Cap Protocol

Prepared by: [Your Name]

Project Overview:

GreenToken is a decentralized finance (DeFi) project aimed at incentivizing green energy projects and sustainable practices. The token is used to reward participants for contributing to environmental sustainability, such as solar energy production, tree planting, and recycling initiatives.

Description:

1. Total Supply Cap:

   • Cap Limit: 20 million GreenTokens (GRN).

   • Description: The total supply of GreenTokens is permanently capped at 20 million tokens. No additional tokens can be minted once this cap is reached.

2. Annual Minting Cap:

   • Cap Limit: 2 million GreenTokens per year.

   • Description: The protocol allows the minting of up to 2 million new GreenTokens annually. These tokens are distributed as rewards to users who contribute to green energy projects. The minting process is automatically governed by the smart contract, and any attempt to exceed this annual limit is blocked by the protocol.

3. Wallet Holding Cap:

   • Cap Limit: 500,000 GreenTokens per wallet.

   • Description: To promote decentralization and prevent whales (large holders) from dominating the market, the protocol caps the maximum number of tokens that any single wallet can hold at 500,000 GreenTokens. Any attempt to transfer additional tokens into a wallet that exceeds this limit is rejected.

4. Transaction Cap:

   • Cap Limit: 50,000 GreenTokens per transaction.

   • Description: Each transaction involving GreenTokens is limited to a maximum of 50,000 tokens. This helps to prevent market manipulation and large price fluctuations caused by the sudden movement of large amounts of tokens.

5. Reward Distribution Cap:

   • Cap Limit: 100,000 GreenTokens per project.

   • Description: Each green energy project participating in the GreenToken rewards program can receive a maximum of 100,000 tokens per year. This ensures that rewards are distributed fairly across multiple projects rather than concentrated in a few.

6. Burn Mechanism:

   • Cap Limit: 10% of the annual minted tokens.

   • Description: To counteract inflation, the Cap Protocol includes a burn mechanism where 10% of the newly minted tokens each year are automatically burned. This reduces the circulating supply and helps maintain the token's value over time.

Cap Protocol Smart Contract Logic:

The Cap Protocol is implemented through a smart contract on the Ethereum blockchain. The contract includes the following functions:

Mint Tokens:

• Automatically mints new tokens up to the annual cap limit of 2 million tokens. Attempts to exceed this cap result in a transaction failure.

Transfer Tokens:

• Transfers tokens between wallets, enforcing both the transaction cap of 50,000 GreenTokens and the wallet holding cap of 500,000 GreenTokens. Transactions that violate these caps are rejected.

Distribute Rewards:

• Distributes GreenTokens to green energy projects, ensuring no project receives more than 100,000 tokens per year.

Burn Tokens:

• Automatically burns 10% of the tokens minted each year to control inflation.

Audit and Compliance:

• Includes functions for regular audits to ensure the protocol is followed. Any detected violations trigger an alert, and corrective actions are taken.

---

Example Scenario:

1. Minting New Tokens: At the start of 2051, the GreenToken protocol mints 2 million tokens, adding them to the rewards pool for that year. This is the maximum amount that can be minted for 2051.

2. Project Rewards: A solar farm project contributes to the grid and receives 100,000 GreenTokens as a reward. The protocol checks that the project has not exceeded its annual cap before completing the transaction.

3. User Transactions: Alice wants to transfer 60,000 GreenTokens to Bob. The protocol blocks the transaction because it exceeds the 50,000-token transaction cap. Alice splits the transfer into two transactions of 30,000 tokens each, which the protocol allows.

4. Burn Mechanism: At the end of the year, 200,000 tokens (10% of the minted tokens) are automatically burned, reducing the total circulating supply and helping to maintain the token's value.

Conclusion:

The GreenToken Cap Protocol ensures a fair and controlled distribution of tokens, promoting decentralization, preventing market manipulation, and aligning the token's use with the project's environmental goals. By implementing strict caps on supply, minting, holding, and transactions, the protocol maintains a stable and sustainable ecosystem for GreenToken holders and contributors.

Protocol Templates @ Template.net