Updated: July 20, 2022

Genius Smart Contract & Token Whitepaper

With Genius, the founder & crypto-luminary, Robert Genito set out to solve one big problem in the area of computing and digital currencies–can a store of value be programmed?  The answer was yes, and took roughly 5 years of research and development (R&D).  This new cryptocurrency solution has far-reaching implications in the worlds of money, transactions, and computing.  Now there is an asset designed from the ground up – that is virtually impervious to day-trading and market-sell offs.


To be financially successful in the crypto market, one must intimately understand the blockchain assets they are dealing with, and this requires an unusual amount of financial and technological knowledge.  Furthermore, understanding how to use multiple DeFi apps is mandatory.  Not everyone has this knowledge, but everyone is seeking a better way to store their value, protect it from inequitable inflation, and amplify their value.  The Genius Smart Financial Contract was designed to solve this need securely and with simplicity for the end user.

For centuries, Governments and Financial Corporations have sought to create financial products like this.  The new internet created by blockchain technology makes this asset possible, and many blockchain assets have attempted to create such an asset.  This Genius Smart Financial Contract (“GENI”) has built upon the successes of its predecessors and has learned from, and corrected upon, their mistakes.  Imagine that you are holding an asset that pays you passive income and only increases in value over time.  This is the intent of Genius.

Genius is similar to many existing assets and tools available in conventional finance & investing:

  • Banking Certificate of Deposit.  Genius is like a “Certificate of Deposit” except it is on the blockchain, in the full control of the end user, and algorithms on chain (a basic Artificial Intelligence, i.e. A.I.) influence its reward structure.
  • Stock & Dividend Model.  Genius can also be thought of as similar in nature to a stock with a dividend payout.  However, unlike a stock that generally pays out dividends in a nations’ currency, Genius disperses its “dividends” in Genius.
  • Central Banking.  One of the closest models Genius mimics is that of central banking.  However, instead of issuing inflation via complex and hidden tools like quantitative easing, Genius issues its inflation consistently and only to miners/stakers instead of flowing to the people at the top of the financial system as is done in Central Banking.  Genius is Decentralized Banking that is truly designed for the people.

Genius has been designed to mitigate human corruption and biased bureaucracy.  Genius is the first hyper-yield A.I. blockchain Certificate of Deposit that intends to appreciate.  Genius will be used by end users to generate passive income.

Functionally, and “under the hood” of the software engine, Genius is an Ethereum-, PulseChain-, and Binance Smart Chain-based smart contract that is immutable, which means that the code cannot be changed.  Genius has no admin key, meaning that it cannot be exploited by any human or privileged access.  Furthermore, it has no “developer coins” and the users cannot be “rug pulled”.  These are marketing-specific industry terms that mean value cannot be stolen from end users of the Genius Smart Financial Contract.

Genius is designed to enforce a positive, healthy, and democratic financial market by defending its value from typical negative market activities.  This is done by incentivizing users to “lock away” their value for a length of time promised by the end user.  For users who change their mind about their promises, their wealth is redistributed to the smart contract’s good actors over time until they re-engage their commitment.  An A.I. layer continuously monitors the end users’ actions and reevaluates incentives for the benefit of end users who keep their promises.  With Genius, your time (attention) and your intentions (promises) are reflected as value.  In other words, Genius’s internal artificial intelligence constantly considers the end users’ actions, evaluates the likeliness that a user will break their promise(s), and adjusts the reward incentives to entice users to stick to their original promises.  In layman's terms: Genius is also designed to protect its users from the effects of market manipulation, negative market conditions, and human greed and impatience.

The Basics

The basics of Genius are ULTRA SIMPLE. It is simply a staking or mining token (common crypto nomenclature), with many things going on behind the scenes to preserve and grow value over time.

These items include:

  1. Unique Math - Detailed below, to control penalties for end stakes.
  2. Dual Staking Policies -  Detailed below.
  3. Endstake AI Monitoring - An algorithm (AI) built into the contract constantly monitoring the state of end user commitments to adjust mining rewards in the case of a wave of commitment changes (e.g. such as stakers ending their stakes early during times of market dips).
  4. Built-in Auction Functionality - Ability to fulfill others’ promises (stakes/mines) and receive a reduced entry point, higher effective ROI, while also providing liquidity to those that would have to otherwise break their commitment.
  5. In Contract Treasury - More to be revealed after launch.

All of the above functionality will be available on the first Decentralized Application (DAPP) to be launched at https://geni.app.

The Genius token can be used to store value (save) and generate passive income over a period of time.  This is done by “Genius Mining”.  Similar to Bitcoin Mining, the new Genius tokens are only paid out to those who are mining for (or staking) Genius tokens.  With Bitcoin Mining, you need to purchase expensive mining equipment, use lots of electricity, and trust a mining pool.  All that disappears with Genius, as it’s built on multiple layer 1 blockchains, providing an environment that has much lower barriers to entry and better security.

With Genius Mining, all you need is the Genius token and to create a commitment (promise) to generate passive income for a number of days that you choose. We call these commitments “miners”.

Unlike Bitcoin Mining, Genius Mining does not need expensive equipment and useless computations that ultimately burn through electricity. It is being built on the most environmentally friendly crypto platforms, and can–in the future–be deployed to other such layer 1 solutions.

Behind the scenes, the contract’s math and programming logic ensures that the commitments made by the end users are fulfilled.  This is done by dynamically lowering the Mining rewards via penalties for advanced miners and implementing strategic, and well-known to the end user, blackout periods where simple miner commitments cannot be ended early.  Genius is effectively monetizing time, attention, and one’s dedication to their commitment over time.

In order to encourage a healthy economy and allow users access to liquidity, there are a number of tools being deployed to allow users to offload their mining commitments to others in the cryptosphere.  Although we can’t say for certain what the result of these tools and rules will be, we believe, based on extreme testing using live trading data for many other tokens through our models, that our auction system (as one example) will prove to be useful for preserving end user commitments provide necessary liquidity to users who would otherwise end their commitments early and introduce selling pressure to the open market, and remove the incentive for larger market forces to negatively manipulate the Genius token asset.

Where does Genius’ value come from?

This is a very difficult question to answer, as one must forget their own subjective idea in regards to the very nature of “value”.  Genius seeks to objectively functionalize “value” to fundamentally serve the needs of all people.  For example, where does the value of gold come from?  In part it comes from the time and effort it takes to extract gold out of the ground, or its use in electronics, or its symbol of higher class when worn as jewelry. At the end of the day, gold’s value is simply derived from people agreeing that gold is mostly scarce and valuable.

We all agree, for example, that the price of something (currently settled in US Dollars) is determined in part by the market, but also the underlying tools, time, materials, technology, and other components that go into product creation.  On the other hand, we also value things with no monetary value at all, such as relationships.

To answer this question is to ask, “What is the value behind the decades of experience of those involved in creating this tool?  What is the value in the systems put in place that will help this token survive future economic storms, such as the extensive R&D that went as far as to map-out and simulate the next 50-100 years of economic changes?  What is the value of the community behind this Genius tool?"

What makes Genius valuable is also the two most fundamental things that are inherently scarce to all human beings: 1) human attention, and 2) the commitment of human intention.

Ultimately–from a strictly practical, pragmatic, economic, materialistic, etc. perspective– the token actually derives most of its value from the whole of crypto.  No matter what network the Genius Smart Financial Contract is deployed on, it will effectively squirrel away the value of the larger market over time.  It is for this reason that it cannot be stopped.  It is a crypto value extractor.


