Two Months After the Spring Halving, The Hashpower Distribution Returns to Normal
Miners can choose which Seasonal Token to mine. The total amount of hashpower devoted to mining each token depends on the decisions of large numbers of miners acting independently, with each miner seeking to maximize the income they receive. The difficulty adjustment mechanism ensures that, no matter how much hashpower is directed towards a token, the rate of production stays constant. This makes it attractive for miners to choose the token with the lowest hashrate, because they’ll get a bigger share of the tokens produced.
If too many miners mine one token, the difficulty of mining that token increases, making it profitable to switch to a different token that’s easier to mine. Over time, this tends to result in a uniform distribution of mining power, with each token having approximately the same total hashrate as the others.
This works well when the four different tokens are equally profitable to mine, but after a halving, the situation changes. When the Spring halving took place on the 5th of June, the cost of producing Spring tokens doubled, but the price didn’t instantly double. Mining Spring immediately became unprofitable.
As a result, many miners stopped mining Spring. The hashrate fell drastically. A miner would need to get twice as many mining rewards to get the same number of tokens as before, because each reward contained half as many tokens. With the Spring price still as low as it was before the halving, miners needed to double their share of the new tokens produced to earn the same amount as they previously did.
With the hashrate falling, though, the difficulty of mining Spring also fell. Eventually, it became half as difficult to get a Spring mining reward as it had previously been. When that happened, mining Spring became profitable again. There were half as many Spring tokens produced, but there were also half as many miners receiving those tokens.
The effect on the hashpower distribution is visible in the charts above. Two weeks after the halving, Spring had a significantly lower hashrate than the other tokens. Most of the miners who switched from Spring chose Winter instead, resulting in a distribution that was no longer uniform. The still-low price of Spring forced the Spring hashrate to remain far below the others.
Since then, the price of Spring has increased in comparison to the other tokens. Spring is currently close to the price of Autumn, and Summer is now the cheapest token. This has made mining Spring more profitable, and miners have switched back to Spring. Even though they get fewer tokens than they did before the halving, those tokens are almost twice as valuable as they were relative to the other tokens.
The distribution of hashpower among the tokens has become close to uniform again. The disruption caused by the halving was temporary, because the token economy has the ability to adapt. Miners, investors, and the difficulty, all react to changes in economic conditions, and the result is a system that gradually returns to its normal equilibrium after a shock like the halving disturbs it.
Miners seeking to maximize their profits, all acting independently of each other, exert a powerful adaptive force that maintains the stability of the system. Seasonal Tokens is the first project to use multiple proof-of-work tokens to create an economy in which mining power can shift from one token to another, and the efficient response of the miners to the first halving has shown that multi-token economies are adaptive and resilient.
