Authors: Frederico Teixeira [email protected]

Revisions History

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All information regarding project details, token design, distribution mechanisms, technical parameters, and any forward-looking statements is preliminary and subject to change without notice. No representations or warranties are made as to the completeness or accuracy of the information herein.

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Introduction

This document outlines the specifications for Logos Blockchain's block rewards mechanism, a critical component of the network's economic model. The mechanism is designed to create a sustainable economic framework that incentivizes network participation while maintaining long-term stability.

The objective is to develop a block rewards system that addresses key challenges specific to Logos Blockchain's architecture, including the unlinkability between block proposal and reward collection, and the inability to directly allocate transaction fees to specific block proposers. These constraints necessitate a carefully designed economic incentive structure.

Building on previous work in blockchain economics, this specification proposes a dynamic token emission system that calibrates LGO issuance according to network Key Performance Indicators (KPIs). The system uses two primary metrics: inferred total stake (as a security indicator) and average burning rate (to maintain supply equilibrium).

The document references internal mathematical models and simulations that demonstrate how the proposed mechanism would behave under various conditions. Key parameters include maximum annual emission rate ($1\%$), control responsiveness factors, and target metrics for network security.

The conclusion of our analysis indicates that this KPI-based emission model should achieve several important outcomes:

• Initially higher emission rates (capped at $1\%$ annually) to bootstrap network participation.
• Gradual stabilization of token supply as the system matures, with our baseline simulation showing just $1.33\%$ total inflation after $10$ years.
• Self-regulating mechanism where token issuance naturally adjusts to compensate for burned transaction fees.
• Built-in safeguards against manipulation through moving averages and bounded functions.

This specification represents a comprehensive approach to creating a robust economic foundation for the Logos Blockchain network that balances security requirements with long-term economic sustainability.

Overview

The Logos Blockchain block rewards mechanism is a KPI-based dynamic token emission system designed to create a sustainable economic framework that incentivizes network participation while maintaining long-term stability. This section provides a high-level understanding of how the system works and its key components.

Key Principles

The design of the rewards system reflects three architectural constraints unique to Logos Blockchain:

• Unlinkability: Block proposal and reward collection are intentionally decoupled for privacy, meaning rewards cannot be assigned to a single proposer.