Tokenomics 101

  • Initial Supply: approximately 240 Billion (240,000,000,000) tokens.  These will all be airdropped to participants after the Genius Sacrifice, a 28-day event held sometime in the spring/summer of 2022.
  • At the maximum, an additional 14.5% of the Initial Supply, or 35 Billion (35,000,000,000) can be minted from holders of the Legacy GENI contract token.  The Legacy contract’s Ethereum / PulseChain address is:  0xaac1abdb4fb7a91a0e2e036dfacc45f708ed6a39

Scan this QR code to get the Legacy contract’s address:

  • Approximate Annual Inflation: 4.236% (φ^3)
  • Inflation is paid out to Genius Miners on a daily basis.
  • The smallest unit of Genius is a “Genito”.  A single Genius token is equal to 10^9 Genitos (1 Billion Genitos).  1 Genito = 0.000 000 001 Genius.
  • Genius will be deployed to Ethereum, PulseChain, and Binance Smart Chain.
  • Deflation Mechanics (i.e. burning mechanics) are triggered any time the end user modifies an Incentive Promise: collecting their Mining rewards early or late, auctioning a miner for value finality, etc.  Although the Genius tokens will be out of circulation due to burning, those burnt tokens are still considered in the calculation for new daily rewards.

Important Notes and Definitions

  • Formulas are notated in Excel format.
  • “Blockchain Network” is the network that hosts and executes the Genius Smart Financial Contract.
  • The “Genius token” is a unit of value that is freely transferred by the end user.  Genius token is also referred to as “Official GENI” or simply “Genius” throughout this document.
  • “PHI(φ) represents the organic growth irrational number 1.618 033 988 749 89…
  • “Incentive Promises” are actions made by the end user that allow them to “mine” for Genius tokens, increasing their share of the Genius ecosystem.  In other words, the end users are incentivized to make promises (commitments) to the network to deploy their tokens for mining.
  • A “Miner” (also referred to as a “Stake”) is a way to mine for Genius tokens by making a commitment.  When you create a Miner, you allocate an amount of Genius token to lock into the Genius Smart Financial Contract.  During this lock time, the Genius token is burned and unable to be transferred until the Incentive Promises are fulfilled or there has been a change to the Incentive Promise.
  • A “Genius Miner” is someone who currently holds a mining stake that is mining for Genius token earnings.  Simultaneously, this can also refer to the Genius Mining Stake itself.
  • “Promise Period” is the time between the Start and End date of mining.
  • “Reward Shares” are assigned to Miners and represent, proportionally, how much of the Reward Pool will be distributed to the holders of Reward Shares.  The amount of Reward Shares you have is similar to Bitcoin Mining processing power.
  • “Rewards” are extra Genius Tokens minted or redistributed to the end user.
  • This document covers a bird’s eye point of view of Genius and includes pertinent details for a low-level understanding of the Genius protocol.  You must have no expectation of profit, nor expectation of profit derived from this work or the work of others relating to this document and the tokens mentioned.  This document is not an investment nor investment advice.  This document is for reference purposes only.

Initial Token Distribution

The initial supply of Genius will be airdropped to Sacrifice participants.  A total of 240 Billion (240,000,000,000) Genius Tokens will be distributed at the initial token distribution.  For more information about the Sacrifice Phase, visit the website for the official Sacrifice event: https://sacrifice.to 

Warning:  the information contained on the Sacrifice event website is completely independent and unrelated to the Genius tokenomics explained in this white paper.  Any information derived from the Sacrifice website is not applicable, and should not be considered to be applicable, to any information contained within this white paper.

Legacy GENI token holders can, and should, participate in the Sacrifice to receive the Initial Token Distribution.  There is a massive bonus for Sacrificing Legacy GENI, and this bonus is in place to remove Legacy GENI out of circulation in favor of the new Official Genius smart contract.  Every single unit of Legacy GENI that is sacrificed will receive 3.33 times more sacrifice points than the US dollar value of sacrificing any other token.

Legacy GENI tokens can be acquired from Uniswap.  Use this web link to automatically import and swap for Legacy GENI: https://geni.to/getlegacy

Important Note on acquiring Legacy GENI: you must have no expectation of profit, nor expectation of profit derived from the work of others.

The Genius “Origin Address”

The Genius Smart Financial Contract will specify what is known as an “Origin Address” (OA) that receives a portion of penalties.  No more than φ^-4 percent (~14.5%) of penalties and Excess bids for Transfer Auctions are sent to the OA.  Furthermore, any bonuses that were lost as a result of the “Minting from Legacy GENI” functionality being executed by users beyond Genius Day 4–the day when end users will not receive the maximum minting bonus–can be claimed by the OA Beneficiary.  The OA does not receive any Genius tokens at launch.

The OA is also somewhat immune to the “wrench attack” vulnerability.  The wrench attack is when a hacker uses a wrench to violently beat up the owner of the OA to get them to surrender their access to the attacker.  Here is how the OA can proactively protect themselves:

  • The OA Grantor can change the OA Beneficiary address at any time.
  • The OA Grantor can also change the account that has the ability to change the OA Grantor or OA Beneficiary address.

This functionality also exists to Future-Proof Genius.  More information on Future-Proofing Genius is available at the end of this document.

Who Owns or Controls Genius?

Genius is a decentralized smart contract.  It is a piece of software that runs on a smart blockchain.  Therefore, it is not possible for any single person or entity to own, control, or financially benefit from Genius.  Genius is entirely operated by the actions of its voluntary end users.  The end users are entirely responsible for their interactions with the software and with any actions they take with the Genius token.  Use Genius at your own risk.


Genius Contract Guide

Claiming Genius

Participants in the sacrifice event will be able to use the Genius DAPP (Decentralized Application) software to claim their Genius airdrop.  The first reference DAPP will be deployed at https://geni.app.

Claiming Genius is done by the end user visiting the DAPP website, starting the Genius app by clicking a web link, and then connecting their blockchain account to the DAPP.  Once connected, the end user can claim their Genius and use the software.  Most of the DAPP’s functions require that the end user holds a Genius token balance in their blockchain account.

Minting from Legacy GENI

As our sacrifice phase is now over, the only way to guarantee any future legacy Genius, prior to launch is to purchase Legacy Genius on the open market and then follow the instructions below:

After the Sacrifice event has completed, and upon the first main network (“mainnet”) release of Genius, Legacy GENI can be used to mint Genius tokens.  When you mint the official Genius Token, your Legacy GENI will be converted to principal in an Advanced Stake, which will begin mining for Genius tokens.  By default, 1 Legacy GENI will mint 16.9 GENI into the principal of a new Advanced Miner.

Additionally, during the first 32 days of the mainnet launch there will be a minting bonus.  The purpose of the bonus is to incentivize Legacy GENI holders to remove their supply as early as possible to phase out Legacy GENI.  In other words, the bonus is in place to remove the placeholder token (Legacy GENI) from circulation in favor of the more useful Genius Token.

