Tokenomics

Emission schedule, burn mechanics, staking multipliers, and manipulation cost modeling for the TRUTH token.

Document Version: 1.0.0 Last Updated: 2025-02

Token Overview
Initial Distribution
Emission Schedule
Burn Mechanics
Staking Rewards
Duration Multipliers
Accuracy Bonus Schedule
Manipulation Cost Analysis
Supply Projections
Economic Security Thresholds

1. Token Overview

Property	Value
Token name	TRUTH
Standard	ERC20 + ERC20Votes + ERC20Permit + ERC20Burnable
Maximum supply	1,000,000,000 (1B)
Decimals	18
Chain	EVM-compatible (Solidity ^0.8.20)

Two additional tokens exist for specific protocol functions:

Token	Type	Supply Model	Purpose
VOL	ERC20	Dynamic (controller-gated)	Synthetic volatility exposure
LIQ	ERC20	Dynamic (emission-based)	Liquidity provider rewards

This document covers TRUTH tokenomics exclusively. VOL and LIQ economics are secondary and derive from TRUTH staking activity.

2. Initial Distribution

At Token Generation Event (TGE, Quarter 0):

Bucket	Allocation	Tokens	Unlock
Community / Stakers	40%	400,000,000	Immediate
Early Stakers	25%	250,000,000	Immediate
DAO Treasury	20%	200,000,000	5% per quarter
Team	10%	100,000,000	4-year linear vest
Liquidity Pools	5%	50,000,000	Immediate

Immediately circulating at TGE: 700,000,000 (70%) — Community + Early Stakers + Liquidity.

Locked at TGE: 300,000,000 (30%) — DAO Treasury + Team.

3. Emission Schedule

3.1 Team Vesting

Team tokens unlock linearly over 16 quarters (4 years):

team_unlocked(q) = min(q / 16, 1.0) × 100,000,000

Quarter 0:   0 TRUTH
Quarter 4:   25,000,000 TRUTH  (25%)
Quarter 8:   50,000,000 TRUTH  (50%)
Quarter 12:  75,000,000 TRUTH  (75%)
Quarter 16: 100,000,000 TRUTH  (100% — fully vested)

3.2 DAO Treasury Release

DAO Treasury releases 5% of its total allocation per quarter:

dao_released(q) = min(0.05 × q, 1.0) × 200,000,000

Quarter 0:   0 TRUTH
Quarter 4:   40,000,000 TRUTH  (20%)
Quarter 10: 100,000,000 TRUTH  (50%)
Quarter 20: 200,000,000 TRUTH  (100% — fully released)

3.3 Gross Supply Formula

gross_supply(q) = immediate + team_unlocked(q) + dao_released(q)

where:
  immediate       = 700,000,000
  team_unlocked(q) = min(q/16, 1.0) × 100,000,000
  dao_released(q)  = min(0.05 × q, 1.0) × 200,000,000

4. Burn Mechanics

4.1 Quarterly Burn

A 1% quarterly burn is applied to the circulating supply:

net_supply(q) = gross_supply(q) × (1 - 0.01)^q

4.2 Burn Sources

Burns are funded from:

Source	Mechanism
Platform fees	2% (200 bps) of each payout is collected; a portion is burned
Dispute penalties	Losing disputants forfeit 10,000 TRUTH; portion burned
Governance deposit burn	Failed proposals forfeit a portion of the deposit

4.3 Burn Trajectory

Quarter	Gross Supply	Cumulative Burned	Net Circulating	% of Max
0	700,000,000	0	700,000,000	70.00%
4	765,000,000	30,039,402	734,960,598	73.50%
8	830,000,000	63,199,200	766,800,800	76.68%
12	895,000,000	98,361,250	796,638,750	79.66%
16	960,000,000	134,820,384	825,179,616	82.52%
20	1,000,000,000	164,025,000	835,975,000	83.60%

Values are approximate. Exact figures depend on the burn being applied after each quarter's emission.

4.4 Long-Term Supply Ceiling

Due to the 1% quarterly burn, the net circulating supply converges to a steady state below the 1B maximum. Even after all vesting and treasury releases complete (Quarter 20), the burn continues to reduce circulating supply.

Asymptotic equilibrium (no new minting):

net_supply → 0 as q → ∞  (deflationary to zero in theory)

In practice, governance can adjust the burn rate via STANDARD or CONSTITUTIONAL proposals.

