Premine and initial masternodes

In the current situation significant amounts of hashrate can be rented and applied to any X11 network. From our point of view that is a source of risk of a potential 51% double-spend attack. We wish to secure the Osmium network from the start so we shall create a decentralised layer of initial masternodes at mainnet launch.

We have therefore decided to pre-mine 8000 OSMI which represents roughly 0.66% of our maximum supply. We understand that premines are generally frowned upon as they could be misused by project founders. But rest-assured, most of these coins shall be immediately allocated to form the collateral of initial masternodes and exchange listing liquidity. Initial masternode collateral will be sold over-the-counter during the initial phase of the project. Since the masternode layer must be decentralised we shall limit the pre-sale to a maximum of one masternode per person.

In order to initiate the required masternode quorums correctly we shall set up all pre-sold masternodes by ourselves at the same time. This shall ensure the most fair distribution of initial masternode rewards and proper function of the chain. Once quorums are established we shall transfer the masternode collaterals to their respective holders. This process will be fully transparent and communicated in our Discord.

This step may seem unnecessary to some but we are fully aware of the fact that the vast majority of X11 forks do not have functioning masternode quorums and chainlocks. In such situations the network does not ban inactive masternodes and the entire masternode layer has zero value for the chain. Such networks are more vulnerable to 51% attacks.

Such a strict limit on the premine amount has one negative side effect – funds for various listing fees will become available to the team over time. Although we expect to fund some of the listing fees from our own investment fund, we shall need developer fees and potentially community fund-raising to be able to afford more expensive listings.

We are certain that this additional level of security for our investors outweighs a slower pace of listings. We believe that going forward, gradual and organic growth will benefit the entire community.