mine during periods of low gas fees to save costs. Balancing potential rewards and expenses is crucial.

5. Risk Diversification: Spread mining activities across multiple small accounts to minimize the impact of security incidents on the overall operation.

6. Trend Observation: Stay vigilant about community trends and adjust strategies in a timely manner to avoid operating in crowded mining scenarios.

7. Technological Advantage: Continuously update mining software and hardware to maintain a competitive edge.

Bear in mind that the effectiveness of these strategies may vary widely when widely adopted. Adaptability is an exciting part of the game. By implementing these strategies, miners can not only achieve higher short-term returns but also sustain long-term profit growth while mitigating potential risks.

For more about IERC20 at:

Official website: www.ierc20.com

Twitter: @EthinscXYZ

Official Telegram: t.me/IERC20OFFICIAL

Whitepaper:

https://docs.ierc20.com/ierc-protocol/overview