5. Staking Rewards

5.1 Base APY

Parameter	Value
Base staking APY	12%
Early adopter multiplier	2.0x (first 10,000 users)
Platform fee on payouts	200 bps (2%)

5.2 Payout Formula

gross_payout   = stake × (1 + accuracy_bonus) × duration_multiplier
platform_fee   = gross_payout × 0.02
net_payout     = gross_payout - platform_fee

5.3 Reward Breakdown Example

Parameter	Value
Stake	10,000 TRUTH
Duration	4 quarters (1 year)
Accuracy score	0.85 (>0.7, bonus eligible)
Duration multiplier	1.5x
Early adopter	No (rank > 10,000)

effective_apy    = 0.12 × 1.5 × 1.0 = 18.0%
annual_reward    = 10,000 × 0.18 = 1,800 TRUTH
quarterly_reward = 450 TRUTH
total_reward     = 450 × 4 = 1,800 TRUTH

6. Duration Multipliers

Lock Duration	Quarters	Multiplier
30 days	~0.33	1.0x
90 days	1	1.125x
180 days	2	1.25x
1 year	4	1.5x
2 years	8	2.0x
4 years	16	3.0x

Formula:

duration_multiplier = min(3.0, 1.0 + (quarters / 16) × 2.0)

The multiplier is linear in the number of quarters locked, capped at 3.0x for lockups of 16+ quarters.

7. Accuracy Bonus Schedule

From the whitepaper Appendix A:

Accuracy Range	Bonus Multiplier	Effect
> 0.9	+50% on profit	Reward elite predictors
> 0.7	+25% on profit	Reward consistent predictors
> 0.5	+0%	Neutral
≤ 0.5	-30% penalty	Penalize poor predictors

The accuracy bonus applies to the profit component only, not the original stake. A predictor with 0.95 accuracy who stakes 1,000 TRUTH and earns 200 TRUTH profit receives:

boosted_profit = 200 × 1.5 = 300 TRUTH
final_payout   = 1,000 + 300 = 1,300 TRUTH

8. Manipulation Cost Analysis

8.1 Whale Attack

The ManipulationSimulator evaluates whether a whale can profitably dominate a staking pool.

Model:

whale_dominance = whale_stake / (whale_stake + honest_stake × n_honest)
profit_if_correct = whale_share_of_losing_pool × (1 + bonus) - fee
expected_loss = whale_stake × (1 - p_outcome) × loss_factor
net_expected_value = profit_if_correct × p_outcome - expected_loss

A manipulation is unprofitable when net_expected_value < 0, which occurs when:

TVL is sufficiently large relative to the whale's stake.
The accuracy bonus does not apply (whale has no prediction history).
Slashing penalizes incorrect bets.

8.2 Oracle Bribery Cost

oracle_bribe_cost = TVL × oracle_bribe_factor

where oracle_bribe_factor = 0.33  (33% of TVL)

To corrupt the oracle, the attacker must bribe sources worth ≥66% of weighted votes. Given the weight structure (Chainlink 1.5, API3 1.2, validators 1.0 each), the minimum bribery target is Chainlink + API3 + 1 validator (weight 3.7, 64.9%) or API3 + all 3 validators (weight 4.2, 73.7%).

The bribe must exceed each source's expected future earnings from honest operation.

8.3 Market Manipulation Cost

market_manipulation_cost = TVL × market_manipulation_factor

where market_manipulation_factor = 0.20  (20% of TVL)

This represents the cost of moving external markets to create a predictable event outcome.

8.4 Security Threshold

security_threshold = max(event_payout, oracle_bribe_cost, market_manipulation_cost)
is_secure = TVL ≥ security_threshold

TVL	Max Event Payout	Oracle Bribe	Market Manipulation	Secure?
1,000,000	500,000	330,000	200,000	Yes (margin: +100%)
1,000,000	1,200,000	330,000	200,000	No (payout > TVL)
5,000,000	2,000,000	1,650,000	1,000,000	Yes (margin: +150%)

9. Supply Projections

9.1 Circulating Supply Over Time

Quarter │ Team Unlocked │ DAO Released │ Gross Supply │ Net (after burn)
────────┼───────────────┼──────────────┼──────────────┼─────────────────
   0    │       0       │       0      │  700,000,000 │    700,000,000
   2    │  12,500,000   │  20,000,000  │  732,500,000 │    717,988,250
   4    │  25,000,000   │  40,000,000  │  765,000,000 │    734,960,598
   8    │  50,000,000   │  80,000,000  │  830,000,000 │    766,800,800
  12    │  75,000,000   │ 120,000,000  │  895,000,000 │    796,638,750
  16    │ 100,000,000   │ 160,000,000  │  960,000,000 │    825,179,616
  20    │ 100,000,000   │ 200,000,000  │ 1,000,000,000│    835,975,000