For the first 4 days of launch to mainnet, each Legacy GENI will mint a total of 1,000 Official GENI.  All Legacy GENI holders will want to mint within the first 4 days because this period will mint roughly the same proportion of Genius Token relative to the original total supply of Legacy GENI.  Less Official GENI will be minted per Legacy GENI every 4 days from launch.  Below is a listing of the rate of GENI that will be minted for every 1 Legacy GENI that is burned using the Official GENI contract’s “mint” functionality:

  • Days 1-4: 1,000 GENI
  • Days 5-8: 864.4 GENI
  • Days 9-12: 728.8 GENI
  • Days 13-16: 593.2 GENI
  • Days 17-20: 457.6 GENI
  • Days 21-24: 322 GENI
  • Days 25-28: 186.4 GENI
  • Days 29-32: 50.8 GENI

For Days 33 and onward: 1 Legacy GENI will only mint the default amount of 16.9 GENI.  The formula to calculate the exact amount of GENI to be minted is as follows:

        Mintable = Legacy GENI * FLOOR(1000 / (29.5 / (29.5 -

MIN(FLOOR( (GENI Day - 1) / 4, 1) * 4, 29) )), 0.1)

Mining for Genius Token

To mine for Genius token, you will use the DAPP software to create a Genius Miner.  You can also think of the “Miner” as a type of Incentive Promise that generates and accumulates rewards (via Reward Shares) during the promise period.  Reward Shares allow Genius Miners to receive Rewards of extra GENI every day.  When you mine for Genius, the DAPP software will invoke a function of the Genius smart contract to commit your GENI for a period of days.

For example, you may “stake” 100 GENI for 30 days, and during this time you may not access your GENI.  You will not be able to transfer or interact with the GENI that you stake while it is mining.  After the 30 days, your Genius Mining Reward Shares will expire, and you must end your mining stake to receive the 100 GENI plus the Rewards for your Incentive Promise.  For those who understand the Certificate of Model metaphor, it is also an appropriate comparison for the functionality of a bank’s Certificate of Deposit product, also known as a “Time Lock” deposit.

The Genius Rewards are drawn from a pool of Reward Shares, where your number of Reward Shares relative to the pool will calculate (proportionally) the extra GENI your stake receives when ending your stake.  In other words, the Rewards you receive is based on your shares divided by the total number of shares.

Note: Although GENI can be staked during launch day, new GENI stakes will always be applicable to earn rewards starting at the beginning of the upcoming GENI day after the GENI stake is initiated.  In other words, Genius Mining does not begin until the new day.  For example, if a stake’s Genius Mining begins on launch day (Genius Day 1), the protocol will wait until the beginning of the next day (Genius Day 2 at 00:00:00 UTC) before the stake begins mining for Genius.  It will be the following day (Genius Day 3) when the stake is credited with its first mining rewards for Genius Day 2.

Share Price and Reward Shares

The number of Reward Shares you receive upon starting your Genius Mining is determined by a Share Price.  The price at Genius’s launch to mainnet is called the “Initial Share Rate,” and the Initial Share Rate will be set to ~2,618 GENI (φ^2 * 1000) per Reward Share.

The number of Reward Shares you receive will be the amount of GENI you put up to mine for Genius Token divided by the Share Price.  However, the amount of GENI you allocate to the stake will receive a bonus based on how much GENI you stake and how long you stake that GENI.  The bonuses are:

Promise Days Bonus (aka “Longer Pays Better”): this bonus is based on the number of days you promise to keep your GENI staked.  The rate of the bonus, relative to the amount of GENI you will stake, is (Promise Days - 1) / 1456.  This incentivizes you to create longer stakes to enjoy the most rewards for your GENI savings.  The full formula, which takes into account a cap of ~2.18x the amount of GENI you are staking, is as follows:

= MIN(GENI * φ^φ, GENI * (Promise Days - 1) / 1456)

The figure (below) graphs the Promise Days Bonus when using a principal of 1,000,000 GENI.  The x-axis is the number of Promise Days, and the y-axis is the bonus amount of Genius Token.

Chart, line chart

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Notes:

  • The maximum “Promise Days” is 4,444 days, or 12 years and 2 months, depending on the leap year and number of calendar days in the month
  • Your maximum Promise Days Bonus is a little more than double of the GENI you stake.  The exact amount that this bonus is capped is relative to your GENI multiplied by φ^φ (φ to the φ power, or ~2.18).
  • To achieve a Promise Days Bonus equal to the principal, create a Genius Mining Stake for 1,457 days (~4 years).
  • For the maximum Promise Days Bonus, set the Genius Mining Stake to 3,173 days (~8.7 years).
  • The benefit of having a stake mine for Genius for beyond 3,173 days is that you get to keep your Reward Shares for an additional 1,271 days (~3.5 years).

Genius Size Bonus (aka “Bigger Pays Better”): the larger the amount of Genius you stake, the bigger the bonus.  This incentivizes the end user to create the minimum number of stakes for their goals—an incentive to save more Genius to mine for more Genius Token.  This is also an incentive to stake more quantity.  The bonus is a percentage of the GENI Principal you are staking, equal to GENI / 10^9 (1 Billion), but with the bonus percentage capped at φ/10 percent (~16.2%).

        = Principal * MIN(Principal, φ/10 * 10^9) / 10^9

To achieve the maximum Genius Size Bonus of ~16.2%, create a Genius Mining stake with the principal amount of ~161,803,399 Genius (φ * 10^8).

Also, note that the Genius smart contract handles all units in Genitos rather than Genius.  Remember: there are 1 billion Genitos per Genius, and therefore 0.000 000 001 Genius is equal to 1 Genito.  The “Genius SIze Bonus” is handled as a “Genito Size Bonus” within the smart contract:

Genito Size Bonus (aka “Bigger Pays Better”):

        = FLOOR(Principal * MIN(Principal, φ/10 * 10^18) / 10^18, 1)

Reward Shares Example:

Let’s say you want to stake 5,000,000 GENI to mine Genius for 1 year (365 days) using the “Advanced Mining” policy.

  1. The amount of GENI will be 5,000,000.
  2. The Promise Days Bonus is (365 - 1) / 1456, or 25%.  5,000,000 * 25% = 1,250,000 GENI.
  3. The GENI Size Bonus is 5,000,000 / 10^9, or 0.5%.  5,000,000 * 0.5% = 25,000 GENI.

These 3 values give you the GENI amount applicable for acquiring Rewards Shares.  The total is 5,000,000 GENI (Principal) + 1,250,000 GENI (Promise Day Bonus) + 25,000 GENI (Size Bonus), or 6,275,000 GENI.

If this stake is created at the first available day to mine for Genius, the total number of Reward Shares acquired upon creating this Genius Mining stake is 6,275,000 divided by the share rate of ~2,168 GENI per share, which is ~2,396.837 Reward Shares.

In this example, your 5,000,000 GENI will mine for Genius token for the next 365 days.  This “Genius Miner” has ~2,396.837 shares allocated to it and will receive Rewards every day in proportion to your number of shares of the global share pool.  If the Rewards payout is an average of 1.5 GENI per share per day, this stake will receive 4,341.555 GENI per day for 365 days, or a total of ~1,312,268.104 GENI in rewards at the end of the stake.  (That is a ~26.2% return on your GENI in 1 year!)

Genius Mining Policies

There are 2 types of policies that you can use for Genius Mining:

  1. Basic Mining
  2. Premium Mining

Both policies differ in how they accumulate rewards and incur penalties.  The Basic Mining policy is meant to simulate a “low risk, low reward” scenario, and the Advanced Mining policy aims to simulate a “high risk, high reward” situation.  In both policies, the “risk” is the likelihood that the Genius Miner must prematurely end their mining for matters such as a personal or financial emergency.  Let’s begin with explaining the first policy since that is the simplest ☺

Basic Mining Stakes:

  • Can mine Genius for 1 to 4,444 days.
  • Rewards are only from base inflation.
  • Of the ~4.236% total annual inflation, Simple Miners receive at most φ^-3 (~23.6%) of the total inflation.
  • Do not earn rewards from Genius Miner penalties.
  • Cannot stop mining for the first and last 10% of their mining period by default.  For example, if you create a Simple Mining Stake for 108 days, you cannot end mining on the first 10 days nor on the last 10 days of the period.  This time period will increase to as high as 38.2% (φ^-2) depending on a multiplier based on Genius Miners’ incurred penalties.
  • In most situations, only the rewards are penalized.  The principal is only ever penalized when the Genius Miner chooses to auction their miner to be transferred to another end user or if the Genius Miner neglects to end their mining after the 7-day grace period following the end of the Promise Period.

