Economics
A sovereign economic engine that prices compute, bandwidth, and quantum-resistant ledger space through Usage-Based Dynamic Issuance and NPU-centric resource markets.
Sovereign Economic Engine
The Po8 Network treats its native asset as a resource credit backed by three scarce commodities: NPU inference, Mixnet bandwidth, and quantum-resistant ledger space. The monetary policy—Usage-Based Dynamic Issuance (UBDI)—links token supply directly to how much of these resources users actually consume.
Design Goals
- Sustainability via usage-based issuance rather than fixed inflation
- Hardware egalitarianism that favors consumer NPUs over industrial data centers
- Privacy as a funded public good via Mixnet and dVPN rewards
- Quantum-resistant store of value for long-lived financial data
From Speculation to Utility
Legacy L1s rely on speculative scarcity or capital-weighted staking. Po8 anchors value in the real cost of silicon, electricity, and bandwidth—turning the token into a claim on useful work instead of a purely reflexive financial asset.
Layer-1 Economic Archetypes
The UBDI model is informed by the successes and failures of previous Layer-1 designs.
| Feature | Bitcoin | Ethereum | Solana | Helium | Po8 |
|---|---|---|---|---|---|
| Supply Policy | Fixed Cap | Burn / Mint | High Inflation | Max Supply, Burn-Mint | Usage-Based Dynamic Issuance |
| Consensus Cost | Energy (PoW) | Capital (PoS) | Bandwidth + Hardware | Radio Hardware | Useful Work: Inference + Transport |
| Hardware Target | Industrial ASICs | Capital-Rich Validators | Data Center Servers | Commodity LoRaWAN | Consumer NPUs (Apple, Kneron) |
| Value Capture | Fees → Miners | Fees → Burn | Inflation → Stakers | Usage → Burn | Fees Burned + Utility Paid to Nodes |
| Privacy Cost | External Mixers | External Mixers | None | None | Protocol-Level Incentives |
Usage-Based Dynamic Issuance (UBDI)
Instead of a fixed emission curve, Po8 adjusts issuance based on how much compute and bandwidth users actually buy. Supply expands only to bootstrap underutilized capacity and contracts as organic fee revenue grows.
e(t) = U_target − U_actual, where utilization measures purchased NPU cycles and Mixnet bandwidth.
Issuance Side
- I_base maintains validator liveness and minimum Mixnet cover traffic
- If utilization is low, issuance increases to subsidize idle but necessary capacity
- If utilization is high, issuance decays toward zero and fees dominate miner income
Burn Side
- 100% of base ledger fees are burned to price PQC-heavy block space
- A protocol take rate from inference fees (β) is burned to tie value to AI demand
- A smaller take from transport fees (γ) is burned to link token value to bandwidth usage
Hardware Egalitarianism & Stake Saturation
TensorChain deliberately targets the Batch-1 Efficiency Gap where industrial GPUs are weakest and consumer NPUs are strongest. The economics make scale an enemy rather than an advantage for centralized operators.
Batch-1 Advantage
Industrial GPUs like the H100 waste energy at batch size one due to kernel launch latency and PCIe overhead, while Apple Silicon saturates unified memory with low idle power. The protocol sets difficulty so industrial miners operate at a loss.
Stake Saturation
Rewards grow with stake only up to S_max = TotalSupply ÷ K. Capital beyond that earns zero marginal return, forcing large holders to back many physically distinct validators rather than a few super-nodes.
Physical Sybil Resistance
Because rewards depend on real NPU throughput and network position, duplicating virtual identities without buying more hardware does not increase income. Decentralization is enforced by silicon and bandwidth, not just social norms.
Compute, Bandwidth, and Ledger Space
InferNet Compute Marketplace
InferNet turns INT8-quantized inference into a fungible commodity. Deterministic outputs mean a “Llama-3-8B token” is identical regardless of where it was computed. Miners post bonds, and optimistic fraud proofs with jackpot rewards keep them honest.
Mixnet & dVPN Bandwidth
The Mixnet and dVPN layers borrow from Orchid-style probabilistic nanopayments. Users attach lottery tickets to packets; only winning tickets settle on-chain, giving nodes statistically correct revenue while keeping the ledger uncongested.
Quantum-Resistant Ledger Space
ML-DSA signatures are ~50× larger than Ed25519. Po8 uses segregated witness blobs and a value-density mempool policy so that high-value, high-density transfers out-compete spam, while privacy-preserving transactions can pay a surcharge for anonymity.
Dual-Piston Token Flows
The Po8 economy runs on two opposing but coupled forces—burning tokens for quantum-resistant ledger usage while minting tokens to pay edge nodes for useful work.
Piston A: Ledger Burn
- Users buy PO8 to pay for private transactions and bridge value into quantum safety
- Base fees for block space are fully burned, tightening supply as demand rises
- In high-demand scenarios (HNDL panic), issuance falls toward zero while burn surges
Piston B: Infrastructure Rewards
- Edge miners earn PO8 for TensorChain, InferNet tasks, and Mixnet relay work
- A portion of rewards flows into a research treasury funding crypto-agility and audits
- Long-term, organic demand for compute and privacy creates a floor for token value
Explore the Full Model
Read the detailed economics specification and see how UBDI interacts with consensus, privacy, and hardware.