A common question for any tokenized product is how to balance the need for people to have a token to use the product and the need for the token price to also appreciate. When you have high velocity, that means the token turns over too much and never lets the token value increase.

BLZ is a utility token for using the Bluzelle decentralized database service. It needs to be widely available and easily attainable so developers can use the service. Below are three ways we aim to manage velocity. The basis for this was taken from Kyle Samani’s excellent write-up.

Stake is used to enforce proof of storage

One role in the Bluzelle network is that of the producer. Recall that this data is sharded, replicated and stored on nodes all over the world. The producer offers their hardware to be a node. To ensure that the producer performs at the level we want, we require them to put up a stake in our tokens. If they don’t perform, then that stake can be taken from them either partially or wholly and handed to the network and/or to the customer. The stake is a strong economic incentivization for producers to perform and to behave.

Network utility expansion mechanism

Bluzelle will have a fixed token supply. Owning a token gives access to a set amount of the capacity of the total Bluzelle Network. As Kyle fantastically explains:

“Over time, if a protocol is successful, the capacity of these networks will grow as more people seek profits and rent out underutilized assets. Therefore, each token will be able to purchase a larger absolute amount of total compute power / disk space. Although price per CPU cycle and KB are always falling, markets have generally shown an appetite for ever increasing amounts of both. It’s therefore likely that those who own access to these networks will hold their tokens, reducing velocity.”

Becoming a cryptocurrency

Databases are a fundamental need of all software. So there will always be a demand for Bluzelle. Our producers who host data on their hardware are highly likely to play a dual role where they also use the Bluzelle database for their own needs. As a result, these producers will hold onto some or all of the tokens they earn so they can use them later. Additionally, if the producers also use other complementary pieces of the decentralized internet, they might trade Bluzelle tokens with the tokens of other infrastructure products.

Building a decentralized database and doing an ICO is no easy task. You are really managing two products and they aren’t mutually exclusive. As we see over 20 Billion connected devices coming in the near future, there will be an increased need for Bluzelle to store and manage their data. That will lead to increased demand for BLZ as a token.