Economic Model & Tokenomics¶

ComputeChain uses a carefully designed economic model that balances security, decentralization, and sustainability.

Overview¶

Token: CPC (ComputeChain Coin) Decimals: 18 Genesis Supply: 1,000,000,000 CPC (devnet) Max Supply: Infinite (with halving) Consensus: Multi-validator PoA (transitioning to PoC)

Emission Model¶

Block Rewards¶

ComputeChain uses a halving-based emission model similar to Bitcoin:

Initial Block Reward: 10 CPC
Halving Period: Every 1,000,000 blocks
Formula: reward = initial_reward >> halvings

Inflation Schedule (Devnet @ 10s block time):

Period	Blocks	Block Reward	Annual Inflation
Year 1	0 - 999,999	10 CPC	~3.15%
Year 2+	1M - 1.99M	5 CPC	~1.58%
Year 4+	2M - 2.99M	2.5 CPC	~0.79%
...	...	...	Decreasing

Total Supply (asymptotic): - Genesis: 1,000,000,000 CPC - Total minted over time: ~42M CPC (asymptotic) - Max theoretical supply: ~1,042,000,000 CPC

Block Reward Distribution¶

Each block reward is split between different network participants:

Block Reward: 10 CPC (initial)
├─ 70% (7 CPC)   → Validator Pool
└─ 30% (3 CPC)   → Miner Pool (PoC Workers)

Validator Pool (70%)¶

Distributed to the block producer (validator who created the block).

If validator has delegations: - Commission: Validator takes commission % (max 20%) - Delegator Rewards: Remaining amount distributed proportionally to delegators - Dust: Any remainder from integer division is burned

If no delegations: - Validator receives entire pool

Example:

Block reward: 10 CPC
Validator pool: 7 CPC
Validator commission: 10%

Commission: 0.7 CPC → Validator
Delegator pool: 6.3 CPC → Distributed proportionally

Miner Pool (30%)¶

Distributed to PoC (Proof-of-Compute) workers who submit valid computation results.

Distribution: - Proportional to miner weight - Weight calculated off-chain: weight = results * gpu_tier * uptime * difficulty * reputation - Verified on-chain via ZK proof

Status: Infrastructure ready, awaiting Phase 2A PoC implementation. Until then, unused miner pool is burned.

Transaction Fees¶

Transaction fees are distributed as follows:

Total Fees = gas_used * gas_price

├─ 90% → Block Producer (Validator)
├─ 10% → Treasury (Community Pool)
└─ Dust → Burned

Fee Structure:

Transaction Type	Base Gas Cost
TRANSFER	21,000
STAKE	40,000
UNSTAKE	40,000
DELEGATE	35,000
UNDELEGATE	35,000
SUBMIT_RESULT	80,000
UPDATE_VALIDATOR	30,000
UNJAIL	50,000

Burn Mechanisms¶

ComputeChain implements selective burning - tokens are only burned when truly necessary:

What Gets Burned¶

Slashing Penalties
Validator misbehavior: 5% of total stake (self + delegations)
Miner incorrect results: 10% of worker stake
All slashed tokens → BURNED
Unjail Fee
Early exit from jail: 1,000 CPC → BURNED
Unstake Penalty (if jailed)
10% of self_stake → BURNED
Dust from Integer Division
Remainder from reward distribution → BURNED
Unused Miner Pool
If no PoC activity in block → BURNED (until Phase 2A)
Validator/Miner Cap Excess
If reward exceeds caps → BURNED

Annual Burn Estimate¶

Devnet (best case): - Fee burn (20%): ~630k CPC/year - Dust: ~50k CPC/year - Unused miner pool: ~9.5M CPC/year (until PoC active) - Total: ~10M CPC/year

Net emission (Phase 1): - Minted: ~31.5M CPC/year - Burned: ~10M CPC/year - Net: ~21.5M CPC/year (~2.15% inflation)

Staking & Delegation¶

Validator Staking¶

Minimum Stake: - Devnet: 1,000 CPC - Mainnet: 100,000 CPC

Unstaking: - Unbonding period: 100 blocks (devnet) / 21 days (mainnet) - Penalty if jailed: 10% of stake burned - Automatic return: Tokens returned after unbonding period

Delegation¶

Minimum Delegation: 100 CPC

Limits: - Max validators per delegator: 10 - Max validator power: 20% of total voting power

Unbonding: - Period: Same as validators (21 days mainnet) - No penalty: Delegators don't get penalized for undelegating - Slashing risk: If validator is slashed, delegators lose 5% too

How It Works: 1. Delegate tokens to validator 2. Validator earns block rewards 3. Commission deducted (e.g., 10%) 4. Remaining rewards distributed proportionally 5. Rewards auto-credited to your balance

Treasury¶

Address: cpc1treasury000000000000000000000000000000000000000000

Funding Sources: - 10% of all transaction fees - Governance proposals can allocate funds

Purpose: - Ecosystem grants - Development funding - Marketing & partnerships - Community initiatives

Governance: Initially controlled by core team, transitioning to on-chain governance.

