Supply & Emission

UltraDAG has a fixed maximum supply of 21 million UDAG. The distribution model uses 7 buckets: 6 are distributed through per-round protocol emission (validators, council, treasury, founder, ecosystem, reserve), and 1 is a genesis pre-mine (IDO / liquidity) to bootstrap the private round and Uniswap liquidity. This page covers the emission curve, the bucket split, and supply enforcement.

Maximum Supply

The maximum supply is a hard protocol constant — no governance proposal can increase it.

Emission Schedule

Block Reward

New UDAG is minted each round (not per vertex) according to a halving schedule:

Halving Interval

$$ \text{halving_interval} = 10{,}500{,}000 \text{ rounds} $$

At 5-second rounds:

$$ 10{,}500{,}000 \times 5\text{s} = 52{,}500{,}000\text{s} \approx 1.66 \text{ years} $$

Full Emission Timeline

The nominal emission curve follows a geometric series summing to 21M UDAG over 64 halvings (~106 years). Because each round only mints 88% of the nominal reward (the six emission buckets — see below), the actual protocol-emitted supply converges to 18.48M UDAG, and the remaining 2.52M UDAG is the IDO genesis pre-mine — together totalling exactly 21M.

Nominal curve:
  Era  1: +10,500,000.00 UDAG  (50.00% of max)
  Era  2:  +5,250,000.00 UDAG  (75.00% of max)
  Era  3:  +2,625,000.00 UDAG  (87.50% of max)
  Era  4:  +1,312,500.00 UDAG  (93.75% of max)
  ...
  Era 64:          < 1 sat     (100.00% of max)

Actual per round:
  0.88 × nominal  →  emitted to the 6 buckets
  0.12 × nominal  →  offset by 2.52M IDO pre-mine at genesis

Genesis Allocation & Emission Buckets

Reward Distribution

Each round, the nominal block reward is split across the six emission buckets as follows:

Distribution Flow

The nominal round reward is split: Validator Pool 44%, Council Pool 10%, DAO Treasury 16%, Founder 5%, Ecosystem 8%, Reserve 5% (sum = 88%). The Validator Pool is distributed proportionally to effective stake; the Council Pool is split equally among the 21 seats (unfilled seats flow to treasury); the other four go to fixed protocol addresses.

Validator Rewards

The validator pool (44% of the nominal round reward) is distributed to validators:

• Active validators (producing vertices): receive rewards proportional to effective stake
• Passive stakers (staked but not in the top-100 active set): receive 50% of what an equivalent active validator would earn

$$ \text{validator_reward}_i = \text{round_reward} \times \frac{\text{validator_emission_percent}}{100} \times \frac{\text{effective_stake}_i}{\sum \text{effective_stakes}} $$

Council Rewards

10% of the nominal round reward (default, governable 0–30%) is allocated to the Council of 21, split using a fixed denominator: each seat earns council_total / 21 regardless of how many seats are filled. Unfilled-seat residual flows to the DAO treasury.

$$ \text{council_share}_i = \frac{\text{round_reward} \times \text{council_emission_percent}}{100 \times 21} $$

Per-Round Protocol Distribution

The distribution sequence each round:

1. Calculate the nominal era reward: reward = initial_reward >> (round / halving_interval)
2. Cap at remaining supply: reward = min(reward, MAX_SUPPLY - total_supply)
3. Credit reward × council_emission_percent / 100 to council (seated members) + residual to treasury
4. Credit reward × treasury_emission_percent / 100 to treasury
5. Credit reward × founder_emission_percent / 100 to founder address
6. Credit reward × ecosystem_emission_percent / 100 to ecosystem address
7. Credit reward × reserve_emission_percent / 100 to reserve address
8. Credit reward × validator_emission_percent / 100 to validators proportional to effective stake
9. Verify supply invariant (sum of balances + treasury == total_supply)

Fee Handling

Transaction fees are not part of the emission — they come from existing circulating supply:

Minted rewards are distributed separately via distribute_round_rewards(). Fees are included in the vertex producer’s coinbase independently.

Supply Cap Enforcement

The protocol enforces the supply cap at multiple levels:

Minting Cap

let reward = base_reward >> (current_round / HALVING_INTERVAL);
let capped = std::cmp::min(reward, MAX_SUPPLY_SATS - total_supply);

If total_supply equals MAX_SUPPLY_SATS, no new UDAG is minted. The protocol continues operating on fees only.

Supply Invariant

After every state transition:

$$ \text{liquid} + \text{staked} + \text{delegated} + \text{treasury} + \text{bridge} + \text{streamed} = \text{total_supply} \leq \text{MAX_SUPPLY} $$

Where liquid includes the IDO pre-mine address, ecosystem and reserve multisig addresses, and all validator/founder balances. Violation triggers immediate node halt (exit code 101).

Slashing is Deflationary

When a validator is slashed for equivocation, the slashed amount is burned — removed from total_supply. This makes slashing deflationary:

$$ \text{total_supply}{\text{new}} = \text{total_supply}{\text{old}} - \text{slashed_amount} $$

Burned supply can never be re-minted. The effective max supply decreases permanently with each slash event.

Comparison with Bitcoin

Next Steps

• Staking & Delegation — how rewards are earned
• Governance — council reward allocation