9.2 Burn Curve

Cumulative Burn │ Quarter
────────────────┼────────
     7,000,000  │   1
    27,860,000  │   4
    63,200,000  │   8
    98,360,000  │  12
   134,820,000  │  16
   164,025,000  │  20

9.3 Effective Inflation Rate

Period (quarters)	Gross Emission	Net Burn	Effective Inflation
0–4	+65,000,000	-30,039,402	+34,960,598 (5.0%)
4–8	+65,000,000	-33,159,798	+31,840,202 (4.3%)
8–12	+65,000,000	-35,162,050	+29,837,950 (3.9%)
12–16	+65,000,000	-36,459,134	+28,540,866 (3.6%)
16–20	+40,000,000	-29,204,616	+10,795,384 (1.3%)
20+	0	ongoing burn	deflationary

After Quarter 20, no new tokens are emitted. The burn continues, making the protocol deflationary.

10. Economic Security Thresholds

10.1 Minimum TVL for Protocol Security

Given the manipulation cost model, the protocol is economically secure when:

TVL ≥ max_event_payout / (1 - oracle_bribe_factor)
TVL ≥ max_event_payout / 0.67
TVL ≥ 1.49 × max_event_payout

Rule of thumb: TVL should be at least 1.5x the maximum payout of any single event.

10.2 Recommended Operating Parameters

TVL Range	Max Single Event Payout	Security Rating
< 500K	100K	Minimal
500K – 2M	500K	Moderate
2M – 10M	2M	Strong
10M+	5M	Institutional

10.3 TVL vs. Manipulation Cost Relationship

Manipulation Cost
       ▲
       │
 3.3M  │                              ╱
       │                           ╱
 2.0M  │                        ╱
       │                     ╱
 1.0M  │                  ╱
       │               ╱
 0.33M │            ╱
       │         ╱
       │      ╱
       │   ╱
       │╱
       └──────────────────────────────► TVL
       0    1M    3M    5M    7M   10M

Oracle bribery = 0.33 × TVL (linear)
Market manipulation = 0.20 × TVL (linear)

As TVL grows, the cost to attack the protocol grows linearly. The protocol becomes more secure with scale.

Chart generation scripts for all projections in this document are available at docs/graphs/. See:

supply_emission.py — Circulating supply over time
tvl_manipulation.py — TVL vs. manipulation cost
reputation_distribution.py — Reputation score distribution

These scripts export PNG charts for embedding in presentations and audit reports.

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Tokenomics

Table of Contents

1. Token Overview

2. Initial Distribution

3. Emission Schedule

3.1 Team Vesting

3.2 DAO Treasury Release

3.3 Gross Supply Formula

4. Burn Mechanics

4.1 Quarterly Burn

4.2 Burn Sources

4.3 Burn Trajectory

4.4 Long-Term Supply Ceiling

5. Staking Rewards

5.1 Base APY

5.2 Payout Formula

5.3 Reward Breakdown Example

6. Duration Multipliers

7. Accuracy Bonus Schedule

8. Manipulation Cost Analysis

8.1 Whale Attack

8.2 Oracle Bribery Cost

8.3 Market Manipulation Cost

8.4 Security Threshold

9. Supply Projections

9.1 Circulating Supply Over Time

9.2 Burn Curve

9.3 Effective Inflation Rate

10. Economic Security Thresholds

10.1 Minimum TVL for Protocol Security

10.2 Recommended Operating Parameters

10.3 TVL vs. Manipulation Cost Relationship

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Tokenomics

Table of Contents

1. Token Overview

2. Initial Distribution

3. Emission Schedule

3.1 Team Vesting

3.2 DAO Treasury Release

3.3 Gross Supply Formula

4. Burn Mechanics

4.1 Quarterly Burn

4.2 Burn Sources

4.3 Burn Trajectory

4.4 Long-Term Supply Ceiling

5. Staking Rewards

5.1 Base APY

5.2 Payout Formula

5.3 Reward Breakdown Example

6. Duration Multipliers

7. Accuracy Bonus Schedule

8. Manipulation Cost Analysis

8.1 Whale Attack

8.2 Oracle Bribery Cost

8.3 Market Manipulation Cost

8.4 Security Threshold

9. Supply Projections

9.1 Circulating Supply Over Time

9.2 Burn Curve

9.3 Effective Inflation Rate

10. Economic Security Thresholds

10.1 Minimum TVL for Protocol Security

10.2 Recommended Operating Parameters

10.3 TVL vs. Manipulation Cost Relationship