Economic Invariants¶

The blockchain enforces strict economic invariants:

1. Supply Conservation¶

genesis_supply + total_minted - total_burned
= sum(account_balances) + sum(validator_stakes) + sum(delegations) + unbonding_queue + treasury

Checked after every block.

2. Non-Negative Balances¶

All account balances must be ≥ 0 at all times.

3. Validator Power Cap¶

No validator can control >20% of total voting power.

4. Delegation Consistency¶

validator.total_delegated = sum(validator.delegations)

5. Reward Distribution Accuracy¶

distributed_rewards ≤ block_reward + fees
dust = (block_reward + fees) - distributed_rewards
dust → burned

Miner Weight System (Phase 2A)¶

ComputeChain uses a sophisticated ZK-based weight calculation for PoC workers:

Weight Formula¶

weight = results_count × gpu_tier × uptime_score × task_difficulty × reputation

Components:

Component	Range	Description
`results_count`	0+	Number of valid results submitted
`gpu_tier`	0.5 - 4.5x	GPU multiplier (RTX 4080: 1.3x, H100: 4.0x, H200: 4.5x)
`uptime_score`	0.0 - 1.0	Reliability score (tasks completed / assigned)
`task_difficulty`	1.0 - 6.0	Task complexity multiplier
`reputation`	0.0 - 1.0	Historical performance score

GPU Tier Multipliers¶

GPU	Tier	Description
RTX 4070	1.0x	Baseline consumer GPU
RTX 4080	1.3x	+30%
RTX 4090	1.6x	+60%
RTX A6000	2.0x	Professional GPU
A100 40GB	2.5x	Data center
A100 80GB	3.0x	High-memory
H100	4.0x	Latest gen
H200	4.5x	Highest tier

ZK Proof Architecture¶

Off-chain (Miner): 1. Calculate weight using formula 2. Generate ZK proof of honest calculation 3. Sign (weight + proof) with private key 4. Submit to blockchain

On-chain (Blockchain): 1. Verify signature (authenticity) 2. Verify ZK proof (honest calculation) 3. Check bounds (min/max weight) 4. Distribute rewards proportionally

Benefits: - ✅ Privacy-preserving (GPU specs not revealed) - ✅ Cryptographically secure (cannot fake weight) - ✅ Fast verification (no formula execution on-chain) - ✅ Upgradable (formula can change without hard fork)

Commission & Validator Economics¶

Commission Rates¶

Range: 0% - 20%

Change Rules: - Cooldown: 7 days between changes - Announce period: 4 hours before effective - Max increase: +5 percentage points per change

Example:

Day 0: Commission 5%
Day 7: Announce change to 10% → Effective in 4 hours
Day 14: Can change again (cooldown passed)

Delegator Protection: During announce period, delegators can undelegate without penalty (just 21-day unbonding).

Economic Parameters¶

All economic parameters are centralized in protocol/config/economic_model.py:

DEVNET = EconomicConfig(
    initial_block_reward=10 * DECIMALS,
    halving_period_blocks=1_000_000,

    validator_reward_share=0.70,  # 70%
    miner_reward_share=0.30,      # 30%

    validator_fee_share=0.90,     # 90%
    treasury_fee_share=0.10,      # 10%

    max_validator_power_share=0.20,  # 20%
    max_commission_rate=0.20,        # 20%

    validator_slashing_rate=0.05,    # 5%
    miner_slashing_rate=0.10,        # 10%

    unjail_fee=1_000 * DECIMALS,     # 1000 CPC
    unstake_penalty_rate=0.10,       # 10%

    ...
)

Networks: DEVNET, TESTNET, MAINNET

Summary¶

ComputeChain Economic Model:

✅ Sustainable: Halving-based emission with selective burning ✅ Decentralized: 20% power cap, max 10 validators per delegator ✅ Secure: Slashing for misbehavior, delegators at risk too ✅ Fair: ZK-based miner weights, GPU-tier adjusted rewards ✅ Transparent: All parameters in one config file ✅ Verifiable: Economic invariants checked every block

Status: - Phase 1.2: Economic Model ✅ COMPLETE - Phase 2A: PoC Integration ⏳ Ready to implement

Economic Model & Tokenomics¶

Overview¶

Emission Model¶

Block Rewards¶

Block Reward Distribution¶

Validator Pool (70%)¶

Miner Pool (30%)¶

Transaction Fees¶

Burn Mechanisms¶

What Gets Burned¶

Annual Burn Estimate¶

Staking & Delegation¶

Validator Staking¶

Delegation¶

Treasury¶

Economic Invariants¶

1. Supply Conservation¶

2. Non-Negative Balances¶

3. Validator Power Cap¶

4. Delegation Consistency¶

5. Reward Distribution Accuracy¶

Miner Weight System (Phase 2A)¶

Weight Formula¶

GPU Tier Multipliers¶

ZK Proof Architecture¶

Commission & Validator Economics¶

Commission Rates¶

Economic Parameters¶

Summary¶

Further Reading¶