cadastry

title: "Supply & Inflation" order: 1

Token Supply and Inflation: Balancing Growth and Stability

Welcome to the economic engine of Cadastry. Our token supply and inflation model is meticulously designed to foster network growth while preserving long-term value for all participants. Let's dive into the mechanics that make this possible.

The Genesis: A Fair Start with 25% Supply Pre-Mine

At Cadastry, we believe in fairness from day one. That's why we've made the bold decision to start with:

Initial Supply (25% of Total Supply): 5,385,830,400 CDCD

The Heartbeat of Token Creation

Our token creation process is designed to be predictable and transparent:

  • Block Reward: 256 CDCD per block
  • Block Time: 5 seconds

This means that new CDCD tokens are consistently entering the ecosystem, rewarding those who secure and maintain our network. With blocks produced every 5 seconds, Cadastry offers both rapid transaction confirmations and a steady, predictable influx of new tokens.

Controlled Growth: Our Inflation Management

While a steady supply of new tokens is crucial for network growth, unchecked inflation can be detrimental. That's why we've implemented two key mechanisms to manage inflation:

1. Annual Reduction Events

Every year, we reduce the block reward by 10%. This annual reduction serves several purposes:

  • It gradually reduces the rate of new token creation.
  • It incentivizes early participation in the network.
  • It creates natural scarcity over time, potentially increasing token value.

The next reduction is scheduled to occur after 6,311,520 blocks. Mark your calendars!

Calculating Blocks Until Next Reduction

We calculate the number of blocks until the next reduction as follows:

Seconds in 1 year=1×365.25×24×60×60=31,557,600 secondsBlocks per Reduction Interval=Seconds in 1 yearBlock Time=31,557,6005=6,311,520 blocks\begin{align*} \text{Seconds in 1 year} &= 1 \times 365.25 \times 24 \times 60 \times 60 \\ &= 31,557,600 \text{ seconds} \\\\ \text{Blocks per Reduction Interval} &= \frac{\text{Seconds in 1 year}}{\text{Block Time}} \\ &= \frac{31,557,600}{5} \\ &= 6,311,520 \text{ blocks} \end{align*}

2. Deflationary Pressures

We've also built in natural deflationary pressures to balance out token creation:

  • Transaction Fee Burning: A portion of every transaction fee is permanently removed from circulation, or "burned." This ties the deflationary pressure directly to network usage.
  • Slashing: In cases of malicious behavior, staked tokens may be slashed (partially destroyed), further reducing the circulating supply.

The Big Picture: Maximum Supply

Over the long term, our token emission schedule leads to a maximum supply of:

Maximum Supply: 21,543,321,600 CDCD

This cap on total supply ensures that CDCD remains a scarce asset in the long run while still providing ample tokens to fuel network growth and operations.

Calculating the Maximum Supply

1. Determine the Block Parameters

  • Initial Block Reward (B0B_0): 256 CDCD per block
  • Block Time (TaT_a): 5 seconds per block
  • Reduction Interval (TsT_s): Every 1 year
  • Reduction Factor: 10% reduction per year (multiplier of 0.9)

2. Calculate Blocks per Reduction Interval

As previously calculated:

Blocks per Interval=6,311,520 blocks\text{Blocks per Interval} = 6,311,520 \text{ blocks}

3. Calculate Total Tokens Minted Over Time

The block reward reduces by 10% every year, so the block reward in the nthn^\text{th} year is:

Bn=B0×(0.9)n−1B_n = B_0 \times (0.9)^{n-1}

Total tokens minted in the nthn^\text{th} year:

Tokensn=Bn×Blocks per Interval\text{Tokens}_n = B_n \times \text{Blocks per Interval}

4. Sum Over All Years

The theoretical maximum supply (excluding the initial supply) is the sum of tokens over all years:

Total Tokens Minted=∑n=1∞Tokensn=B0×Blocks per Interval×∑n=1∞(0.9)n−1=(256×6,311,520)×(11−0.9)=1,615,749,120×10=16,157,491,200 CD\begin{align*} \text{Total Tokens Minted} &= \sum_{n=1}^{\infty} \text{Tokens}_n \\\\ &= B_0 \times \text{Blocks per Interval} \times \sum_{n=1}^{\infty} (0.9)^{n-1} \\\\ &= (256 \times 6,311,520) \times \left( \frac{1}{1 - 0.9} \right) \\\\ &= 1,615,749,120 \times 10 \\\\ &= 16,157,491,200 \text{ $CD$} \end{align*}

5. Calculate the Maximum Supply Including Initial Supply

Since the initial supply is 25% of the maximum supply:

Maximum Supply=Total Tokens Minted1−0.25=16,157,491,2000.75=21,543,321,600 CD\begin{align*} \text{Maximum Supply} &= \frac{\text{Total Tokens Minted}}{1 - 0.25} \\\\ &= \frac{16,157,491,200}{0.75} \\\\ &= 21,543,321,600 \text{ $CD$} \end{align*}

6. Calculate the Initial Supply

Initial Supply=0.25×Maximum Supply=0.25×21,543,321,600=5,385,830,400 CD\begin{align*} \text{Initial Supply} &= 0.25 \times \text{Maximum Supply} \\\\ &= 0.25 \times 21,543,321,600 \\\\ &= 5,385,830,400 \text{ $CD$} \end{align*}

Supply Growth Projection

Note: The supply growth chart below reflects the updated calculations.

Below is a chart illustrating the projected growth of CDCD supply over time:

This chart shows how the rate of growth slows with each annual reduction event, creating a curve that flattens as it approaches the maximum supply.

Why This Model Works

Our token supply and inflation model is designed to strike a delicate balance:

  • Early Growth: The higher initial emission rate provides ample rewards to bootstrap the network and incentivize early adopters.
  • Long-term Stability: The annual reduction events and deflationary pressures ensure that token value is preserved over time.
  • Predictability: The fixed block reward and regular reduction schedule make the token supply highly predictable, allowing for better long-term planning by all participants.
  • Fairness: With a transparent emission schedule and controlled initial supply, everyone has an equal opportunity to participate in the Cadastry ecosystem.

By carefully managing token supply and inflation, we're creating an economic environment that can support sustained growth and innovation in the world of decentralized metadata management.