Premium Mining Stakes:

  • Mine the most Genius rewards.
  • Mine extra rewards based on the penalties incurred by Simple Genius Miners and Advanced Genius Miners.
  • Mine extra rewards from large liquidations.
  • Can mine Genius for 90 to 4,444 days.  Although Advanced Mining cannot be created to mine for less than 90 days, they can still be auctioned for ownership transfer from days 1 through 89.  All stakes can always be auctioned off by the account owner.
  • Cannot be ended early for the first 180 days.  For all Premium Genius Mining Stakes, the first 180 days can only be auctioned—they cannot be ended early!
  • Have severe penalties when you end your Genius Mining early.  Penalties can eat into your Genius rewards earned as well as your Genius Mining principal.
  • The penalties are amplified depending on how many Genius Miners have ended early in a given period.
  • Have a larger penalty when you end your Genius Mining late, beyond the 7-day grace period.

By choosing Premium Mining, you mine extra Genius that cannot be mined by the Simple policy.  Furthermore, Basic Genius Miners and Premium Genius Miners can elect to “Auction” their Mining Stakes at any time.  The Auction action creates an auction for the mining stake that allows other Genius Miners to bid on the mining stake to take possession of ownership.

Rewards Payout Calculation

At the end of every day, except the end of Genius Day 1, the contract accumulates rewards to be paid out to Genius Miners.  The daily Rewards are:

  • ~0.011525% of the Total Genius Supply, including all tokens that have been burned.  This amount equates to ~4.236% (φ^3) annually.  (To be more precise, “annually” here is a 360-day cycle.)
  • The daily rate of inflation is:
  • 11,525 / 99,999 / 1,000, or
  • 0.0001152511525…, or
  • ~0.011525%.
  • The sum of all penalties paid by miners who ended early.
  • The remainder of Principal and Rewards for miners that were exhausted from never ending.
  • Excess bids on stake Liquidations.

Individual Rewards are given to the Blockchain Network account holders who perform specific functions to support the Genius Smart Financial Contract:

  • Rewards to users who Release Shares from a miner that is past its Promise Period.  (See: LEM Rewards.)
  • Rewards to users who Shutdown Miners other than their own.  (See: LEM Rewards.)
  • Rewards to users that calculate the Daily Summaries.  (See: The Genius Calendar.)

All miners receive a daily Reward based on the mining stake policy (Simple or Advanced) and each miner’s Reward Shares versus the total global shares.  Simple Genius Miners take a maximum of ~23.6% (φ^-3) of the global share payout (minus Individual Rewards), and Advanced Genius Miners take the remainder of the shares plus accrued mining penalties.

A special note on Rewards granted to Basic Genius Miners: to guarantee that Basic Genius Miners will never receive more than ~23.6% of the mining rewards per Rewards Share compared to Premium Genius Miners, the proportion of Simple versus Advanced policies must be incorporated in the rewards calculation.  The amount of mining rewards granted to Simple Genius Miners is expressed by this formula:

        = (Daily Rewards - Total Daily Incentives) *

MIN(φ^-3, φ^-3 * Simple Reward Shares / Adv. Reward Shares)

The “Total Daily Incentives” are all of the rewards paid to individual Genius end users for functionality for summarizing Genius Days (See: The Genius Calendar).  This value will depend on the Genius Day.

Total Daily Incentives is calculated as:

  • Is the Genius Day the very first Genius Day?  Then the value is 0.  No Genius rewards are minted throughout the very first Genius Day.
  • Is the Genius Day divisible by 1,000 with no remainder?  Value: 40,000 GENI.
  • Is the Genius Day divisible by 100 with no remainder?  Value: 30,000 GENI.
  • How about divisible by 10?  Value: 20,000 GENI.
  • If neither of the conditions above match the Genius Day’s situation, then the Total Daily Incentives value will be 10,000 GENI.

Below is an example of the procedure that guarantees Advanced Genius Miners receive better rewards.

  1. Starting with an assumption of 250,000,000,000 of the total supply.
  2. ~0.011525% of the total supply is minted, adding 28,812,788.125 GENI to the total supply to be distributed to Genius Miners.
  3. Let’s assume that 10% of the total supply (25 Billion GENI) is staked, and let’s also assume that half of the Reward Shares are held by Simple Genius Miners while the other half are held by Advanced Genius Miners.
  4. Non-Stake Holders receive 0 GENI as a reward (0% rewards, annually).
  5. Let’s also assume that no Individual Rewards have been claimed, except the minimum of 10,000 GENI for the end user that executed the daily summarizing function (See: The Genius Calendar).
  6. All Simple Genius Miners will receive a maximum of ~23.6% of the minted inflation rewards: φ^-3 * (~28.8m GENI - 10,000 GENI) = ~6,799,415 GENI total paid to Simple Genius Miners.  Simple Genius Miners will be paid, proportionally, based on the number of each miner’s Reward Shares.  Since these rewards are paid out to Simple Genius Miners who are Mining with half of the Reward Shares, the average annual returns for Simple Genius Miners are ~9.9%.  This is calculated by:

    = (Global Rewards - Genius Day Summary Incentives) * φ^-3 / Total Supply * 365

/ Total Percent of Supply Staked
= ~28,
792,788.125 * ~0.236 / 250,000,000,000 * 365 / 0.1

(Note:
Genius Day Summary Incentives will be 10,000 to 40,000 GENI depending on the Genius Day.)

  1. Let’s assume that no miners halted their mining outside of their Promise Date and had paid zero penalties.  The Total Rewards to be paid to Advanced Genius Miners will not receive an extra payout bonus.
  2. Advanced Genius Miners will receive ~28.8 Million GENI less the Genius Day Summary Incentives less the Rewards paid to the Simple Genius Miners, or ~21,985,732 GENI.  The average annual returns for Advanced Genius Miners are ~32.1%.

    = (Global Rewards - Genius Day Summary Incentives - Simple Stake Rewards)

/ Total Supply * 365 / Ttl Perc Supply Staked
= (28,
792,788.125 - 6,797,055.259) / 250 Billion * 365 / 0.1

To calculate the total rewards payout for Advanced Genius Miners, that formula will be:

        = Global Rewards - Genius Day Summary Incentives - Simple Stake Rewards

+ Total Penalties Accumulated

For an in-depth analysis on the Rewards Payout Calculation for Genius Mining, see this Google Spreadsheet: https://geni.to/mining.

Normal End Mining

When a Genius Miner is shut down after the last day of the Promise Period, the miner will undergo a Normal End Mining (NEM) process.  Within 7 days of the Promise Period’s end, ending a Genius Miner will also undergo NEM.  When you end your miner stake, the following process occurs:

  1. If the Reward Shares have not been released, then they will be released.
  2. If necessary, summarize the prior day and any other prior days that have not been summarized.
  3. Lookup the Payout Per Share summaries for every given day during the Promise Period.
  4. Multiply the miner’s number of Reward Shares by the summarized Payout Per Share.  The result is the total Rewards accumulated by the miner during the Promise Period.
  5. Did the miner shut down early?  If so, calculate EEM Penalties.  (See: Early End Mining.)
  6. Did the miner shut down late?  If so, calculate LEM Penalties.  (See: The Late End Mining Phase.)
  7. Calculate the total Payout due to the owner of the miner, and credit that Genius back to the owner.
  8. Update the new Share Rate if necessary.

