Token Economics
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Overview
DIG Token is a Chia Asset Token (CAT) that powers the network's economic incentives. With a fixed supply of 25 million tokens distributed linearly over 15 years, it enables staking, rewards, and value signaling across the ecosystem.
Token Utility
Core Functions
- PlotCoin Staking - Required collateral for storage registration
- Handle Registration - Payment for human-readable domains
- CapsuleStakeCoin Collateral - Per-capsule economic commitment
- Reward Distribution - Primary reward currency
- Network Bribes - Performance optimization payments
- Governance - Future DAO voting rights
Token Distribution
Supply Parameters
- Total Supply: 25,000,000 DIG (fixed)
- Emission Period: 15 years linear
- Minting: Single issuance at deployment
- Additional Minting: Impossible
Distribution Buckets
Protocol Rewards 50% (12.5M) ████████████████████████ ████████████████████████
Investor Funding 30% (7.5M) ████████████████████████████████
Early Supporters 5% (1.25M) █████
Liquidity Pool 5% (1.25M) █████
Developer Funds 5% (1.25M) █████
Founder Funds 5% (1.25M) █████
Implementation Details
Protocol Rewards (50%)
- Streamed to validator over 15 years
- Escrowed in Rewards Distributor
- Distributed to verified storage providers
Investor Bucket (30%)
- 20 vaults × 375,000 tokens each
- Linear vesting over 15 years
- $250,000 XCH offer files
- Irrevocable upon acceptance
Other Buckets (20%)
- Early supporters: Airdrop mechanism
- Liquidity: TibetSwap XCH pairing
- Developer: Community development fund
- Founder: Long-term alignment
Economic Flow
Content Publishers → DIG Handle Registry + CapsuleStakeCoins → Economic Signals
↓ ↓ ↓
Pay DIG DIG Collateral Market Discovery
↓ ↓
Lock Tokens DIG Nodes Respond
↓ ↓
Witness Validators ← Storage Validation ← PlotCoin Registration
↓ ↓
Service fees Proof verification
↓ ↓
Rewards Distributor ← Reward authorization ← Successful validation
↓
Token rewards to DIG Nodes & Witnesses
Key Mechanisms
Publisher Demand Loop
- Publishers pay DIG tokens for handle registration
- Publishers lock DIG tokens for CapsuleStakeCoin collateral
- Combined demand creates upward pressure on token value
Storage Provider Loop
- DIG Nodes stake tokens for PlotCoins
- Tokens locked during active storage
- Meltable to recover stake
Value Signaling Loop
- Handle tier signals content value to network
- CapsuleStakeCoin collateral proves economic commitment
- Higher economic backing attracts more storage providers
Validation Reward Loop
- Witness Validators verify storage commitments
- Successful validations trigger reward distribution
- DIG Nodes and Witnesses earn tokens based on performance
Economic Design
Anti-Inflationary Features
- Staking Locks - Temporary supply reduction
- Utility Demand - Multiple use cases drive demand
- Linear Emission - Predictable 15-year schedule
- No Additional Minting - Hard supply cap
Incentive Alignment
| Participant | Incentive | Mechanism |
|---|---|---|
| Storage Providers | Earn rewards | Proof verification |
| Validators | Service fees | Handle + reward fees |
| Publishers | Content availability | Handle registration |
| Token Holders | Value appreciation | Network growth |
Network Effects
More valuable content → Handle registration + CapsuleStakeCoin collateral
↓ ↓
Higher DIG demand ← Economic signals → More storage providers compete
↓ ↓
Higher token value ← More rewards ← More witness validation ← Better service
↓ ↓
Attracts more publishers → Higher quality content → Network growth cycle
Token Metrics
Circulation Schedule
def tokens_in_circulation(year):
total_supply = 25_000_000
emission_years = 15
annual_emission = total_supply / emission_years
return min(year * annual_emission, total_supply)
Staking Economics
PlotCoin Staking
- Minimum stake per capsule
- Linear scaling with capsule count
- Refundable via melting
Economic Security
- Spam prevention through staking cost
- Sybil resistance via economic commitment
- Quality filtering through market dynamics
Distribution Technology
Streaming Puzzles
All tokens locked in Chialisp streaming puzzles:
- Time-locked release mechanism
- Cryptographically enforced schedule
- No administrative override
- Transparent on-chain verification
Future Enhancements
DAO Integration
When Chia DAO primitives are ready:
- Community governance over parameters
- Treasury management for development
- Validator selection mechanisms
- Protocol upgrade voting
Economic Upgrades
- Dynamic staking requirements
- Geographic distribution incentives
- Quality-of-service multipliers
- Cross-chain token bridges
Security Properties
Economic Security
- Fixed Supply: No inflation risk
- Time-Locked: Prevents dump scenarios
- Multi-Revenue: Sustainable funding
- Trustless: Smart contract enforcement
Implementation Security
- Audited Contracts: Verified Chialisp code
- No Admin Keys: Immutable distribution
- Public Verification: All flows on-chain
- Atomic Operations: No partial states
Summary
The DIG Token creates a sustainable economic system for decentralized storage through:
- Fixed 25M supply with 15-year emission
- Multiple utility functions driving demand
- Aligned incentives for all participants
- Trustless distribution via smart contracts
This design ensures long-term network sustainability while maintaining decentralization and security properties essential to the protocol's mission.