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Economic Phases

The protocol transitions through three distinct economic phases over its lifecycle:

Phase Breakdown​

Phase 1: Emission-Driven (Years 1-3)​

Characteristics:

  • High block emissions bootstrap network security
  • Minimal fee revenue as network grows adoption
  • Miner revenue: ~90% emissions, ~10% fees

Purpose: Attract initial miners and validators to establish network infrastructure before significant organic demand.

Typical Miner Monthly Income (Top 25%):

  • Block emissions: ~450 $ON
  • User fees: ~50 $ON
  • Total: ~500 $ON

Phase 2: Hybrid (Years 4-7)​

Characteristics:

  • Declining emissions as usage increases
  • Growing fee revenue from network adoption
  • Miner revenue: ~50% emissions, ~50% fees

Purpose: Transition period where fee revenue increasingly supplements declining emissions.

Typical Miner Monthly Income (Top 25%):

  • Block emissions: ~200 $ON
  • User fees: ~200 $ON
  • Total: ~400 $ON

Phase 3: Fee-Driven (Years 8+)​

Characteristics:

  • Minimal emissions (1-2% annual inflation)
  • Fee revenue primary income source
  • Miner revenue: ~20% emissions, ~80% fees

Purpose: Sustainable long-term economy independent of inflation, similar to Ethereum post-merge.

Typical Miner Monthly Income (Top 25%):

  • Block emissions: ~50 $ON
  • User fees: ~350 $ON
  • Total: ~400 $ON

Next Steps​