The TEA Token Model: How Does the Business Support Value / Price?

The TEA Project Token Model

The TEA Project has two types of tokens:

  1. The TEA token is a utility token used to pay for computing fuel. Its value is pegged to the consumption of computing resources; consuming a TEA token will always result in a fixed consumption of computing services (CPU time, network traffic, and storage).
  2. CML (Camellia) is an NFT, a necessary scarce resource needed to participate in TEA project mining. This NFT records various attributes of a TEA node, including processing capacity, credit history, life cycle, etc. CML has a life cycle — from seed germination and growth to eventually aging and withering away. CML is a token with investment value and scarcity.

CML needs to be planted on the mining machine to generate income; this process is called T mining. Earned T can be used to bid for seeds to expand production or invest in other CMLs for passive income. CML seeds can also be sold through trading.

CML (including seeds) can be traded, and these transactions help establish its price. Since the token represents the ability to pick TEA, it can be used as the basis for credit loans. This can be an attractive option compared to the over-collateralized loan requirements typical of Defi. Using CML to take out loans collateralizes its future income potential to obtain current income in the TEA ecosystem.

Is it Necessary to Solve These Needs Through Blockchain / Tokens?

On the centralized Internet, big companies profit from user data mainly by providing free services. They use these profits to build giant centralized cloud computing centers that provide computing power services for other small and medium-sized Internet companies. Cloud Computing is already the main source of income for several major Internet giants.

If centralized cloud computing would instead be dispersed through general crypto miners, the most immediate need is to pay service fees to offset the miners’ operating costs. In order to achieve the anonymity and privacy protection of the Internet, a payment system that does not restrict anonymity by country or region is the best choice. Therefore, blockchain tokens are the best option.

Web3 is a long-term and ambitious goal requiring long-term investment and huge capital support. Due to the nature of decentralization, it is unlikely to be organized and supported by companies or governments. Therefore, it can only raise funds to support development and deployment through decentralized finance markets.

How Will the Market Demand Support Token Value in the Long Run?

The values of TEA and CML will need to be supported by businesses needing decentralized cloud computing. TEA can provide oracle price feed services as well as cloud computing services for traditional Internet customers.

However, high levels of demand for trusted cloud computing services may take a long time to develop. Both IPFS, which has been running for many years and Dfinity’s recent entry, ICP, are still waiting for the advent of the Web3 era. Before this era comes, everyone needs to rely on the miner economy to incentivize development in these nascent Web3 projects.

How Does the Miners’ Economy Support Token Prices in the Short Term?

The inherent design of TEA’s miner economy is the same as those providing token price support for FIL, CHIA, and ICP. In the token design of the TEA Project, the miners’ FOMO is specifically accounted for in the token design of the TEA project. For example:

It takes time for CML to germinate and grow from seeds. There is a natural life cycle for CML seeds to grow into a full-bodied tree. A CML tree early in its life stage will not be as productive as a mature tree. This natural life cycle prevents a large number of CML-enabled TEA mining machines from being fully-productive at the initial stage. This helps prevent these machines from producing a large amount of T tokens that would have flooded the system and created sell-off pressure.

CML and seeds are scarce resources. They need to be obtained through auctions. Auctions consume (burn) TEA tokens. As CML matures, its price and value will increase. Because of this, the investment of buying seeds and cultivating them will allow early investors to gain an advantage versus future market entrants.

The TEA token in its free-flowing state cannot be used for voting or gaining value through staking. It’s similar to storing cash at home and dealing with its inevitable depreciation. Investing TEA in CML will help maintain and increase its value, similar to purchasing stocks using cash.

Mining T With CML Incentivizes

The return for investing in CML depends on the position at which the investor entered. A wise investor should grab the bottom slot with their CML for the highest early-stage mining return. Once invested, the system disincentivizes investors moving out their funds as others would jump in to occupy these valuable bottom positions. This design implies that the investment position is also a scarce resource and encourages a long-term stable investment lock-up.

Miners will need time to develop their TEA mining skills. These T farmers must learn these skills while paying for mining machines in an effort to mine T. These early adopters might instead choose to put their harvested TEA into staking or investing them in special projects. These are further supply pressure help the T token achieve an early level of scarcity. The lack of sell-off pressure helps the TEA maintain its market value. Early-stage investors support the TEA price, and a virtuous circle of investment, staking, and T mining can be formed. The TEA and CML for sale on the market will always be in a state of scarcity and have insufficient supply to maintain a positive FOMO cycle.

To learn more about how the TEA Project miners, developers, and curators all support the TEA token price, watch the following video to explore the TEA economy ecosystem: