Burn & Mint Equilibrium

The Burn & Mint Equilibrium creates an on-chain marketplace between the product creator and the consumer. Consumers buy and destroy tokens to obtain goods and services - in DeMR's case, or the ability to set priorities for upcoming spatial scenes. Specifically, the mechanism enables them to purchase and destroy DMR tokens, and the system generates DDCs for them. As customers use their system DDCs, the system tracks service usage in order to assign relevant rewards to specific Land Holders, contributors, and computing nodes.

If the demand for network data usage is getting high, and the number of tokens destroyed by consumers per unit of time is greater than the number of tokens minted in that time period, there is a positive price pressure on the tokens, when a fixed number of DMRs will be redeemable for more DDCs, which will cause the system to gradually return to equilibrium; and vice versa.

Given that tokens are burned over time, and we don't want to deplete the supply of tokens in the system, we will use the Capped Net Emissions model, which means that the burned net amount of tokens will be used as mintable tokens for rewards to Land Holders and added back to the mining pool supply. However, this will not lead to a change in the maximum supply of tokens: the net release of tokens is to make up for the additional minting demand caused by the burning demand when the supply cannot meet the demand due to the halving rule, which means dynamically adjusted according to the number of data visits per unit time. The entry of new tokens into the system will reduce the deflationary effect to a certain extent. Obviously, the normal operation of the system and the sufficient incentives for the contributors are more important. Eventually, there will be 2 billion tokens in permanent circulation in the system.

The release amount of tokens is a variable (due to the restriction on the maximum supply by the halving rule, it is not a constant). Before the Net Emissions model is activated, the release amount has no functional relationship with the destruction brought by the generation of DDC. The Net Emissions model will subsequently be activated as the demand for network usage increases and token releases are halved each year, so that contributors can continue to receive their rewards. We will dynamically adjust the maximum Net Emissions limit per unit of time-based on actual demand and through a vote initiated by the Governance Board, in order to meet the rewards for contributors without unduly weakening the deflationary effect of the original model. When demand continues to increase and exceed the maximum limit on net releases, the BME model will activate again and create a deflationary effect.

Complemented by the burn and mint equilibrium model and net emission rules, the number of recycled tokens will increase as customer demand increases. The network will continue to generate substantial rewards for contributors in perpetuity, and the available amount of value will ultimately be closely tied to the value paid by customers.