Token Economy
Exploring the economic model and token utility in Cypher's PoE network
Last updated: 2024-03-20
Token Economy Overview
The Proof of Engagement (PoE) blockchain network introduces a novel approach to token utility and distribution, central to incentivizing and rewarding user engagement and contributions.
Token Distribution Model
The strategy behind token distribution focuses on incentivizing engagement and participation through PoE. For detailed tokenomics please refer to: Cypher Tokenomics
Facilitating Network Engagement
Tokens serve as a primary mechanism for fostering user engagement, quantitatively measured through predefined activities including transaction validation, consensus participation, and smart contract operations.
Ei = α · Ti + β · Si + γ · Ci
Where:
- • Ti: Volume of transactions validated by node i
- • Si: Support activities performed for network maintenance
- • Ci: Contributions towards smart contract operations
- • α, β, γ: Weighting coefficients for activity prioritization
Rewarding Contributions
The distribution of tokens is intricately designed to reward nodes based on their engagement scores.
Ri = (Ei / ∑(j=1 to N) Ej) × TotalRewards
where Ri is the reward allocated to node i, and TotalRewards represents the total pool of tokens set aside for distribution
Integration within Consensus Mechanism
Security Integration
Tokens play a critical role in the PoE network's consensus mechanism, intertwining token utility with network security and integrity.
Validator Selection
The PoE consensus algorithm leverages tokens to dynamically select validators based on their engagement scores.
Mathematical Model for Token Dynamics
Token Issuance
Algorithmically adjusted to match network growth and engagement levels
Distribution
Based on engagement scores and network participation metrics
Consumption
Governed by network utility and service access requirements
Conclusion
The utility of tokens within the Proof of Engagement (PoE) blockchain network is multifaceted, driving engagement, rewarding contributions, and securing the network through a carefully crafted economic model. The integration of tokens into the network's core mechanisms, supported by detailed technical specifications and mathematical formulations, underscores their indispensable role in achieving a self-sustaining, secure, and highly engaged blockchain ecosystem.