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Orbit Economics

This page provides a comprehensive breakdown of Orbit economics, including detailed revenue models, cost structures, and profitability calculations for all network participants. For a high-level overview, see Understanding Orbits.

Economic Overview​

Orbits generate value from two primary revenue streams that are distributed among network participants:

Revenue Sources​

1. Block Emissions (Protocol-level mining rewards)

Newly minted $ON tokens distributed every block:

  • 80% → Miners: Distributed across all Orbits by quality-weighted share
  • 20% → Validators: For consensus participation

Distribution mechanism:

  • Orbit allocation depends on activity (request volume), fees generated, and quality
  • DAO can adjust emission weights per Orbit
  • Within each Orbit, miners receive proportional share based on quality scores

2. User Fees (Per inference request)

Fees paid by agents for AI inference services:

100% User Payment
├─ 2% → Orbit Owner (infrastructure commission)
└─ 98% Remaining distributed:
    ├─ 65% → Miner (who executed the task)
    ├─ 18% → Validators (quality evaluation)
    └─ 15% → Stakers (real yield)

Example calculation (0.0001 $ON fee):

  • Orbit owner: 0.000002 $ON (2%)
  • Miner: 0.0000637 $ON (63.7% of total)
  • Validators: 0.00001764 $ON (17.64% of total)
  • Stakers: 0.0000147 $ON (14.7% of total)

Participant Economics Breakdown​

Orbit Owners​

Orbit owners create and maintain specialized AI networks within Orbinum.

Revenue Streams:

  • 2% commission on all inference fees generated by their Orbit
  • Token appreciation as Orbit grows in value and usage

Costs & Requirements:

  • Registration stake: 1,000 $ON (locked, not burned)
  • Validation fees: Paid during mandatory 2-week testing period
  • Development: Resources for building and maintaining validation logic
  • Marketing: Effort to attract quality miners and validators
  • Slashing risk: Stake can be slashed for malicious behavior

Profitability Example:

ScenarioRequests/MonthAvg FeeTotal VolumeOwner Revenue (2%)
Small Orbit100,000$0.01$1,000$20/month
Medium Orbit1,000,000$0.01$10,000$200/month
Large Orbit10,000,000$0.01$100,000$2,000/month

Stake Recovery:

  • Fully returned if Orbit voluntarily deactivated in good standing
  • Slashed if Orbit removed for protocol violations or quality failures

Miners​

Miners provide AI inference compute and compete on quality within Orbits.

Revenue Streams:

  • Block emissions: 80% of total, distributed by quality-weighted share across all Orbits
  • User fees: 65% of the 98% remaining (63.7% of total fee)

Costs & Requirements:

  • Registration stake: 1,000 $ON per Orbit (locked, not burned)
  • Hardware: GPUs, electricity, bandwidth, maintenance
  • Opportunity cost: Time optimizing models and quality
  • Slashing risk: Stake can be slashed for poor performance

Earning Strategy:

  • Quality drives earnings: Higher-ranked miners receive more request traffic
  • Can specialize in one Orbit or diversify across multiple
  • Rewards split proportionally by quality score within each Orbit

ROI Factors:

ROI=(Block Emissions + User Fees)−OpExStake + Hardware CapExROI = \frac{\text{(Block Emissions + User Fees)} - \text{OpEx}}{\text{Stake + Hardware CapEx}}

Validators​

Validators evaluate miner quality and secure Orbit integrity.

Revenue Streams:

  • Block emissions: 20% of total emissions
  • User fees: 18% of the 98% remaining (17.64% of total fee)
  • Orbit evaluation fees: Additional revenue from evaluating new Orbits during testing periods

Costs & Requirements:

  • Stake: Capital locked to participate in validation
  • Hardware: CPU/GPU for running validation logic
  • Slashing risk: Stake slashed for inaccurate scoring or malicious behavior

Earning Mechanism:

  • Distributed proportionally by stake weight and participation
  • Additional fees for evaluating new Orbits during 2-week testing
  • Consistent participation required to maintain share

Stakers​

Passive token holders who stake $ON for real yield.

Revenue Streams:

  • User fees: 15% of the 98% remaining (14.7% of total fee)
  • Passive income: No active participation required

Characteristics:

  • Rewards proportional to stake weight
  • Non-inflationary (only from user fees, not emissions)
  • Governance power: Voting rights on protocol upgrades

Economic Security & Market Dynamics​

Attack Resistance​

Validator Manipulation Prevention:

  • Attacker needs majority of validator stake to manipulate scores
  • As Orbit grows, cost to acquire 51% becomes prohibitive
  • Slashing destroys capital of malicious validators

Quality Enforcement:

  • Quality-weighted rewards incentivize honest performance
  • Poor miners receive less traffic and lower rewards
  • Market naturally filters out low-quality participants

Market Forces​

Competition:

  • Poorly managed or unprofitable Orbits lose miners and validators
  • Participants freely move to better-performing Orbits
  • Natural selection favors high-quality, well-managed Orbits

Resource Arbitrage:

  • Miners allocate compute to most profitable Orbits
  • Balances network efficiency across domains
  • Prevents over-concentration in single Orbits

Next Steps​