Xaurum, the gold backed crypto asset project that was first received with some skepticism from the community (mostly due to it’s complex nature), has recently received a well-deserved vote of trust by investors during a Rebirth Initial Coin Offering (RICO) period, that gathered the equivalent of 851,342.36 USD. The RICO period is not only a time to gather investments but also to move from a centralized Proof of Stake cryptocurrency to a smart contract & token system built on Ethereum.
In order to fully understand what the Xaurum RICO means, we need to look back at the original project and the concept on which it stands. Most people compare Bitcoin to gold and often see it as a store of value, which may be misleading as nothing really prevents Bitcoin’s price to drop to zero as there is nothing but “itself” or its technology backing it. Xaurum proposes a different model that serves as a store of value first, regardless of the technological features (which explains why moving to Ethereum is a viable option).
Xaurum is in itself, an economic system or game in which the native currency will always increase in value despite its inflationary nature, thus acting as a means to preserve value and to accumulate it.
This system is comprised of 5 key elements:
The Guardian Nodes – Centralized nodes that maintain the blockchain and receive the newly created coins. Profits from Guardian Nodes (Transaction fees) are reallocated to the Commonwealth wallet.
The Mint (Master/Vassal Nodes) – Decentralized “artificial” nodes that recieve newly created coins.
The Gold Mine – A multipool, where locked coins can be earned by users. These coins are backed by gold, and fees from the multipool are collected and reallocated to the Commonwealth wallet.
The Common Wealth Wallet – Receives XAU and uses it to increase the Xaurum gold reserves.
Melting – Exchanging Xaurum for physical gold, that will be sent to your home address
Xaurum was created with a 10 Million (1,000,000) pre mined coin supply. 90% of these coins are kept by the Guardian Nodes and do not enter circulation. The remaining 10% are kept liquid and are backed by gold once they are received by new users in a “simulated” mining process.
1016 XAU were sold in the first ICO, and the proceeds gathered from this initial coin offering were used to purchase 1016 grams of gold. The remaining 998,984 coins out of the 10% that enters circulation, were not backed by gold and were instead locked. This is where the Gold Mine comes in. The Gold Mine is a place where users can mine Proof of Work (PoW) cryptocurrencies and be rewarded with gold backed Xaurum.
By operating a Multipool, not only does Xaurum acquire the necessary income to back the newly “unlocked” coins with gold (by exchanging the crypto assets mined by the users for gold), but it also acquires revenue from pool fees that are then exchanged for Xaurum and reallocated to the Commonwealth wallet.
In this case, the Goldmine does not create inflation, it simply releases coins that were previously locked into circulation and backs them with gold from the revenue generated by the multipool. Once all the Xaurum coins were artificially mined, there would be about 1 million XAU into circulation and about 9 million XAU stored within the Guardian Nodes.
Since inflation was necessary to secure the blockchain with the PoS 2.0 protocol, Xaurum has a 0.01% yearly issuance rate. Since the Guardian Nodes hold 90% of the coin supply, 90% of the inflation was kept within the Guardian Nodes and staked continuously. The other 10% are released into circulation for the Master/Vassal Nodes . 90% of all transaction fees, which are already backed by gold since they come from the supply that’s already in circulation, are sent to the Commonwealth wallet.
The Master/Vassal Nodes are regular users that can stake Xaurum in the “Mint”. In order to mint new Xaurum, users are required to send a fiat deposit to the Auresco Insitute to pay for the gold backing the new XAU. These Master/Vassal Nodes are required to have a 1000 XAU balance to ensure that their interests are aligned with Xaurum’s.
The Commonwealth wallet, as we’ve seen, receives only gold backed XAU from the GoldMine profits and from the TX fees earned, and it is a sole purpose is to increase the Xaurum gold reserves, that are managed by the Auresco Institute, a non-profit organization that maintains, acquires and delivers the gold that backs Xaurum, host the Guardian Nodes and manages the Commonwealth wallet.
The last piece in the Xaurum puzzle is the Melting function, that allows users to have physical gold delivered to their home address in exchange for gold backed Xaurum. The exchanged XAU returns to the locked balance to be, once more, backed by gold on the multipool or Goldmine.
Since Xaurum functions as a store of value, its PoS protocol and inflation are an unnecessary feature that incurs in extra costs. By moving to a smart contract and token system built on Ethereum, Xaurum will not have a need for its own Blockchain, thus Guardian nodes will be removed from the equation, meaning that all the new Xaurum that is released via smart contracts will be done so through the Goldmine and through the minting process, which will allow the gold reserve to raise at a higher pace, while the XAUR supply itself remains static.
All proceeds from the GoldMine are either used to buy gold to back newly unlocked Xaurum or to buy Xaurum from an exchange market that is then sent to the users that are contributing their hashrate on the GoldMine multipool.
In order to allow Xaurum to be more user-friendly and to facilitate its adoption, Xaurum will be splitting its supply into 8000, meaning that every XAU (old PoS blockchain coins) will be exchangeable for 8000 XAUR (New Ethereum based tokens) and the gold backing 1 XAU will be the same that backs 8000 XAUR.
In this RICO period, the Minting process was available to anyone for a discount meaning that no XAU was necessary to create new coins, that will be credited to users as tokens on the Ethereum Blockchain. The money collected during the ICO will be used to back all the newly created XAUR tokens.
Xaurum has, since its inception in February 2015, increased its gold reserves from 1g of gold to 2.2624g of gold per XAU, and it’s value has increased over 290%, meaning that Xaurum is not only backed by gold, it’s also backed by its own lucrative business model that allows the gold reserves to pile up.