# How it works

Intro


CryptoArena introduces new terminology and innovative concepts, trying to _push the envelope_ of the currently (more or less) established standards, in what is already a groundbreaking industry.

#### We understand it can get confusing.&#x20;

This plain language section is meant to help further explain, step by step, all the pieces that compose the core mechanism enabling our unique proposition: the “**Self-Decentralization Process**”, and most importantly, what it all means for you.

Check [**Technology** ](../technology/architecture)if that's what you're looking for.

## In a Nutshell

Self-Decentralization is the process by which CryptoArena increasingly becomes a 100% non-profit over time, and consequently, distributes incrementally larger shares of platform generated revenue to its users.

Our Mission, and the processes designed to deliver it, are permanent, immutable & secured through extensive use of [**smart contracts**](../technology/architecture/smart-contracts).

## **Disambiguations & Terminology**

#### It's a Process

Meaning it features a “**start state**”, an “**end state**”, and a pre-set framework of rules and activities determining “**change**”, to go from former to latter.

#### achieving Self-Decentralization&#x20;

Means progressing until reaching what we refer to the “end state”, achieved through the completion of the  “process” defined above.

#### What we “decentralize”&#x20;

Is the [**ownership**](the-dream) of the holding entity of the company operating the network, business & platform, and therefore, claims on its assets, profits, and so on. Founders & investors too. **No exceptions**. Hence “self”.

### **Key Components**

A **Sidechain** is a blockchain built as an added layer of another blockchain, featuring own rules and assets, while benefitting from the mainchain’s features and selling points too.&#x20;

CryptoArena uses an advanced kind of sidechain, specialized for the Polkadot ecosystem, known as a **Parachain** ("Parallel Blockchain").

#### A Parachain

Is an application-specific data structure that is globally coherent and validatable by the validators of the Polkadot **Relay Chain.**&#x20;

As suggested by the name, they are able to parallelize transaction processing, rather than operating them sequentially, thus achieving the greater scalability of the Polkadot system. They [**share in the security**](https://wiki.polkadot.network/docs/en/learn-security) of the entire Polkadot network and can communicate with other parachains through [**XCMP**](https://wiki.polkadot.network/docs/en/learn-crosschain).&#x20;

![Learn more on Wiki.Polkadot.Network](https://3298173338-files.gitbook.io/~/files/v0/b/gitbook-legacy-files/o/assets%2F-MQwWZOu4BVfktUx1sVY%2F-MUD_4V338TH9gO4W6xL%2F-MUELodHp_aEgpKE1CIF%2Fimage.png?alt=media\&token=f7512b2e-499d-471f-8671-d8e94cfe7c76)



Learn more about **parachains** [**here**](https://wiki.polkadot.network/docs/en/learn-parachains). The Relay Chain is the backbone of the **Polkadot network**, more [**here**](../technology/why-polkadot).

#### **ARENA Security** **Tokens**&#x20;

Our custom [**Security Token**](../../technology/foundational-concepts/crypto-assets-categories#security-tokens) used for three purposes, among which, most importantl&#x79;**,** acting as “**beacon**” to our systems, **for primary distributions** (of revenue).

Learn more about **ARENA Tokens** [**here**](../security-tokens)

#### The **Glory System**

Is a competitive, game-like, points scoring system that **regulates secondary distributions** (of revenue). **Bigger score -> bigger share**. All Users automatically earn points through all fee-bearing activity on CryptoArena’s platform, and thus benefit from distributions. No opt-in is required.

#### The **BuyBack Bonus** **( "BBB" )**

Is an **extra revenue stream** provided as compensation to Shareholders for the value of their pre-emptive consensus to the _self-decentralization process_. . **Only ARENA Security Token Holders** have claims on [_**BuyBack Bonus**_](how-it-works/bbb) funds. Consensus is a hard requirement to access our tokens for everyone, including investors, founders & staff.

#### Not a "burning" mechanism

[**PoRD**](../technology/consensus/pord-code) is a custom flavor [**PoA** ](../technology/foundational-concepts/poa)featuring a similar, but fundamentally different, mechanism to a [**PoB**](../technology/foundational-concepts/pob), because tokens are not destroyed or locked & forgotten. The [**BBB** ](how-it-works/bbb)is a repurchase of shares (at a premium) by the operating non-profit, and the shares are automatically and immediately allocated to general revenue distributions as a consequence of this transaction.

In practical terms, completing “self-decentralization” means allocating all outstanding shares, sold previously to raise funds for development & operations, to public revenue distributions.

#### Various **Smart Contracts**&#x20;

Are utilized to automate and enforce terms, payment procedures, inner processes, governance and also interactions between Users in our [**advanced copy trading**](../basics/services/patrons-and-champions) solution.&#x20;
