Token Economics

Token Economics

The Blockless Network's token economic mechanism is founded on the direct interaction between the nnApp developers, who deploys and runs specialized networks on Blockless, and the node operator or contributor, who supplies hardware resources to the networks.

When developers deploy applications, they deposit funds into a smart contract wallet across various blockchain ecosystems, which manages the emission of funds. As the developer's application receives execution requests, the designated funds are transferred to the node contributor.

From the total fee collected from nnApp developers, 80% is allocated directly to the node operator as compensation for their hardware contribution. The remaining 20% is split into two parts: 10% is burned, effectively reducing the token supply and promoting long-term value; the other 10% is deposited into the protocol treasury, which funds network improvements and ongoing development.

  • Execution Nodes - 80%
  • Token Burn - 10%
  • Protocol Improvement Funds - 10%

Node Incentive Distribution

The Blockless Network's randomized node selection and distribution process requires a balanced and fair incentive distribution mechanism that accommodates varying commitment levels of node operators while maintaining network security.

Recognizing that not all nodes can serve the network perpetually or in a long-running manner, Blockless incorporates a novel tiering system, dividing nodes into two categories: time-commitment (full) nodes and freelance (lite) nodes.

Time-commitment nodes require staking as a timed SLA (denoted in hours) is established between the node operator and the network. In exchange, the network guarantees a variable yield for time-commitment nodes and prioritizes their fee distribution. This arrangement ensures that dedicated node operators receive appropriate compensation for their commitment.

Freelance nodes do not require staking, although it may be enforced to enhance network security. Freelance nodes can join and exit the network at their discretion, and they are compensated after all time-commitment nodes are rewarded. This means that freelance nodes may receive no incentives when node resources are abundant, ensuring that only the most active and dedicated nodes receive a significant share of the rewards.

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