One of the main things that we get asked about is how Altrucoin and Altruvaults work together. Many holders have been worried that there is a split, and now Altrucoin will somehow become irrelevant or inferior to the Altruvault token. This is not the case, and the team knows that the two tokens will work hand in hand to strengthen each other.
In the first part of this, we will look at how Altrucoin and Altruvault work with each other. Further down, we will look at the benefits of Altrucoin and why people will continue to want to invest in Altrucoin even after the Altruvault token is released.
What is each token?
Firstly, let’s look at how the Altrucoin token and Altruvaults application work together. I will be using a few analogies to help explain the point, but please keep in mind these are not perfect analogies, and there are flaws in them that do not extend to the actual relationship between Altrucoin and Altruvaults.
Altrucoin is a token focused around charitable donations and a Decentralized Financial Lending use case (DeFi Lending). It is currently in the development stage, with governance and staking being released. However, the ultimate use case for it is for use as a token in DeFi lending. This has been the case since the beginning, and can be found on the website, roadmap, and whitepaper for Altrucoin.
Altruvaults is an application meant to bring DeFi features to other tokens. This includes staking, multiple token type redistribution, trustless DeFi lending, and token launching. Altruvault is the native token for the Altruvaults application, with the long term use case being store of value from holding and a base for the Altruvaults application.
How do they interact?
So how do they work together? This is where the first analogy comes in. Imagine that you have a cool idea for an engine. There are two ways that you could go about creating the engine. The first is to go straight to a manufacturer and order 20 million of them to be made. When they ask for the design plans, you send them a paragraph on how it might look. The second way is to carefully think about how an engine works, get a rough sketch, create a full diagram, make the prototype, get community feedback on how the mechanisms work, test it, fix the issues, and finally submit it to the manufacturer.
In the first scenario, the manufacturer is going to create a broken product and pump it out to millions of people, wasting time and money. In the second scenario, the manufacturer can create a good, well rounded, tested product that everybody is happy with.
If you tried to take the 20 million broken engines and fix them then create the new version, it would be a clunky and wasteful process. It is incredibly important to be able to work with designs on a scale that is made for changes and agile. Altrucoin works much in the same way. Without Altrucoin, the Altruvaults system would have to roll out massive changes with limited feedback, and constantly make changes on a large scale. Altrucoin is the perfect token to be able to take new features, allow the community to test them, collect feedback and make changes, and ensure that features are viable and worthwhile to token holders.
However, this is where the analogy does fully fit reality. In the above example, the prototype would not have any real use after the manufacturer released the engine. Altrucoin, on the other hand, has two main advantages that extend beyond the release — exclusivity and separate use case.
Benefits of Altrucoin
When a new feature is added for Altrucoin that could benefit other tokens through Altruvaults, holders might feel like they are just guinea pigs. If the feature is valuable and could make sense on a large scale, it might be added to Altruvaults. However, Altrucoin holders will be the ones that shape the feature, and will have that feature for weeks, months, or possibly years before anybody else. As we see every day, as soon as something is launched, it is possible for somebody to take that code and make a copy of it. We see new tokens launched every day that are just copy-pasted versions of other tokens. But holders aren’t interested in the copy-pasted version. They want the original token. Altrucoin holders will exclusively have the feature while the Altruvaults system takes time to figure out how the feature can be scaled and rolled out. Even without Altruvaults, people would take the new feature and apply it to new projects. But Altrucoin holders will be the ones that have had it from the start, the ones on the leading edge of new features.
While an engine prototype might not have a use after the manufactured model is made, Altrucoin has a strong use case outside of anything to do with Altruvaults — DeFi Lending. As mentioned above, Altrucoin and Altruvault tokens have different use cases. This becomes even more apparent when we look at the tokenomics of each coin.
Altrucoin will be used for DeFi Lending, meaning that it will have transactions happening with some amount of regularity. Currently, transactions are limited and long term holders are rewarded. Both of these are reflected in the tokenomics. There is a 10% fee on every transaction currently, to encourage holding while the DeFi Lending is developed. As laid out in the whitepaper, this transaction fee will decrease when lending is released to facilitate low-fee transactions. Coin holders will transition from reflections being their primary source of token growth to lending interest being the primary source.
The Altruvault token will be used for store of wealth in holding and as the native token of the Altruvaults application. This is also reflected in the tokenomics. Altruvaults is not meant to be used for high frequency trading, but rather to reward long term holders. This is why there are significantly higher fees for transactions. While the Altruvault token is the native token of an application that helps others add DeFi features to their token, the Altruvault token is not meant to be used itself for DeFi Lending.
We believe this is one of the main areas of confusion. On first glance, many holders believe that the Altruvault token will do everything that the Altrucoin token will do and more. While they both play a vital part in the Altruvaults application, they have different use cases.
So why would somebody invest in Altrucoin even after the Altruvault token launches? Two reasons: to be on the cutting edge of technology, and to use a token for DeFi Lending. Have questions? Come join our Telegram and Discord communities and we’re happy to answer them!