Incentive Layer#

This chapter discusses the various economic tools that the ErbieChain utilizes to encourage participation. Essentially, the methods employed to achieve these objectives include incentives for adhering to the protocol, penalties for violating the protocol, and sanctions for actions that seem to attack the protocol.

One appealing feature of the proof-of-work (PoW) system is the simplicity of its economic model. Miners earn block rewards by creating blocks that are incorporated into the chain and by including transactions in those blocks. These blocks accrue fees and are rewarded with newly minted coins (coin issuance) and transaction fees paid with previously issued coins.

On the other hand, ErbieChain proposes a diverse range of economic incentives used in its protocol. In the subsequent sections, we dissect these elements as follows:

  1. The stake itself serves as the most fundamental component of the economy.

  2. Within the protocol, the metric referred to as the “Validator’s stake amount” is the actual gauge of a specific validator’s influence on the protocol.

  3. Much like the proof-of-work system, the protocol issues new coins to provide the incentives under discussion.

  4. Various incentives are implemented to prompt desired behaviors.

  5. Penalties are used as deterrents for undesirable actions, such as failure to provide valid proof, or delays or inaccuracies in providing proof.