How does the Prom (PROM) coin redistribution system work?

Through its innovative coin redistribution system, PROM Coin ensures fair and sustainable reward distribution, generating passive income for holders based on their contributions to the ecosystem's liquidity and stability.

Dec 20, 2024 at 12:18 pm

Key Points:

• Concept of PROM Coin Redistribution
• Automated Market Making (AMM) through Liquidity Vault and Swap Pond
• Coin Redistribution Mechanism: Equal, Fair, and Sustainable
• Passive Income Generation for PROM Holders
• Calculation of PROM Rewards

Detailed Explanation:

Concept of PROM Coin Redistribution

The Prom (PROM) coin redistribution system is an innovative mechanism designed to ensure the fair and sustainable distribution of PROM coins among its holders. It aims to reward loyal community members and incentivize participation in the PROM ecosystem.

Automated Market Making (AMM)

The redistribution system utilizes an Automated Market Making (AMM) model, consisting of two main components:

• Liquidity Vault: A pool of PROM coins and stablecoins that facilitates liquidity for PROM trading.
• Swap Pond: A platform for exchanging PROM coins with other cryptocurrencies or fiat currencies.

Coin Redistribution Mechanism: Equal, Fair, and Sustainable:

The redistribution mechanism operates on the principles of equality, fairness, and sustainability. It aims to distribute a certain percentage of transaction fees generated within the AMM among PROM holders proportionally to their holdings. This ensures that all holders, regardless of their investment size, are rewarded for their contributions to the ecosystem.

Passive Income Generation for PROM Holders

By simply holding PROM coins in their wallets, holders are eligible to receive a portion of the transaction fees generated on the AMM. This provides a passive income stream for PROM holders and further incentivizes them to maintain their holdings.

Calculation of PROM Rewards

The amount of PROM rewards distributed to each holder is calculated based on the following formula:

• Rewards = (Transaction Fees * Redistribution Rate) / Total PROM Holdings

The redistribution rate is a predetermined percentage set by the PROM protocol, ensuring transparency and consistency in reward distribution.

FAQs:

• Q: What is the purpose of the coin redistribution system?
  A: To reward PROM holders for their participation, incentivize holding, and ensure a fair and sustainable distribution of coins.
• Q: How often are rewards distributed?
  A: PROM rewards are distributed in real-time, allowing holders to receive rewards immediately upon transaction fee generation.
• Q: Is there a minimum holding requirement to receive rewards?
  A: No, any PROM holder, regardless of their holding size, is eligible to receive rewards.
• Q: Where are rewards deposited?
  A: Rewards are automatically deposited into the wallet where the PROM coins are held.
• Q: Can I sell my PROM coins and still receive rewards?
  A: As long as you hold PROM coins in your wallet, you are eligible to receive rewards, regardless of whether you trade them or not.