Authors: Thomas Lavaur [email protected], Marcin Pawlowski [email protected]

Revisions History

<aside> ❗

*Disclamer: This material, including any linked pages or documents, is provided for informational purposes only. It does not constitute investment advice, a solicitation, or an offer to buy or sell any securities, tokens, or other financial instruments, nor should it be construed as legal, financial, or tax advice.

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.

Nothing in this material should be relied upon for investment or business decisions. Recipients of this information assume all risks associated with its use and are responsible for seeking independent professional advice regarding any actions based on it.*

</aside>

Introduction

This document outlines the cryptoeconomic model for the Logos Blockchain protocol. The network features a balanced set of economic incentives designed to ensure security, optimize resources, and support sustainable growth.

The Logos Blockchain framework rests on three core mechanisms: a cryptoeconomic model that manages supply and distribution across actors, a fee market system that efficiently allocates network resources and regulates demand, and a rewards structure that incentivizes participation from various network contributors.

Logos Blockchain implements a three-part fee structure covering execution and permanent storage, each addressing specific aspects of network resource consumption. The reward system distinguishes between block-proposing leaders and service providers (like Blend), with mechanisms that preserve leaders privacy while maintaining economic efficiency.

In this document, we detail the mathematical models underlying these systems, explain the rationale for key parameter choices, and describe the participant behaviors these mechanisms are designed to encourage.

Overview

In this section we present an overview of the cryptoeconomical aspects of the Logos Blockchain protocol.

• Users (rollup sequencers, node operators, or leaders) acquire tokens through purchase or by earning them as rewards.
• Tokens serve three main purposes:
  • Paying for transaction processing resources used: Fee Markets.
  • Declaring service participation: node operators lock a Minimum Stake through the Service Declaration Protocol to become Blend Service providers.
  • PoS Participation: leaders can propose (build) blocks by participating in a lottery where their chances of winning are proportional to their number of owned and unmoved tokens (aged tokens).
• Transactions may incur up to two types of fees:
  • Execution fee: covers the computational resources consumed by the transaction.
  • Permanent Storage fee: covers the permanent Ledger storage resources consumed by the transaction.
• All fees are burned for each block.
• Rewards are distributed on an epoch basis for leaders and on a session basis for services:
  • Leaders (block proposers) include Mantle Transactions in every block. Each transaction pays Permanent Storage and Execution fees, which are burnt. For each block, a reward is calculated following the [1.0.0] Block Rewards. Additionally, a portion of the Execution fees is minted back for leaders according to the [1.0.0] Execution Market. These two sources determine the total rewards allocated to leaders, as explained in Blend Service and Consensus Leaders, which correspond to tips from the Execution market and 40% of block rewards. For anonymity reasons, block proposers don't receive rewards directly. Instead, leader rewards accumulate in a single pool that increases on an epoch basis rather than per block (see [1.0.0] Anonymous Leaders Reward Protocol ). When a new epoch begins, the pool increases by the total leader rewards from all blocks in the previous epoch. Simultaneously, leaders from the previous epoch can start claiming their rewards, with each unclaimed reward (since genesis) representing one equal share of the pool.
  • Blend nodes provide Blend service to the network for at least one session. Using the same [1.0.0] Block Rewards, the protocol determines the total rewards allocated to the Blend network, as explained in Blend Service and Consensus Leaders which correspond to 60% of the block rewards. When a session s ends, Blend validators have one additional session s+1 to send an active message used by the Reward Distribution Protocols to determine reward distribution among validators. During the first blocks of session s+2, Blend validators from session s receive their portion of Blend Service and Consensus Leaders rewards, with proportions determined by the Reward Distribution Protocols. These rewards are distributed at the start of the next session.
• The Service Rewards Distribution Protocol handles payments of rewards for Blend Services to individual nodes.
• Individual leaders claim their rewards through a Leader Claim Operation (on-chain transaction) that preserves privacy by separating the leader reward from the proposed block.

Constructions