AIA Chain Economic Model Overview

The AIA Chain economic model is optimized to provide the simplest possible experience for developers and end-users while also offering appropriate incentives for network security and ecosystem development. Here’s a summary of the key principles driving the system:

1. Proof of Stake Thresholds:

Validator node operators provide scarce and valuable computational resources and network security. To ensure their computations are accurate, they must "lock" AIA tokens as collateral. If the results are found to be incorrect, they lose a portion of the staked AIA tokens. This mechanism is fundamental to network security. The participation threshold is algorithmically set at a minimum level to allow the broadest possible participation within a given "epoch" cycle (minimum of one day).

2. Epoch Rewards:

Node operators receive a percentage of the total supply as a "security fee" of 4.5%. This rate aims to balance network security with sufficient participation levels in the AIA Chain ecosystem.

3. Protocol Library:

In addition to validators, the protocol library receives 0.5% of the total supply annually for continuous reinvestment into ecosystem development.

4. Transaction Costs:

Network usage consumes two types of resources: immediate and long-term. Immediate transfer costs are incurred with each transaction, as each transaction utilizes network and computational resources. These costs are priced into each transaction and paid in tokens.

5. Storage Costs:

Storage is a long-term cost since maintaining data is a continuous burden on network nodes. The foundation covers this by maintaining a minimum balance on accounts or contracts. This provides an indirect payment mechanism through inflation to maintain contract and account states on nodes.

6. Inflation:

Inflation is related to payments to validators and protocol operations, excluding gas fees. The maximum inflation rate is set at 5%. As network usage increases and more transaction fees are burned, inflation may gradually decrease. Inflation could even become negative (supply decreases) if enough fees are burned.

7. Scaling Thresholds:

When the network receives additional capacity relative to usage, the thresholds driving this additional capacity are inherently positive.

8. Security Thresholds:

Economic incentives set thresholds for participant behavior to ensure good conduct.