Tokenomics
$NOCK's tokenomics are designed to enable Nockchain’s goal of private, scalable, decentralized, verifiable computation. The incentives are set in place for software evolution to beat brute hardware particularly in the early stages: this applies for both Nockchain as a single-threaded solid-state platform and the token issuance schedule. Early movers had an advantage in capitalization, but by the end of the first few eons the network supported a massive proof rate.
In this video, Zorp engineer N. E. Davis outlines the foundations of Nockchain's tokenomics.
Hard Cap
The Nockchain platform will issue 2³² $NOCKs to miners as block rewards for solving the proof-of-work puzzle fastest (and communicating the proof) at each block height. The fungible token on Nockchain is $NOCK, colloquially called nocks. These are subdivisible into 2¹⁶ components, or nicks.
The hard cap is encoded as the cumulative sum of the issuance schedule at schedule.hoon, ll. 6–47.
Fair Launch
Beginning with the release of the open-source reference miner a few weeks before launch, the world has been able to compete in optimizing miners for competitive software execution. 100% of $NOCK goes to miners—and miners have been responsive.
A fair launch provides several key benefits:
Fairness. Mining for nocks is permissionless and available to anyone. The open-source software can be used as-is or modified for competitive mining.
Decentralization. Opening Nockchain up with permissionless mining means the network avoids concentration both economically and administratively, broadening its reach beyond what is possible with community points or airdrops.
Clear regulatory positioning. From the start, there was no common enterprise who was or is responsible for Bitcoin's development, and anyone who mined or purchased Bitcoin could not reasonably expect profits from anyone’s efforts. By engaging in a Fair Launch, Nockchain is similarly decoupled from any expectation of profit from a common enterprise.
Issuance Schedule
Nockchain has an immutable issuance schedule which caps out at 2³² $NOCKs. The issuance curve is steeper at the beginning to motivate early participation, and in particular to incentivize software optimization over hardware farming.
Each issuance valuation period is called an "eon".
Table: Nockchain issuance schedule.
Figure: Nockchain total mining and block reward size for the first twelve years.
The issuance schedule is encoded at schedule.hoon, ll. 6–47.
Target Difficulty
Nockchain targets a ten-minute block time on average, so at the end of two block-weeks the algorithm automatically recalculates the puzzle difficulty to dial it up or down according to the proofpower being exercised on the network at the time.
Each period of fixed proof-of-work puzzle difficulty is called an "epoch".
The target difficulty is adjusted at consensus.hoon, ll. 150–195.
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