For example, let’s say that a Simple Miner just finished mining for a short number of days.  A short number of 12 days will be selected to simplify the complexity of this example.

Example Simple Genius Miner:

  • Mode: Simple
  • Start Day: 2
  • Promise Period: 12 (days)
  • End Day: 14
  • Principal: 2,500,00 GENI
  • Reward Shares: 964.52
  • Share Rate: 2,618.03 Genius per Reward Share

Note: this spreadsheet was used to calculate the Reward Shares: https://geni.to/mining

When Genius Day 14 comes, the owner of the Genius Miner goes to the Genius DAPP and then selects the “Shutdown” functionality.  First, let’s talk about what happened on the days before Day 14.  For each day, the (example) Payout Per Share for Simple Miners was determined by the Genius Calendar functions (See: The Genius Calendar).

Genius Day vs. Payout Per Share (Simple)

2

3

4

5

6

7

8

9

10

11

12

13

2.995

2.330

0.701

0.692

0.480

0.211

0.168

0.168

0.168

0.166

0.165

0.161

Whenever the Genius Day is divisible by 10, 100, or 1,000 without a remainder, a summary of the days may exist due to the Genius Summary Incentive.  Only 1 period of 10 days would have been recorded in this example:

Genius Days vs. Payout Per Share (Simple) during the days summarized

10*

7.745

In the above table, “10*” represents the summary of Days 0-9, and “20*” would represent Days 10-19.  For the first “10*” summary, Genius Day 0 did not exist and Day 1 had no payout because it was impossible for any miners to have started running on Day 1.  Therefore, between Genius Days 0 and 9, a total of 7,742 GENI would be minted (paid out) as a Reward for each Reward Share held by the Genius Miner.  The asterisk (*) denotes that the number represents a summary of the prior 10 days.

Here’s what happens in this example to the Example Simple Genius Miner:

  1. The 964.52 Reward Shares are released (burned).
  2. The Payout Per Share for Simple Miners is:

Genius Day vs. Payout Per Share (Simple) – Note: * = this is a summary of prior days

10*

10

11

12

13

7.745

0.168

0.166

0.165

0.161


Summarized Payout = 7.745 + 0.168 + 0.166 + 0.165 + 0.161 = 8.405.

Note that these numbers are an example based on a simulation where more miners are actively being created per day shortly after the official launch of Genius.  The simulation does not know the future and is only for example purposes, like every example within this document, and should never be taken as financial advice.

  1. Rewards = Summarized Payout * Reward Shares
    8,106.7906 = 8.405 * 964.52
  2. No EEM Penalties.
  3. No LEM Penalties.
  4. Payout = Principal + Rewards - Penalties
    2,508,106.7906 = 2,500,000 + 8,106.7906 - 0
  5. New Share Rate: ~2,631.9 Genius per Reward Share

After shutting down the Simple Miner, the owner of the Example Simple Genius Miner received back their full principal and Rewards, totalling 8,106.7906 Genius more than the Principal.  On an annual basis, this is about 9.8% extra in Genius rewards for the Simple Miner.

Penalties and Avoiding Penalties

No one likes penalties, and the GENI contract has flexible means to maximize your rewards, and it all boils down to keeping your original Incentive Promise to the network.  Penalties are only incurred when you do not fulfill your promise.  There are 4 ways to avoid penalties:

  1. Pay attention to your Genius Mining so that you do not end the miner late.
  2. When you create a Mining Stake, use the “Simple Mining” policy instead of the “Advanced Mining” policy.  The principal GENI is not penalized when Simple Mining ends before its Promise Date.
  3. If you have an Advanced Mining Stake, fulfill your promise, and do not halt mining prematurely or after the ending 7-day grace period.
  4. Do not Auction any of your Genius Mining Stakes.  (See: Transfer Auctions.)

Likewise, there are 3 ways that Genius Miners are penalized.  Penalties incur when the miner:

  1. Sets a Genius Mining stake to be auctioned.
  2. Ends Genius Mining before the Promise Day (prematurely).
  3. Allows the Genius Mining to continue after the 7-day grace period beyond the Promise Period.

For Simple Mining, penalties are only applied to the GENI rewards you have accumulated.  Your principal GENI will only be penalized after some time of not claiming your Genius Mining rewards once the mining’s Promise Period has matured (i.e., served its time) or if you choose to auction your Genius Miner.

For Advanced Mining, penalties can eat into your principal GENI.  People select the “Advanced Mining” policy when they are absolutely positive that they will fulfill their promise.

Penalty Mechanics

Penalties are treated differently between Simple and Advanced Genius Mining, and these two will be separated.  With all mining, the total payout for ending the mining will be calculated by:

        PAYOUT = Principal + Rewards - Penalties

Penalties are in place to lessen GENI’s market selling pressure.  This can support more market buying pressure over time.  Although excellent price performance is welcomed by everyone, the more buying pressure means that the mining penalties may no-longer dissuade Genius Miners from terminating their mining early to realize individual profits.  In scenarios like this where GENI’s price performance outpaces the penalty that Genius Miners must pay to end their mining early, GENI’s price and liquidity can experience excessive selling pressure.  The Penalty Multiplier exists to guard against negative market impacts such as described above.

You will notice throughout this document that φ is used in the Penalty calculations.  The purpose of using φ is to mimic nature’s rate of organic growth.  Furthermore, the Genius Miner will initially realize net positive Genius rewards after the mining stake has served ~61.8% (1/φ) of the Promise Days, assuming that no other miners in the ecosystem ended prematurely.

All Penalties accumulated are redistributed as follows (“Penalty Redistribution”):

  • ~61.8% (1/φ) of penalties are distributed to Advanced Miners.
  • ~23.6% (φ^-3) of penalties will remain out of circulation.
  • ~14.6% (φ^-4) of penalties are sent to the Origin Address.

These formulas are used to calculate the penalty distributions, where “Penalties” is in Genitos:

To Advanced Miners = FLOOR(Penalties / φ, 1)

Removed from Circulation = FLOOR(Penalties * φ^-3, 1)

To Origin Address = Penalties - To Advanced Miners - Removed from Circulation

The Penalty Multiplier

The Penalty Multiplier exists to protect the market value of Genius after the market has experienced significant buying pressure, such as during a bull market.  The Penalty Multiplier is one of the mechanics in place to protect the Genius market value.  Furthermore, Genius Miners who consider early ending an existing miner to re-engage in another mining stake for longer periods of time will find it more economical to have mined for significantly longer periods of time from the beginning when they created the Genius Miner.  In other words, because of the Penalty Multiplier, Advanced Genius Miners are economically incentivized to keep their original promise instead of modifying it.

When a Genius Miner ends a mining stake before the Promise Date, the Penalty Multiplier is calculated using the Penalty Counter, and then upon successfully ending the mining early, the Penalty Counter is incremented.  With the new Penalty Counter value, the Penalty Multiplier will be higher than it was previously.  To calculate the Penalty Multiplier from the Penalty Counter:

        Penalty Multiplier = Penalty Counter * φ^-5 + 1

It is important to note that there is a global “Penalty Counter.”  With each new mining stake, its own individual “Penalty Delta” will be accounted for within the stake’s dataset, and this value tracks the value of the global “Penalty Counter” for the sake of calculating how much the counter had changed since the mining stake’s birth.  It is important to have the Penalty Delta associated with the Genius Miner so that the Genius miner’s Penalty Multiplier begins at the default penalty at the beginning of the Miner’s creation and only increases after each other miner in the contract ends prematurely.

