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Tokenomics

All tokens in the ENTROPY network are mined by miners.

Miners pay a fee when claiming rewards, totaling 1/42 of tokens claimed. The fee funds a treasury that is controlled by members of the Pure DePIN team.

Miners must claim tokens within 7 days. Tokens left unclaimed are automatically burned. No fee is paid on burned tokens.

To begin, the network issues rewards totaling approximately 76 million tokens per day. This amount is halved yearly so that the maximum possible supply is no greater than 55.5 billion tokens, less any tokens that have been burned.

The Second Law​

According to The Second Law of Thermodynamics, entropy in any isolated system may never decrease. ENTROPY mirrors this physical law with a law of its own.

The Second Law of ENTROPY concerns itself with the claiming of tokens that miners have generated from the ENTROPY network.

According to The Second Law, tokens may be withdrawn from a miner's wallet but this may create a local entropy deficit. The deficit created when tokens are withdrawn may be reduced in one of two ways: either by the burning of tokens through the automated seven-day burning mechanism, or by simply replenishing the token balance. Stated formally:

New tokens may only be claimed if the amount of tokens in a miner's wallet has not been less than the total number of tokens ever claimed, minus the number of tokens ever burned, at any time during the past seven days.

The impact of the Second Law is that it causes miners to think about their long-term participation in the network, but does not punish transfers outright. Miners may choose to withdraw a large a number of tokens, but must understand that their ability to claim may be curtailed, and that any tokens they mine in the future may be automatically burned until the entropy deficit is resolved.

Effectively, entropy deficit may be resolved directly through mining. Because tokens that are burned through the automatic burn mechanism are counted against the deficit, sufficient mining results in the lifting of the claim restriction.