This week we had a question posed by a community member asking what would happen if lambirgini official team came and sold lambo twice cheaper on Chille and everybody used their Chilli coins on them. In other words, the question can be understood like this – what would happen if one person sells something valuable with a huge discount on our marketplace and gets all the coins.
So, we can decompose problem. There are three pillars – marketplace, exchange and mining. If a person wants all of the coins in one moment in time (t = 0) he/she has to be a monopolist in all spheres where coins are located. But, our economic model contains an internal mechanism that will not allow forming a monopoly position.
First mechanism we implemented is the marketplace fee. Whenever you sell something (and get Chille coins) you will be charged the marketplace fee in Chille and those coins will be distributed to all Safex holders. This leads to decentralization of Chille. A second mechanism is linked to the emission curve. In every additional period, new coins will be mined, that means in t+1 there will be produced new coins as an award to miners. At the end, there is also market mechanisms. There is an extremely low probability (tends to zero) that all coins are on the exchange market in one moment in time. Also, even if somebody starts buying all coins, demand will increase, supply decrease and price will have an upward trend all the time. Some of Chille owners will bet on the higher price and wait until it reaches an extremely huge value.
So, we use logic of absurdity (lat. Reductio ad absurdum) to explain why this won’t happen. We started from the end (one person gets all the coins) and proved backwards that it is not possible in practice.