Therefore, the Penalty Multiplier is more accurately expressed as:

        Penalty Multiplier = MAX(0, Penalty Counter - Penalty Delta) * φ^-5 + 1

When a mining stake is created, which is always on the current Genius Day (a partial day), the mining stake’s Penalty Delta is set to the current value of the global Penalty Counter.

At the beginning of every 90th Genius Day, the Penalty Counter is modified by 1/φ so that the counter is decreased.  To calculate the new Penalty Counter after 90 days:

        Penalty Counter = FLOOR(Penalty Counter / φ, 1)

Early End Mining

When Genius Miners end early, they are automatically enrolled to do the prior day summary calculations (See: The Genius Calendar).  When an end user terminates their Advanced Genius Miner before the Promise Date, this is called Advanced Early End Mining (“EEM”).

        PENALTY = Penalty Multiplier * Promise Days / φ / Days Served * Rewards

When an end user terminates their Simple Genius Miner before the Promise Date, this is called Simple EEM.  Simple Mining does not lose mining rewards; however, it is only possible to Simple EEM between 10% and 90% of the Promise Period’s timeline, and this period is also variable.  The time that is within the first 10% or after the last 10% of the Promise Period is called the “Blackout Period”, and this is when Simple Mining Stakes cannot be terminated early.  During the Blackout Period, Simple Mining Stakes can only be Auctioned for Transfer.

The Penalty calculation for Simple Mining Stakes does not include the Penalty Multiplier, and it also enforces that the Genius Miner does not lose their principal:

        PENALTY = MIN(Rewards, Promise Days / φ / Days Served * Rewards)

Variable Blackout Periods

The Blackout Period will be a minimum of 10% of the start and end of the Promise Period, totaling 20% of the Promise Period.  The maximum Blackout Period is ~38.2% (φ^-2) at the start and end of the Promise Period, or a total of ~76.4% of the Promise Period.  The Penalty Multiplier influences this value.  The Blackout Period is calculated as:

        Blackout Period = MAX(0.1, MIN(φ^-2, 0.1 * Penalty Multiplier / φ^3.5))

This calculation gives a percentage, and once the percentage is determined, then the number of Blackout Days at the beginning and end of the Promise Period is calculated as:

        Blackout Days = MAX(0, FLOOR(Promise Days * Blackout Period, 1) - 1)

The Variable Blackout Period’s math is designed to accelerate a 365-day Genius Miner’s Blackout Period to the maximum when there is net 1 EEM per day.  This acceleration, if started at the beginning of a Simple Miner’s Start Day, will increase the Blackout Days until the maximum days before a Simple Miner will be able to EEM.  It is worth noting that with the above calculation, the total number of days where the Simple Miner cannot be terminated is Blackout Days * 2.  Remember: there is a Blackout Period once the Simpler Miner starts and another Blackout Period before the Simple Miner completes its Promise Period.

A 20-day Simple Stake is the shortest stake that will have 1 Blackout Day at the beginning and end of the stake’s Promise Period.  Simple Miners of 19 or less Promise Days are an exception and do not have a blackout period.

The Late End Mining Phase

When a Miner continues past its Promise Day, it is considered to be in its Late End Mining (LEM) Phase.

Late Fee Start Day = Miner Start Day + Miner Promise Days + 7

If a miner’s Start Day is on day 1 and the miner promised to mine for 8 days, the first full day that the miner will incur a late fee is on day 16.

        Late Fee Start Day (16) = Miner Start Day (1) + Miner Promise Days (8) + 7

For each day that an Advanced Miner has not been claimed past the 7-day grace period following its Promise Date, which is calculated as the Late Fee Start Day above, the Advanced Miner incurs a penalty of ~0.374% ( (φ^2) / 7 ) of the Principal and Rewards (“Payout”).  The grace period is 7 days.  The mining stake will exhaust its Payout in a maximum of 268 days ( CEILING(1 / (φ^2 / 7 / 100), 1) ), or just shy of 9 months.  This penalty is ultimately deducted from the Payout.  For the Simple Mining policy, the penalty is ~0.231% (φ/7) per day, exhausting the miner’s Payout in a maximum of 433 days ( CEILING(1 / (φ / 7 / 100), 1) ), or in a little more than 14 months.

        Simple Miner Daily Late Fee = MIN(Payout, CEILING(Payout * φ / 7 / 100, 1))

        Advanced Miner Daily Late Fee = MIN(Payout, CEILING(Payout * φ^2 / 7 / 100, 1))

Both Simple and Advanced Mining have a 7-day grace period after the Promise Day to end without penalty.  These penalties are not deducted or redistributed until someone calls the “Release Shares” function or the “Shutdown Miner” function.

Why is there a penalty for ending the mining later than promised?  Due to the technological limitations of transaction-based smart contracts, Genius would need to be implemented so the miner’s Reward Shares cannot be removed until the owner explicitly ends the mining.  This causes other miners’ earnings to be diluted.  End users are incentivized to run smart contract functions to help manage these miners, even on behalf of all Genius Miners, for the good of the entire ecosystem.  These incentives are referred to as Late End Mining Rewards, or LEM Rewards.

LEM Rewards

Release Shares

Release Shares is a smart contract function that burns all of the miner’s shares and gives an LEM Rewards Bonus to the Blockchain Network account that invoked this function.  Any account, even the owner of the Genius Miner, can call the Release Shares function; however, it is only possible to run this function on or after the day that a miner is scheduled to end.  Furthermore, it is economical to invoke “Release Shares” after the grace period is over for the miner’s expiration because the LEM Rewards Bonus that the account receives are equal to all LEM Penalties that have accrued.  When LEM Penalties are calculated during Release Shares, the Miner Daily Late Fee is only based on the miner’s Principal, rather than the Principal and the Rewards:

        Simple Miner Daily Late Fee = MIN(Principal, CEILING(Principal * φ / 7 / 100, 1))

        Advanced Miner Daily Late Fee = MIN(Principal, CEILING(Principal * φ^2 / 7 / 100, 1))

        LEM Penalties = MIN(Principal,
                MAX(0, Genius Day - Promised End Day
- 7) * Miner Daily Late Fee)

Note: the formula must calculate the minimum of Principal or the Late Fees because the CEILING of the Late Fees may be greater than the Principal in instances where the miner’s Principal is less than 300,000 Genitos (0.0003 GENI).

If the LEM Penalty is not economical compared to the Blockchain Network transaction fee to invoke the function, then it may also be economical for this function to be called by large Genius Miner owners.  For larger miners, the amount of shares being released from the late miner may be enough to secure significant earnings since the shares may have a bigger impact on diluting  the earnings of the larger miners.

Remember: all LEM Penalties accrued before the current Genius Day are given to the account that executed the Release Shares function.  This Genius Day is recorded into the miner’s “LEM Claim Day” property.

Upon successful execution of this smart contract function, the account that invoked the function will receive the LEM Penalties.

Shutdown Miner

The earliest that the Shutdown Miner function can be invoked is when the miner has surpassed the maximum number of expiration days past the Promise Period–433 days for Simple Miners and 268 days for Advanced Miners.  This function can be called by any end user, including the Genius Miner’s owner.  For the owner, this is the last chance to recoup any of the exhausted fees from the miner.

