HoloFuel
= "HoloFuel is Holo's native, asset-backed, mutual-credit currency". [1]
URL = https://holo.host/faq/what-is-holo-fuel/
Definition
Holo:
"HoloFuel is a Holochain-based currency that is a contractual service obligation, redeemable for hosting. HoloFuel is a mutual-credit accounting system capable of performing billions of daily microtransactions. Its primary use is for Holochain application (hApp) providers to pay Holo hosts for their services."
(https://holo.host/faq/what-is-holo-fuel/)
Description
1. Holo:
"HoloFuel marks the beginning of a new era of cryptocurrencies backed by the capacity provided by people. All of the currency supply is correlated to building and providing the computing power of the Holo network. We always create that value together.
Most cryptocurrencies are modeled as digital objects tracked on a global ledger. With HoloFuel, each user has their own ledger showing their account balance and transaction history. Each transaction requires an agreement between two people, which is then recorded on their respective ledgers and validated by peers in the network.
Mutual credit means that every credit (positive) has an equally matching debit (negative), giving a net supply of zero and a dynamic circulating supply that’s responsive to the actual market behavior of its users.
Credit limits are directly connected to a demonstrated capacity to repay a negative balance by providing hosting resources. HoloFuel is directly redeemable for hosting services. HoloFuel is therefore backed by computing power, a valuable modern asset.
Being asset-backed and having a dynamic supply means that HoloFuel can be value-stable without being static or requiring a peg. HoloFuel can optimize the market value of its units in relation to the cost of hosting, creating a steady and stable trajectory.
The agent-centric design allows for the transactions per second (TPS) to increase the more people use it, mirroring how the English language’s “words per second” increases as more people speak it. Therefore, HoloFuel is scalable for mass adoption.
There is no mining or staking involved in earning HoloFuel—only the useful work of web hosting. Anyone can become a host and be compensated by application providers who want their hApp served to the web."
(https://holo.host/faq/what-is-holo-fuel/)
2. Cameron Burgess:
"Most cryptocurrency tokens exist in a speculative demand cycle: people buy them because they expect others to buy them at higher prices later. Demand increases when price increases, collapses when price falls, and is structurally disconnected from whether the underlying project delivers anything useful. The Economist’s observation that crypto is “a speculative asset class with no fundamental value or income-generating potential” accurately describes this dynamic (see note 8). It’s not a criticism of decentralised systems as a concept. It’s a description of how most decentralised systems are built.
HoloFuel is different in kind because its demand derives from use, not speculation. Hosts earn HoloFuel providing compute and spend it acquiring services. Publishers spend it on hosting capacity. Projects that adopt HoloFuel as their native currency create communities that transact in it for real goods and services. This is demand rooted in economic activity that exists regardless of what speculators think HoloFuel is worth. The credit mechanism itself does not produce appreciation: when demand rises, credit limits expand and supply meets it, rather than units becoming scarcer. This describes how the currency works internally. It is not a claim that no rate will ever exist between HoloFuel and anything else. HoloFuel is self-custodial, and what people agree between themselves is their own business.
That is what utility demand looks like. It’s the demand structure of useful infrastructure — and it’s what the speculative token model, almost without exception, was not.
HoloFuel is also a poor vehicle for speculation, by design. The mutual credit structure — net supply always zero, credit limits tied to productive output, no one selling it — resists the price dynamics that make speculative tokens attractive to traders.
Conventional token metrics — fixed supply, market capitalisation, circulating supply ratios — are artefacts of the speculative model. They don’t apply to a mutual credit currency whose supply expands and contracts with real economic activity and whose value was never fixed to a particular asset. Evaluating HoloFuel by those metrics is like valuing a current account by the logic of a commodity futures contract.
The network economics compound. Each additional token joining the Decent Marketplace — should we move to launch — costs O(1) to add one oracle feed. But for everyone already in it, a new token adds one more exchange destination — so each arrival makes the network more valuable to all the rest as it grows. And liquidity concentrates rather than fragments: in a trading pair model, each new token draws liquidity away from existing pools; in a clearinghouse, all liquidity is available to all participants through the common settlement layer."
(https://decent.holoventures.io/07-the-economics-of-utility-vs-speculation/)
Characteristics
"HoloFuel benefits:
- A completely peer-to-peer cryptocurrency.
- Optimized for high speed and minimal fees.
- Currency you earn for hosting on Holo, and redeem to pay your bills.
- Completely accountable and transparent crypto-accounting, operating by known and shared rules running on every host machine.
* How is HoloFuel different?
- Mutual Credit: Unlike other cryptocurrencies which are primarily used for speculation, HoloFuel is not tokens created from nothing. It is a double-entry crypto-accounting framework in which units are created, transferred, or destroyed at transaction time.
- Asset-Backed: HoloFuel is backed by the computing power of hosts like you across the globe. That means it can be redeemed for a product with real utility.
- Value-Stable: The value of HoloFuel is connected to the computing capacity of the network of hosts. This capacity evolves and changes slowly and isn't subject to huge spikes and crashes the way other speculative tokens are.
- Scalable: HoloFuel is designed for micro-transactions, which means it needs to support millions of global value exchanges per second at fractional values. This is possible thanks to Holochain's massively parallel design."
(https://holo.host/faq/what-is-holo-fuel/)
Status
Cameron Burgess:
What’s changed since 2017 is the scope. HoloFuel was designed as a currency for distributed hosting. Given the added layer of Unyt, it’s now a more inclusive utility currency that any values-aligned project can adopt instead of launching their own speculative token. This matters because the overhead of token issuance is enormous: legal analysis in every jurisdiction, exchange negotiations, market-making, tokenomics management, governance of the token separate from governance of the project, and a speculator community whose interests may actively conflict with the project’s actual users. A project building on Holochain can use HoloFuel as its native currency without any of that."