It is more profitable to immediately burn to LV2, hold all LV1 generated until the ROI is achieved, them burn another one.
You then ride the profit from the first LV2 coin and make additional profit from the newly created LV2 coin.
The rate of decay is 1,000 in a year, 1500 in two years, 1750 in three years, 1875 in four, and so on.
This does not factor in coins generated from the LV1 made.
Are you assuming that an account has only 1000 LV1 or does the "hold all LV1 generated until
the ROI is achieved" point also works best with more than 1000 LV1?
If you are a guy who invested 1BTC then you have 150000 LV1 and if you burn all immediate you have 150 LV2 which will give him 1000 LV1 after a few days. If I read this quote right then you are recommending that this guy hold them for a year. If I understood you right, then I dont get the point why he should not burn the next LV1 as fast as he can.
It is a good a question. This is how it works. First, it will be very difficult to have multiple wallets to cheat the system. I will be creating personalized wallets for everyone. But even then it is very difficult. Say you had 10,000 level 1 coins that were 1 year old and you never burned them. Now lets say you sold those level 1 coins on an exchange, and bought 10,000 level 1 coins from the exchange. The wallet remembers this transaction and sets the coins you just purchased to 1 year old. If you bought 20,000 level 1 coin on the exchange, then you will have 10,000 1 year old coins and 10,000 fresh coins. I am calling this "average age debt". I've said it numerous times, if you don't balance burning with selling, then you won't be efficient. Both burning and selling on exchanges helps the ecosystem to flourish and has significant benefits over hoarding level 1 coins.
If you plan to make personalized wallets whats with anonymity and security of the participants in the network?
Do you have any ideas to make wallets created anonymous or have them on paper or something similar save for the future?