        LEM Penalties = MIN(Principal, MAX(0, Miner LEM Claim Day - Miner Start Day +

                Miner Promise Days - 7) * Miner Daily Late Fee)

Note: the Miner Daily Late Fee is the same calculation used for LEM Rewards where the fee is based on the Principal instead of the Payout (Principal plus Rewards).

        Remaining Late Fees = Principal + Rewards - LEM Penalties

Upon successful execution of the Shutdown Miner function, the account that invoked the function receives φ^-3 (~23.6%) of the Remaining Late Fees, and the remaining ~76.4% (1/φ + φ^-4) undergoes Penalty Redistribution.

Important: miners that are Shutdown from being exhausted by LEM Penalties will not invoke any functionality to update the Share Rate.

Stale Miner

A “Stale Miner” is considered to be a Genius Miner that was exhausted by LEM Penalties and unattractive to be “Shutdown” by the Genius ecosystem’s community.   Until these miners are shut down, the Miner’s Principal and Rewards will remain in the contract’s “Burned Supply” global variable until it is economically worth releasing them.  If the Stale Miner’s Reward Shares have not yet been released, then its Reward Shares–along with any other Stale Miner’s un-released Reward Shares–will continue to dilute all other Genius Miners’ daily payout until it is economical to shut down these Stale Miners.

LEM Functionality and the Auction Pool

Upon successful execution of the Release Shares function, if the Genius Miner was in the Auction Pool with zero bids, then the miner will also be removed from the Auction Pool.  Furthermore, the Shutdown Miner function will fail if an auction has on-going bids.

Transfer Auctions

A Transfer Auction is when the holder of a Genius Miner wishes to transfer the ownership of their Genius Miner to the highest bidder of an auction.  Transfer Auctions are initiated at the will and approval of the Genius Miner.  Miners cannot be initiated for a Transfer Auction on or after the final day of its Promise Period.  Owners of a Genius Miner may want to Transfer the ownership for a variety of reasons, such as having emergency liquidity needs while being unable to end their mining earlier than the miner’s Promise Day.  For example, this can be due to the Genius Day being within a Blackout Period for Simple Miners or when an Advanced Miner has only served less than 180 days.  Owners of Advanced Genius Miners may also want to Transfer the ownership because the EEM Penalties will be too harsh and likely result in less liquidity than an auction to transfer miner ownership.

When the Genius Miner sets their mining stake to be auctioned for transfer, the mining stake is put into an Auction Pool where anyone can opt to bid on the mining stake.  The miner will still earn rewards throughout the life of its mining stake.

Important Note: While the Genius Miner is in the Auction Pool, the miner cannot be ended until it is removed from the Auction Pool.  If the Release Shares function is invoked for the miner, then the Release Shares function will remove the miner from the Auction Pool if there are no bids.  Furthermore, a miner cannot be transferred into the Auction Pool if the current Genius Day is equal to the miner’s ending day.

All auctions start at a bidding price equal to ~9% (φ^-5) of the auction’s Principal (“First Bid”), and this value is only calculated at the time of the beginning of the auction.  In other words, when the first auction bidder accepts to bid on the auction, the first bidding amount is forced to be equal to the First Bid.  This First Bid is also the minimum amount of GENI that will be burnt (“Guaranteed to Burn”) upon the Genius Miner’s transfer of ownership to the winning bidder.

Bidders can bid any amount greater than the current bid, and there is no maximum bid amount.  When a new bid is posted, the GENI for the new bid is locked into the smart contract and the GENI for the previous bid is returned to the previous bidder.  Once the auction is won to the highest bidder, the Genius Tokens held aside for the largest bid are then distributed by the following procedure:

  1. The First Bid (~9% of the Principal) was already set aside to be guaranteed to be burned, and ~91% is the Remainder to Distribute (RTD).
  2. From the RTD, the prior Genius Miner (prior owner of the mining stake) will receive ~38.2% (φ^-2) of the RTD, but no more than ~38.2% of the miner’s Principal.  The value that the prior owner receives is referred to as the “Seller Liquidity”.  The remainder is considered the “Excess” Genius.
  3. The remaining Excess undergoes a redistribution amount that is different than that of Penalties:
  1. 1/φ (~61.8%) will be burnt,
  2. φ^-3 (~23.6%) will be redistributed to Advanced Miners, and
  3. φ^-4 (~14.6%) is sent back to the Origin Address.

The Excess is distributed similar to the Penalty Redistribution ratios; however, the amount burnt and the amount redistributed to Advanced Miners is swapped.  A larger supply is burnt to prevent the tokens from ever going to the market after this bidding period had potential to increase market buying pressure.

The winner of the auction is then granted the ability to claim possession of the Genius Mining Stake, which is a procedure that will also distribute the winning bid appropriately.  Likewise, the prior owner who initiated the Auction Transfer of the Genius Miner can also execute the contract procedure that will distribute the winning bid and grant the auction winner new ownership over the Genius Miner.  Any end user can run this final functionality.

In Summary:

  • All Transfer Auctions guarantee an amount of Genius to be burned from the market, and that amount is ~9% (φ^-5) of the Principal.
  • The original Genius Miner risks liquidating a stake to only 1 bidder.  If there is no more than 1 bidder, the original Genius Miner will receive no GENI for their liquidation.
  • Auctions last for 24 hours; however, after each bid the contract guarantees that the minimum remaining time for the auction is at least 5 minutes.

FOR EXAMPLE:

Let’s say that Mark wants to get liquidity for his Advanced Miner that contains 10,000 GENI Principal.  Mark will signal to the Genius smart contract that he wishes to auction his miner, along with all of its accrued rewards and future rewards, to be transferred to another owner that will give him the most liquidity.  At this moment, the maximum bid is 0 GENI, and the Genius Mining Stake is flagged for auction.

Only when the first bid is placed will the auction time begin counting down from 24 hours.  The first bidding, regardless of the bid size, forces the initial bid to be ~901.7 GENI, no more and no less.  In this example, let’s say that the Winning Bid amount is 12,000 GENI.

  1. ~901.7 GENI (~9%) of the Principal was already set aside to be guaranteed to be burnt ( “Guaranteed to Burn” or previously known as “First Bid”), and the remainder of ~11,098 GENI (~91%) is the Remainder to Distribute (RTD).
  2. The prior owner of the Genius Mining Stake will receive ~3820 GENI Seller Liquidity, which is φ^-2 of the Principal (10,000 GENI).  The prior owner will receive the proportion based on the Principal of 10,000 GENI instead of the Winning Auction (Highest Bid: 12,000 GENI) because the Principal is the lesser.  The remaining ~7278 GENI is considered the “Excess” Genius.
  3. Of the remaining Excess:
  1. ~4498 GENI (~61.8% of the Excess) is additional Genius Tokens to burn,
  2. ~1718 GENI (~23.6%) will be redistributed to all Advanced Genius Miners, and
  3. ~1061 GENI (~14.6%) will be sent to the Origin Address.

Since Mark’s miner was an Advanced Genius Miner instead of a Simple Miner, his (prior) mining stake will receive its rightful share of its own ~23.6% redistribution fee.

Formula Summary

This is a lot of information to digest.  Here’s a summary of all formulas in the order that the tokens for an auction will be distributed, assuming that “Winning Bid” is the final and largest bid value received from the auction’s buyers.

