Telcoin

TEL: Growth Rate

Growth Rate

TEL Issuance, TEL Regeneration Rates and the TEL Sustainability Formula

TEL Treasury Issuance Rate: The total number of TEL units generated by the Platform each year from the Treasury. 1B TEL flows from the TEL Treasury in year one throughout the Telcoin Platform at a TEL issuance rate of 10% of the inventory per year for miners to harvest.

  • Formula: 10% of the TEL Treasury per year
    • Y1: 1,000,000,000 TEL
    • Y2: 900,000,000 TEL
    • Y3: 810,000,000 TEL
  • Description: TEL is allocated from the TEL Treasury and distributed throughout the system according to rules determined by the Platform and Treasury Council using the TELIP process.
    • Physical Corollary: The total quantity of fish an angler club determines can be extracted from a lake by fishermen throughout a year.

TEL Treasury Regeneration Rate: The total number of TEL units destroyed and regenerated to the TEL Treasury each year. Telcoin Network destroys a portion of all TEL gas fees paid each block and regenerates them to the TEL Treasury in equal quantity.

  • Formula: n TEL burned on Telcoin Network per year
  • Rationale
    • Blockspace Demand and Sustained TEL Yield: This process ties blockspace demand to a decreasing circulating supply of the token and an increased supply of future extractable units, enabling sustained yield for all miners when TEL units are allocated proportionate to the rate they are regenerated over time.
    • Incentives Alignment: Anyone can send TEL units to the burn contract, enabling service providers to align with the broader Telcoin ecosystem and drive adoption of their application by platform users.
    • Maintains Fixed Supply Cap and Sustains TEL Yield: BTC, ETH, TEL compared
      • BTC Case Study: In ~2140, the Bitcoin network of miners, node operators, and developers will need to decide to raise the cap of BTC, a crypto asset with a fixed supply cap and no regeneration rate (ie an exhaustive resource) or the network will need to sustain entirely on BTC network fee revenue. That’s a tough burden to achieve when issuance halves every four years.
      • Ethereum Case Study: Ethereum’s solution to the issuance yield sustainability problem while maintaining scarcity, was to have an uncapped supply of ETH while burning a portion of fees.
      • TEL Case Study: The Telcoin Network TEL destruction and regeneration mechanism provides the solution to the fixed supply cap and yield sustainability dilemma. So long as users temper their use such that TEL issued is less than or equal to TEL regenerated, TEL yield will sustain while maintaining 100B total units.
    • Physical Corollary: All renewable resources have a regeneration rate. The population of fish in a lake decreases as more fish are caught, but the population also replenishes over time, either through natural reproduction or artificially stocking the lake.

TEL Sustainability Formula: The rate at which TEL issuance is sustained for future generations over time. TEL yield may be sustained for future generations of miners when the number of TEL harvested from the Platform, or the TEL issuance rate, is less than or equal to the TEL regenerated to the TEL Treasury over time, or the TEL regeneration rate.

  • Formula: TEL Issuance Rate ≤ TEL Regeneration Rate
  • Description: When the TEL regeneration rate is greater than or equal to the TEL issuance rate, TEL is sustained over time for future generations of miners. In other words, it is a renewable resource rather than an exhaustive one above this threshold.
    • Physical Corollary: If the angler club limits the number of extracted fish from a lake to match the rate that the fish naturally reproduce, the fish population sustains itself and there is no need to restock the lake.
TEL: Growth Rate