The blockchain firm Bloq on Tuesday said it has created a rival to bitcoin called Metronome that will go on sale in December.
The announcement is significant because the founders of Bloq are longtime fixtures in the world of bitcoin, and are claiming that Metronome addresses flaws in how the original crypto-currency, which is now worth around $100 billion, is created and distributed.
“Today, bitcoin faces existential threats from forks, developer drama and so on. Knowing what we know and having a clean sheet of paper, we asked what what would we build and the answer is this,” Jeff Garzik, CEO of Bloq and a longtime bitcoin developer, told Fortune by phone.
One of the features that distinguish Metronome from bitcoin is it will be sold in a series of auctions. This is different from many other digital currencies, which rely on miners who use large amounts of computer power to extract “coins” and make them available for public use.
The initial Metronome sale will take place over several days and will entail a reverse auction in which the initial price will be set very high--probably $500 says Garzik--and then drop until it meets market demand.
According to Matthew Roszak, a co-founder of Bloq and a longtime bitcoin investor, the reverse auction process will give a broad number of people a chance to own Metronomes, and will prevent people with deep-pockets taking outsize positions in the currency.
Here are some more details about how the auction process from the Metronome (MTN) announcement:
Upon launch, an initial supply of 10 million MTN tokens will be issued, with 8 million MTN tokens sold in a descending price auction ("DPA") for Ethereum's ether currency (ETH). Each day thereafter, new MTN tokens will be sold in a DPA at the rate that is the greater of 2,880 MTN per day, or an annual rate equal to 2.0000% of the then outstanding supply per year, providing a predictable supply over time. 100 percent of the ETH proceeds from the initial and daily auctions will remain within the Metronome smart contract system to provide liquidity to the MTN marketplace. Bloq will retain a 2 million MTN author retention, and will not receive any ETH proceeds from the auctions.
Note that Bloq will keep 2 million units from the original sale, which the company says will go to supporting the new currency. In all of the subsequent daily auctions, Metronome’s protocol calls for the proceeds to be disbursed in an automated fashion under the terms of a smart contract.
Remarkably, such smart contracts will also determine the entire future course of Metronome, and will not be subject to human overrides.