3.6. Gradual Unlocking
The price of any asset is determined by the actions of one decisive and highly motivated participant, not by the consensus of many. If such a participant can emerge only among buyers, not sellers, the asset’s price will inevitably rise.
The “Gradual Unlocking” mechanism is a key element in DeflationCoin's pricing model. By gradually releasing coins from Smart-Staking, strong selling pressure is eliminated, while strong buying potential is maintained.
Coin unlocking after the completion of Smart-Staking occurs daily and is calculated using the following formula:
Formula Parameters:
- Number of coins unlocked per day.
Q - Total number of coins in Smart-Staking at the start of the unlocking period.
D - Accumulated unpaid dividends over the staking period.
- Number of years the coins were locked in Smart-Staking.
Bitcoin has repeatedly experienced price declines of over 80%, making it difficult to position it as a reliable storing value. At any moment, investors may face significant capital losses.
Sudden price drops on cryptocurrency exchanges often occur in a domino effect:
A stop-loss order from one participant triggers a price drop.
This activates stop-loss orders from others, causing a chain reaction.
High leverage amplifies this process: liquidations of highly leveraged positions lead to further sales, accelerating the asset's collapse.
Panic among some participants provokes panic among others, resulting in substantial price declines.
The “Gradual Unlocking” mechanism minimizes the risk of mass sell-offs, reducing the influence of human factors and negative emotions. As a result, DeflationCoin is a more reliable storing value compared to Bitcoin, which has repeatedly suffered severe price crashes.
Ignoring the risks of low-probability events is unacceptable solely because of their low likelihood.
Such events can have a significant impact on systems, companies, markets, and even entire economies. Without proper protection against them, any risk management becomes merely an illusion of control. It is precisely low-probability risks that can lead to the most severe consequences, and neglecting them means lacking real control over risks as a whole.
In the case of Bitcoin, the risk of a sudden price drop: such as during the COVID-19 pandemic when major holders sold en masse and the price declined by more than 50%. With the “Gradual Unlocking” mechanism, such scenarios are effectively prevented in DeflationCoin.
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