Consider any cryptocurrency network currently in circulation; every such network has a singular native digital token.
For example, Bitcoin Network has BTC, Ethereum Network has ETH, and likewise, each network has its digital currency. Therefore, it is essential to understand why Jax.Network is one of the few networks that has two types of coins in circulation.
The two coins in circulation with the Jax. Network are called the JAX coin and the JAXNET (JXN) coin. Both of these coins work differently, but the mining reward functions of both lead to the stability of the network.
The JAXNET (JXN) coin
The JXN coin operates on the beacon chain and miners who mine this chain will receive their reward in JXN coins. The mining of this coin is more like mining a Bitcoin, i.e., each user will get his or her fixed rewards of 20 JAXNET coins. However, there is no maximum coin supply, just like in Ethereum.
The miner will receive 20 JXN coins for each block he or she mines. A block takes about 10 minutes to mine.
The beacon chain of the Jax.Network is responsible for the creation of new shards. Think of a beacon chain as a coordinating mechanism for the Jax.Network. It helps to create new blocks, ensures they are valid, and rewards miners with JXN coins. These new blocks will advertise whether or not a new shard, or parallel chain, has been created.
The JAX coin
Miners get JAX coins as rewards when they successfully mine a shard on the Jax.Network. The coins are responsible for the scalability of the Jax.Network as these coins are exclusively used in day-to-day transactions.
Compared to the JXN coins, the JAX coins are mined on the shard chain of the Jax.Network. This is important because it is the backbone of the entire Jax.Network. The block reward mechanism is also entirely different, as it is proportional to the aggregate hashrate on the network. For simplicity, let’s use a not 100% accurate but easy example. If I have 1000 of hashrate, I will receive 100 JAX coins. This ensures that each shard is mathematically equal so users should be indifferent by using shard A or B as their exchange rate will always be 1:1. Besides, the proportional block reward allows JAX to follow a stable cost of production, which is based on electricity. This is very important since if the marginal cost of production is stable over time, this means that the network ensures stability of the coin price in exchanges as well. If the coin price goes above a certain price level, more coins will be printed by miners, therefore the price will return to its initial value.
Impacts and consequences on the Jax.Network
The two coins greatly impact the scalability, security, and adoption rate of the Jax.Network.
JXN coins are speculative and this causes them to behave more or less like Bitcoin, which means that the coins can be a reliable asset and a store of value. JXN coins are not made for day-to-day payments because they are stores of value. With the increase in adoption, their value will grow over time. You can see them as your savings account.
JAX coins are suitable for day-to-day transactions. The concept of sharding and the implementation of merged mining make Jax.Network scalable and secure. For this reason, it can be said that the JAX coins will see an increase in adoption with time. As the adoption increases, so will the mining, and in this case, the reward function is proportional to the computational efforts that the miner puts in, increasing his or her reward.
Similarly, when the demands decrease, the rewards will decrease, too. Miners are profit oriented and will put less effort allocating computing power since the market price will go down. The entire network is decentralized, i.e., the coins will be minted in line with demand.
Conclusion: The need for 2 coins
It can be concluded that the JXN coins are the store of value and the JAX coins are present for day-to-day usage. Looking at the bigger picture, the Jax.Network is fully equipped with great features and is entirely decentralized. JXN coins will grow in value whereas, JAX coins make the network more scalable and stable with time.
With the launch of JAX coins and the Jax.Network, the life of stablecoins will be phased out. You have JXN coins, which you can store, and JAX coins, which you can exchange with any vendor or merchant on a daily basis.