Tokenomics

Introducing HUE Token

HUE is a utility token with a dynamic supply, influenced by both emission and burning mechanisms. The maximum supply is capped at 1,000,000,000.

Distribution

TBD

Emission Mechanisms

1. Mining

  • Process: Users can mine HUE tokens by hosting AI models on their GPUs.

  • Staking Requirement: A minimum of 10,000 HUE or esHUE tokens must be staked for a mining node to be active. Below this threshold, no rewards are generated.

  • Reward: Mining yields esHUE tokens, which is automatically compounded to the stake of miner node. Reward rate depends on GPU efficiency, availability (uptime), the type of AI model being run, and the total amount staked in a miner node.

  • Boosted POW Mining: For stakes between 10,000 to 100,000 HUE tokens, mining efficiency increases proportionally with the amount staked.

2. Staking

  • Process: Any user can stake HUE or esHUE tokens in mining nodes.

  • Reward: Staking yields are given in HUE or esHUE depending on the type of token staked. Staking esHUE produces higher yields than HUE.

  • Lock Period: Unstaking HUE incurs a 30-day lock period. Unstaking esHUE has no lock period.

  • Vesting: esHUE rewards can be vested into HUE over a one-year period with linear vesting.

  • Transfer of Stake: Users can instantly transfer their HUE or esHUE stake from one miner to another. This promotes flexibility and competition among miners.

Burning Mechanisms

Similar to the EIP-1559 model in Ethereum, Heurist implements a token burn mechanism. When users pay for AI inference, a portion of the HUE payment is permanently removed from circulation.

The balance between token creation and burning is closely tied to network activity. During periods of high usage, the rate of token burning can exceed the rate of new token creation. This will potentially lead the Heurist network into a deflationary phase. This mechanism helps in regulating the token supply, and aligns the token value with the actual demand within the network.

Bribes and (3,3)

“Bribes” were a term first coined by users of DeFi, more specifically, by those of Curve Finance. These bribes are actually gamified incentivizes that help direct rewards for liquidity pools, in exchange for an incentive. We draw inspiration from the bribing mechanism of Curve, and apply it in boosted POW mining in Heurist.

Miners have the option to set a specific percentage of their mining rewards as a bribe to attract stakers. A staker may choose the miner with the highest bribe, but other factors should also affect the staker's choice such as miner's hardware performance and uptime.

Miners are incentivized to bribe because a higher stake in the miner node will result in higher mining efficiency. It creates a competitive yet cooperative environment where miners and stakers are aligned to provide better service to the network.

With this game theory-inspired (3,3) mechanism, we create an alignment between miners and token holders who take actions to achieve the best collective outcomes.

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