A quick overview of Archway, the value capture chain that will soon be available for public sale on Coinlist.

2023-06-14 18:00

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Original Title: "A Quick Look at Archway, the Value Capture Chain Soon to be Publicly Sold on Coinlist"

Original Author: Joy, PANews

CoinList will launch the Archway (ARCH) token sale at 01:00 on June 16th Beijing time. With the token sale, Archway officially begins its journey of value capture.

Archway is a native Layer1 blockchain built on components developed by the Cosmos team. In addition to the common functions shared by general public chains, more than a year ago, the Archway protocol proposed the idea of "value capture", which means that anyone who contributes to the protocol can receive value in return. The idea of value capture is very popular, and some protocols have also tried to implement it through gas rebates, token redistribution, and other methods, but the core problem has not been solved so far: Dapps cannot truly benefit from and participate in the value capture of L1, and the value they create for L1 is not proportional.

In March 2022, Phi Labs, the developer behind the Archway protocol, announced the completion of a $21 million seed round of financing, with CoinFund and Hashed leading the investment. Other participants included 1confirmation, IDEO CoLab, Figment, Blockchain Capital, Wintermute, Chorus One, stake.fish, Lemniscap, Cosmostation, and Hypersphere Ventures. Griffin Anderson, the founder of Phi Labs, has been a contributor to Ethereum since 2015 and previously served as Senior Product Director at Consensys. Before founding Phi Labs, he was the Product Lead at Ignite, a core development company for Cosmos.

What is Value Capture Chain

In short, it means benefiting from the value created on Layer1. Currently, the main beneficiaries of the value on Layer1 are miners or large token holders/stakers. However, Dapps that provide value to the on-chain ecosystem and continuously drive L1 value growth through user-paid gas fees do not directly enjoy these value captures.

The Archway protocol includes a value capture engine, which appears in the form of several new modules added to the existing Cosmos SDK modules. The value capture engine allows developers to receive a portion of gas fees, a portion of inflationary tokens, and additional margin. This way, developers will receive sustainable income directly driven by the value they bring to the network.

Developers of Dapps on Archway will receive income proportional to the value they create. Specifically, the value capture engine module allows the protocol to calculate the amount of gas generated by each smart contract in the Dapp, and directly allocate the percentage of tokens earned over time to the wallet address of each relevant smart contract.

For example, if developers use Archway's infrastructure to build a stablecoin project, the network will programmatically send ARCH tokens to its creator every time stablecoins are transferred. Additionally, every time a contract is called by another contract on Archway, both the calling contract and the original contract will receive ARCH tokens. This means that when the stablecoin is used on another Dapp on Archway, both the stablecoin issuer and the calling contract will receive ARCH tokens.

The project owner can implement these ARCH rewards in multiple ways to enhance the economic benefits behind the minting, transfer, and burning of stablecoins. For example, stablecoin issuers can decide to put their earned ARCH rewards into a reserve pool, which can be used for certain DeFi operations by issuing/transferring these ARCH tokens.

ARCH Token Usage

Archway Network上的ARCH代币用例包括：

The use cases of ARCH token on Archway Network include:

Safety: ARCH will protect the Archway blockchain through staking. Token holders can choose to become delegates by staking their ARCH with Archway validators. Their shared responsibility is to validate transactions and maintain network security. In return, validators and their delegates earn a portion of the token inflation.

Governance: ARCH will become the native governance token of the Archway Network. Holders will be able to propose suggestions for chain upgrades, community decisions, parameter changes, and more through on-chain governance. At the same time, delegates and validators will be able to vote on proposals proportionally based on the number of tokens they hold.

Transaction Fees: ARCH will be used to pay fees on Archway, which will be allocated to validators and smart contract developers on the network.

Dapps Revenue Distribution: ARCH tokens will be distributed to developers on a block-by-block basis through programming according to the usage of the smart contract.

The Archway Foundation has recently launched a funding program to support the development of the ecosystem. The core team has created Area-52, a free interactive online platform that teaches developers of any skill level how to build and deploy Dapps on Archway.

Actually, strategies that may have been successful in the early days of the cryptocurrency community are unlikely to work today, and most platforms compete in similar technical areas. In Archway's view, users and investors want to understand the actual key differentiating factors in the operating model. In the long run, the existence of a fair financial model for all stakeholders may be a key factor in winning. A sustainable business model will provide continuous driving force for the development of the community.