Guaranteed to Burn (First Bid) = LOWER(Miner Principal * φ^-5, 1)

Remainder to Distribute (RTD) = Miner Principal - First Bid

Seller Liquidity = MIN(Miner Principal, RTD) * φ^-2

Excess = RTD - Seller Liquidity

Excess Burnt = FLOOR(Excess / φ, 1)

Penalties to go to Advanced Miners (“Adv Penalties”) = FLOOR(Excess * φ^-3, 1)

Penalties to go to the Origin Address = Excess - Excess Burnt - Adv Penalties

There is an additional, and important, note for when Genius Tokens are “removed from the total GENI supply (burnt)”.  It is better to state that these tokens are removed from circulation, but they are still considered when calculating the daily Genius rewards that will be distributed to Genius Miners.  The game theory behind this mechanic is so that as the Genius Miner population grows over time, the proportional rewards distributed to Genius Miners also grows.  This is one of the mechanics to mimic compounding interest.

The following is a pie chart that illustrates the distribution of the Winning Bid.

Chart, pie chart

Description automatically generated

Share Price Mechanics

After every Genius Day, the Share Rate will increase by the Daily Increase.

        Daily Increase = φ * (FLOOR(Genius Day / 360, 1) + 1)

The Share Rate also increases throughout the day when Genius Miners end with a payout value greater than the original amount of principal used for the Genius Miner.  The rate increase will be large enough so that the Genius Miner will only be able to repurchase the same amount of Reward Shares if they were to dedicate the prior mining stake’s entire GENI Principal and Rewards earned for a new Promise Period that is longer.  That longer length for the new Promise Period to get the same number of or more shares will be at least φ^-3 longer (~23.6%).

Below is the formula that calculates the new share rate candidate.  Note that “Payout” here represents the Genius Miner’s full payout of Principal + Rewards - Penalty, and the Promise Days and Shares variables represent those values of the mining stake that was just ended by the Genius Miner.

New Share Rate = (Payout  +

MIN(Payout * φ^φ, Payout * MIN(
                4444, CEILING(Promise Days * (1+φ^-3), 1) - 1) / 1456) +

                (Payout * MIN(Payout, φ/10 * 10^18) / 10^18))

/ Original Share Rate

It is important to note that the new share rate calculation assumes that the Genius Miner Stake ended with a Payout greater than the Miner Principal.  If the Genius Miner’s payout was less than their original principal, such as in the example of paying EEM Penalties or LEM Penalties, then the share rate will not be updated.

Here is an example process of how the share rate is updated on a continual basis:

  1. Is the Genius Miner’s Payout greater than or equal to the Genius Miner’s original Principal?  If yes, continue to the next step, otherwise this process is terminated.
  2. Calculate the Next Share Rate using the New Share Rate formula above.
  3. If the New Share Rate is greater than the maximum share rate (to be determined upon implementation), then the New Share Rate will be set to the maximum rate.
  4. If the New Share Rate is greater than the Share Rate, then update the Share Rate to the New Share Rate.

The Share Rate is stored in Genito units.  For the sake of accuracy when calculating Miner Rewards based on shares, the number of shares are stored with a decimal accuracy of 12 digits of precision.

The Genius Calendar

Genius Days move forward at midnight (00:00:00) UTC time.  Day 1 is the day that Genius is launched to the Blockchain’s main production network.  Note: since all numbers start at the value of 0 within Genius’s source code, “Day 1” is actually recorded within the smart contract as day 0.

The earliest that Genius Miners can be created are on Day 1, which means that the earliest Genius Day that miners begin mining is on Day 2.  Once Day 3 comes, it will be the first day that any Genius Miner will be eligible to receive its first rewards from the prior day (Day 2).

Although Genius Days are theoretically aligned with civilization’s normal calendar relative to midnight UTC time, Genius Days do not “move forward” automatically.  In fact, for every Genius Day that moves forward, the smart contract aggregates a summary of what happened during the Genius Day.  Likewise, all Genius Days will also be “summarized” into groups of 10, 100, and 1,000 days.

Since Genius Days do not move forward automatically due to the limitations of transaction-based smart blockchains (such as Ethereum), the Genius Miner or end user to run the smart contract function to summarize the prior Genius Day, or the Genius Miner who is the first to end their miner after a new day, will automatically update the Genius Day and Day Summaries.  Additionally, this functionality can be called by any account on the Blockchain Network.

Genius Day Summary Incentive

There is an incentive for the first account that calls the smart contract’s functionality to summarize the previous Genius Day and the Genius Day Summaries (“Daily Incentives”).  However, if no one executes this functionality, the functionality will be triggered eventually when an end user interacts with the Genius contract.

These incentives are part of the daily inflation plans, and they are each granted individually at the maximum of once per day to the end user that calls the function.  These are all referred to as “Individual Rewards”.  For the individual rewards, 10,000 GENI is given to the account that runs the function to summarize:

  • each prior Genius Day.
  • each group of 10 Genius Days.
  • each group of 100 Genius Days.
  • each group of 1,000 Genius Days.

Since no shares will be present on Day 1, and for any theoretical day where there are 0 shares, there will be no Genius inflation rewards paid at the end of Day 1 or any 0-share day.  It is worth noting that on the first day that earns inflation rewards, the daily inflation on a supply of 240 Billion Genius will be ~27,660,276.60.  Therefore, the Daily Incentives will never be 0.15% or greater than the daily reward.

        ~0.15% = 40,000 / ~27,660,276.60

Any Blockchain Network account can call any of the functions to summarize the Genius Day, or group of days, and receive the Summary Incentive.  Other end user actions will also call summary functions and reward the end user, if applicable.

  • Any user: Summarize the prior days and groups of Genius Days.
  • Users ending a mining stake: Summarize the prior days.
  • Users ending a mining stake early: Summarize the prior days and groups of Genius Days.
  • Users ending a mining stake late: Summarize the prior days and groups of Genius Days.

Future-Proofing Genius

Important Note: the Future-Proofing functionality can only be executed by the account owner!  No other account may call this function!  Accounts are always in complete, exclusive control of the owner of the wallet’s cryptographic private key.

There is a “Proof of Benevolence” function that allows any number of an account’s Genius Tokens and/or Genius Mining Stakes to be removed from circulation.  This transaction that removes the Genius Tokens or Miners can be used to “move” the tokens/miners to another smart contract or smart chain or any other special functionality across smart contracts.

Proof of Benevolence tokens and miners are handled automatically by the Genius Smart Financial Contract:

  1. Tokens are burnt.  They are still considered to be part of the supply for inflation rewards; however, the coins are transferred to the network’s Null address.
  2. Miners are immediately terminated, and fees are handled appropriately.  Any payout to the account holder is instead paid out to the network’s Null address.

Only account owners can execute Proof of Benevolence with their own tokens and miners.

Furthermore, there will be a “Proof of Exodus” function.  This function is performed on a Genius account, where all tokens and miners under that account are affected.  The idea is that the Genius account will leave the environment of the Genius Smart Financial Contract and exist in another environment (“Exodus”).  Proof of Exodus guarantees and signals that the tokens and miners will be moved, or handled, onto another smart contract while still remaining in the Genius Smart Financial Contract in an artificial state of “normal” behavior.

Any account that runs Proof of Exodus only affects the account’s Genius Miners and the current balance of Genius tokens.  All Genius tokens are burnt, and the miners will be marked in a way where they can never be finished, resulting in the exhaustion of their resources by late penalties.  Genius Miners marked as “Exodus” can still have the Release Shares and Shutdown Miner functions run on them.

The Proof of Benevolence and Proof of Exodus functionality should only be used by other smart contracts to add Genius utility to their own ecosystem.