Supply & Emission

UltraDAG has a fixed maximum supply of 21 million UDAG with a Bitcoin-style halving schedule. Zero pre-mine — all tokens distributed through per-round emission. This page covers the emission curve, distribution model, 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 emission curve follows a geometric series. Over 64 halvings (~106 years), the total minted supply asymptotically approaches 21,000,000 UDAG:

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  5:    +656,250.00 UDAG  (96.88% of max)
...
Era 64:          < 1 sat      (100.00% of max)

Emission-Only Genesis (Zero Pre-Mine)

No genesis allocations. Total supply starts at 0 on mainnet. Every UDAG enters circulation through per-round protocol emission:

Reward Distribution

Each round, newly minted UDAG is distributed as follows:

Distribution Flow

The round reward (1 UDAG) is split into a Validator Pool (75%), Council Pool (10%), DAO Treasury (10%), and Founder (5%). The Validator Pool is then distributed among active validators. The Council Pool is split equally among council seats.

Validator Rewards

The validator pool (75% of round reward) is distributed to validators:

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

$$ \text{validator_reward}_i = \text{round_reward} \times (1 - \frac{\text{council_emission_percent}}{100}) \times \frac{\text{effective_stake}_i}{\sum \text{effective_stakes}} $$

Council Rewards

10% of the round reward (default, governable 0-30%) goes to the Council of 21:

$$ \text{council_share} = \text{round_reward} \times 0.1 $$

This is distributed equally among occupied council seats.

Per-Round Protocol Distribution

The distribution sequence each round:

1. Calculate the current era’s reward: reward = initial_reward >> (round / halving_interval)
2. Cap at remaining supply: reward = min(reward, MAX_SUPPLY - total_supply)
3. Mint reward sats into existence (increment total_supply)
4. Distribute (100 - council_emission_percent)% to validator pool (proportional to effective stake)
5. Distribute council_emission_percent% to council pool (equal per seat)
6. Verify supply invariant

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:

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

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